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Business Forum: Doing Business in Saudi Arabia - Caston
Business Forum: Doing Business in Saudi Arabia - Caston
Business Forum: Doing Business in Saudi Arabia - Caston
Business Forum: Doing Business in Saudi Arabia - Caston
Business Forum: Doing Business in Saudi Arabia - Caston
Business Forum: Doing Business in Saudi Arabia - Caston
Business Forum: Doing Business in Saudi Arabia - Caston
Business Forum: Doing Business in Saudi Arabia - Caston
Business Forum: Doing Business in Saudi Arabia - Caston
Business Forum: Doing Business in Saudi Arabia - Caston
Business Forum: Doing Business in Saudi Arabia - Caston
Business Forum: Doing Business in Saudi Arabia - Caston
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Business Forum: Doing Business in Saudi Arabia - Caston

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Presentation at the US-Saudi Business Opportunities Forum (Dec 5-7, 2011, Atlanta, GA). David G. Caston, Business Development Manager, Tamimi Company/Commercial Division, presented at the panel …

Presentation at the US-Saudi Business Opportunities Forum (Dec 5-7, 2011, Atlanta, GA). David G. Caston, Business Development Manager, Tamimi Company/Commercial Division, presented at the panel titled, "Doing Business in Saudi Arabia: An Insider's View for New to Market Companies".

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  • 1. •American Business Association- Eastern Province (the “ABA-EP”)  Founded in 1976 as a joint initiative between the US Consulate General, the (then) Saudi Arabian American Oil Company (Aramco), and leading US businesses operating in the EP.•Objectives:  Identify and promote the common interests of Americans and American businesses operating in the Kingdom.  Broaden and strengthen existing commercial and cultural ties between the United States and Saudi Arabia.Approximately 30,000 to 35,000 Americans live in the KSA with more than halfestimated to live in the Eastern Province.Currently more than 270 members representing more than 90 companies.AMERICAN BUSINESS Working to identify and promote the common interests of Americans and American businesses in the EasternASSOCIATION Eastern Province - Saudi Arabia Province for over 30 years.
  • 2. Nominal GDP of $435 billion in 2010 ($510 billion estimated in 2011), Saudi Arabia is the largest and most stable economy in the Gulf. Very conservative economic and financial policies. Saudi Arabia’s economic performance remained strong in 2010 despite the world economic crisis. The country’s real non-oil GDP growth was 3.7% in 2010. Saudis have been doing business with Americans starting in the late 1930s. American expertise and assistance has significantly contributed to the development, expansion and modernization of the Saudi economy over the last 25 years. Saudi businesses are very familiar with Americans and with the way Americans do business. Saudi businesses executives, for the most part are educated in the United States and are fluent in English. The Saudi currency or “Riyal” is pegged to the U.S. dollar (at 3.75 riyals per dollar).AMERICAN Working to identify and promote the common interests BUSINESS Eastern Province - Saudi Arabia of Americans and American businesses in the Eastern Province for over 30 years.
  • 3. Saudi Arabia is ranked 4th in the world for “fiscal freedom.” (Movement of monetary instruments, repatriation of capital, etc.) Saudi Arabia is rated 13th out of 181 countries for the overall ease of doing business globally. Saudi Arabia is 7th in the world in regarding to taxation. (Very business friendly) Saudi Arabia is one of the world’s 25 largest economies and is currently rated at 23. Saudi Arabia is the largest economy in the Middle East & North Africa (MENA) region. One of the world’s fastest growing countries: per capita income is forecasted to rise from $20,700 in 2009 to $33,500 by 2020. At least 25% of the world’s proven oil reserves.AMERICAN Working to identify and promote the common interests BUSINESS Eastern Province - Saudi Arabia of Americans and American businesses in the Eastern Province for over 30 years.
  • 4. $697 Billion in Planned & Existing Projects Rabigh Expansion King Abdullah Economic City Khurais Oilfield King Abdul Aziz City for Science & Yanbu Export Refinery Manifa Offshore Oilfield Technology Saudi Kayan Petrochemicals Jubail Export Refinery Riyadh Housing Development Complex Ras Tanura Integrated Project Jazan Economic City Hassyan Power & Desalination Plant (RTIP) Petrochemical Complex Pearl GTL Ras Girtas Power Project Karan Development Petro Rabigh Refinery Upgrade Shaybah Phase 2 Expansion Manifa Development Shah Sour Gas Field DevelopmentAMERICAN BUSINESS Working to identify and promote the common interests of Americans and American businesses in the EasternASSOCIATION Eastern Province - Saudi Arabia Province for over 30 years.
  • 5. Quick Look:  Construction opportunities: $385 Billion allocated for roads, airports, and energy projects.  Largest IT market in the Middle East: $3.8 Billion (annually).  Rail Projects: $30 billion planned and/or underway. North/South Railway, Saudi Land Bridge, Mecca – Medina Railway, plus others.  Water Sector: $6 Billion allocated per year for the next 20 years.  Electricity: SEC will invest $70 Billion by 2018 to add 22 MW plus infrastructure.  Nuclear: $300 Billion for 16 Plants over the next 20 years.  Example of Aramco Oil & Gas + Petrochemical: SATORP $10B, RTIP $26B, Petro Rabigh $10B, Yanbu $10B, (Sadara $20B)AMERICAN BUSINESS Working to identify and promote the common interests of Americans and American businesses in the EasternASSOCIATION Eastern Province - Saudi Arabia Province for over 30 years.
  • 6. Upstream Oil & Gas Manifa Offshore Oilfield Scope: 900,000 bpd oil, 120 million scfd sour gas, 50,000 bpd condensate, 950,000 bpd of produced water Status: Due to start production mid-2011 Estimated cost: $9 billion Known Contractors: Saipem, Halliburton, Foster Wheeler, Tecnicas Reunidas, Jan De Nul Group Petrochemicals & Refining Jubail Export Refinery Saudi Aramco/Total joint venture Scope: The Satorp refinery will process Arabian Heavy crude and have a capacity of 400,000 barrels per day. It will also produce 700,000 metric tons per annum (mtpa) of paraxylene, 140,000 mtpa of benzene and 200,000 mtpa of polymer-grade propylene. Status: Contracts have been awarded, work underway. Completion date: 2014 Estimated cost: $9.6 billion Known contractors: Technip (France), Tecnicas Reunidas (Spain), Daelim Industrial Company (South Korea), Samsung Engineering (South Korea), Chiyoda Corporation (Japan), SK Engineering & Construction (South Korea), CTCI (Taiwan)AMERICAN Working to identify and promote the common interests BUSINESS Eastern Province - Saudi Arabia of Americans and American businesses in the Eastern Province for over 30 years.
  • 7. Ras Tanura Integrated Project (RTIP) Saudi Aramco/Dow Chemical joint venture Scope: The facility will be the largest facility of its kind in the world and will produce a huge range of products including ethylene, propylene, aromatic, chlorine derivatives, polyethylene, ethylene oxide and glycol. It will also be connected to the Ras Tanura Refinery complex and its Jua’ymah gas processing plant. Status: Due for completion in 2015. Estimated cost: $26 billion Known Contractors: KBR have been awarded the project management contract. Remaining contracts out to tender in 2010/2011. Petro Rabigh Saudi Aramco JV with Sumitomo Chemical (Japan) Scope: 2.4 million tons per annum of petrochemical solids and liquids plus large volumes of gasoline and other refined products. Status: Commissioning started in March Estimated cost: $10 billion Known Contractors: Shaw Stone & Webster, JGC, Maire Tecnimont, Mitsui Engineering & Shipbuilding, Shell, Foster Wheeler, Invensys Process Systems. Yanbu Export Refinery Saudi Aramco Scope: A full-conversion refinery is being designed to process 400,000 bpd of Arabian heavy crude supplied by Saudi Aramco. It will produce high-quality, ultra-low sulfur refined products. Completion date: Third quarter of 2014 Estimated cost: About $12 billion after renegotiating costs Known contractors: Tecnicas Reunidas, Dayim Punj Lloyd, Daelim, SK Engineering, Saudi Services, R. H. Al Marri, ENPPIAMERICAN Working to identify and promote the common interests BUSINESS Eastern Province - Saudi Arabia of Americans and American businesses in the Eastern Province for over 30 years.
  • 8. Examples Where Opportunities Exist Upstream Oil & Gas Information Technology Technology Construction&Services (Software & Services) Downstream Oil & Gas Water (management, re-use, Business Consulting Construction & Services treatment, desalination) Construction (civil, electrical, Agriculture (corn, barley, Logistics instrumentation, etc) & soybean meal, oil seeds, related technical services green fodder, live stock, dairy, poultry, etc.) Chemicals Healthcare Housing Plastics Travel and tourism Conversion Industries Mining Education Industrial Supplies Real Estate (Housing) Research& Development Residential Supplies Railroads Engineering Food Services Infrastructure (electricity, Construction Recreational Services roads, etc) AMERICAN BUSINESS Working to identify and promote the common interests of Americans and American businesses in the EasternASSOCIATION Eastern Province - Saudi Arabia Province for over 30 years.
  • 9. Examples Where Opportunities Exist Defense/Security Laboratories Oilfield / Drilling Fluids Equipment Machinery Rental Marine Services Conferencing Services Telecommunications Tank Yards Insurance Industrial Gases Maintenance Services Retail Solar Power Legal Services Computer Equipment & Services Wind Power Environmental Waste Management Port Services MappingAMERICAN BUSINESS Working to identify and promote the common interests of Americans and American businesses in the EasternASSOCIATION Eastern Province - Saudi Arabia Province for over 30 years.
  • 10. Due Diligence: Do your homework  Research and study the markets, business protocols, commercial regulations, banking requirements, visa requirements, etc.  Interface with groups familiar with doing business in Saudi Arabia; MECACC, US- Saudi Business Council, US Commercial Section (Embassy / Consulate), etc.  Build local (not long distance) relationships with potential partners and potential customers prior to start up. Get in the required “Face Time.”  Insure you can meet the qualification standards of major Saudi companies such as Saudi Aramco, SABIC, MA’ADEN, MARAFIQ, etc.  Easiest path for market penetration: Agency Agreements, Joint Ventures or Strategic Partnerships with the local family business groups. (Al Tamimi Group, Al Gosaibi, Al Zamil, Abdul Kareem, Abdulla Fouad, ).  Involvement with and introductions through the local Chamber of Commerce.  All information is valuable - use every resource possible. Dept of Commerce, District Export Council, Chamber of Commerce, Congressional Representatives, CIA Fact Book, US Saudi Arabia Business Council & American Business Association-Eastern Province .AMERICAN Working to identify and promote the common interests BUSINESS Eastern Province - Saudi Arabia of Americans and American businesses in the Eastern Province for over 30 years.
  • 11. Summary Do your homework and come prepared.Business friendly environment - Saudis like the USA. Business is Business regardless of the location AMERICANS ABROAD = U.S. EXPORTS = JOBS AT HOME 11
  • 12. Eastern Province - Saudi Arabia 12

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