Mutajadedah Energy Company1. Basic information about Saudi Arabia Saudi Arabia is one of the most influential country in A...
Figure 1-4 Sovereign Credit Ratings _ Chinese Credit Rating Organization dàgōng     Sovereign Credit Rating indicates the ...
2. Why ‘Korea’? Polycrystalline silicon, also known as poly-silicon, is amaterial consisting of small silicon crystals. It...
3. Connections with other enterprises   Interest towards poly-silicon is rising constantly in both firms and individuals d...
producing the perfect nine-nine poly-silicon1. Such advancedKorean technology will benefit both MEC and Korean investors. ...
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2011 CSIA Investment Promotion Conference(class 4, Saudi)


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2011 CSIA Investment Promotion Conference(class 4, Saudi)

  1. 1. Mutajadedah Energy Company1. Basic information about Saudi Arabia Saudi Arabia is one of the most influential country in ArabianPeninsula. Actually, Saudi Arabia is the country which contains lots ofpotentials to develop, and lots of golden opportunities to maintain thesituation of sustainable development with other coexisting countriesand corporations. Saudi Arabia will furnish investors from SouthKorea to get the extremely expanded benefits. Figure 1-1 Saudi Arabian National Flag Kingdom of Saudi Arabia Climate Inland: Arid and hot Economic 0.1% Coast: Arid and wet Growth Rate (2009 est.) Area 2,150,000 km2 GDP US $ 369,700,000,000 Population 23,980,000 people GDP per Capita US $ 17,700 Capital Riyadh Government Monarchy Language Arabian Credit Ratings A1 = Moody’s Figure 1-2 Basic Information Chart of Saudi Arabia Saudi Arabia is an absolute monarchy and the largest country in the Middle East. Althoughnumerous monarchies in the Middle East faced downturns due to antigovernment demonstrations, theSaudi Arabian government employed methods focused towards the citizen and thereby avoided suchdiscords between the government and the people and rather constructed a trusted relationship. SaudiArabia, therefore, is immune of systematic collapses that most Middle Eastern countries arethreatened by.The Saudi Arabian government has kept close relationships with the United States ofAmerica as well as China. Such intimate relationship combined with sustainable social structureallows Saudi Arabia to maintain the peace and stability. Figure 1-3Public Debt _ CIA the World Fact book The figure above demonstrates the miniscule rate of public debt in Saudi Arabia. The debt isconstantly descending due to the massive wealth that the Saudi Arabian government possesses.Consistent effort of the Saudi Arabian government to defend and preserve the current financialstability while avoiding the increase of public debt is recognized worldwide. The IMF, for instance,predicted in 2009 that most G20 nations will face an increase in public debt and only a few will avoidsuch a trend, and Saudi Arabia was predicted to be the latter. 1
  2. 2. Figure 1-4 Sovereign Credit Ratings _ Chinese Credit Rating Organization dàgōng Sovereign Credit Rating indicates the risk level of the investment environment of a nation. Saudi Arabia’s sovereign credit rating has been constantly rising, and currently Saudi Arabia’s sovereign credit rating is higher than that of the United States of America as shown in the figure above. The credit-rating agencies give Saudi Arabia credit for its financial wealth, which is considered to be sufficient enough to bear the global economic depression and oil price volatility. Such stability in finance allows capacity for Saudi Arabia’s sovereign credit rating to rise even more and thereby providing investors a safe environment for investment. Figure 1-5 Global Competitiveness Report _ WEF The ‘Doing Business 2011’shown in figure 1-6 rates Saudi Arabia as 11thon the ease of doing business as shown in Figure 1- 6, which is an improvement from last year. The abundant resources and stability in internal and external terms allowed Saudi Arabia rapid economic growth which eventually led to such business and investment conditions. Since the ranking is related directly to the status of both direct and indirect investment to Saudi Arabia and its firms, the improvement in this ranking demonstrated by ‘Doing Business’ imply a promising opportunity to invest in Saudi Arabian companies even when compared in a global scale. The ‘Global Competitiveness Report’ also recognized Saudi Arabia as a highly competitive country due to its rapid economic growth as well. Saudi Arabia, however, has potential for further development.Figure 1-6 Doing Business Report 2011 2
  3. 3. 2. Why ‘Korea’? Polycrystalline silicon, also known as poly-silicon, is amaterial consisting of small silicon crystals. It is asemiconductor originally used mainly for CPU construction.However, as eco–friendly energy rose in demand,poly-silicon is used in production of photo – voltaic panels, acrucial component in the production of solar energy. The future of poly-silicon is bright as more fields areopened for usage due to technological development. SaudiArabia has abundant poly-silicon reserves of high-quality,which MEC can exploit and create poly-silicon with. Thehigh-quality poly-silicon thus produced can be provided in arelatively low price to Korean companies in relationshipwith us, including the Korean company KCC whichrecently signed a contract with us. Our company chose Korea from the world as a potentialinvestor considering many aspects. One of them is that Figure 2-1 Poly-silicon market shareKorea is one of the world’s leading countries inmanufacturing poly-silicon. Figure2-1 demonstrates that OCI, a Korean company, has the thirdbiggest share in the poly-silicon market. Korea is, therefore, influential in the poly-silicon market. Second, Korean companies produce poly-silicon of quality and competitiveness. The cost of poly-silicon produced by Korean companies is comparatively cheap. Although the cost cannot competewith China, Korean companies have a better reputation due to the goods’ higher quality compared tothat of Chinese products. Such reputation of high-quality combined with the relatively low price madeus choose Korea as our investor. Third, the demand for poly-silicon is high in the Korean market. Korea is a country that is not apt toproduce energy by itself. It doesn’t have any fossil fuels including oil and coal, which are the mostcommonly used energy sources not only in Korea but also worldwide. Due to such limitations, Koreahas but one choice – renewable energy. Poly-silicon provides photovoltaic panels, one of the mainelements needed for solar energy production. Poly-silicon is also used as a semiconductor for CPUs,the most important part of an electric device. Since Korea has leading IT companies includingSamsung and LG, demands for poly-silicon is expected to be high in this field as well. Korea can also benefit from this relationship.Investment in the poly-silicon industry will place Koreaat better conditions during solar energy trades between Saudi Arabia. The relationship will alsoprovide Korea a cheaper source of supply of poly-silicon, thereby enabling the reduction ofproduction costs of diverse poly-silicon related products. 3
  4. 4. 3. Connections with other enterprises Interest towards poly-silicon is rising constantly in both firms and individuals due to the wide range of usage. The poly-silicon businesswe are aiming at is interrelated to a host of other business sectors. Due to the wide range of use, our product has infinite potential for usage in diverse fields. Investment in MEC will in short term lead to a huge market with interlinked fields, promising a potential of becoming one of the most influential magnates in the Middle East. In the long term, the benefits will be expanded to other sectors of businesses explained below. ① Photovoltaic System – Energy Production and Eco-Friendly Development Photovoltaic system power generation is a power generating system that does not make any other carbon dioxide. The environmentally friendly system is attracting many nations to employ it to mainland.The feed stock of the solar cell, or the basic unit of the photovoltaic system module, is poly-silicon. Furthermore, Saudi Arabia’s Rub’ al Khali Desert, which covers more than 95% of the mainland of Saudi Arabia,has potential silicon element reserves with conditions for cheap and easy exploitation. Silicon is the element which we can easily find out from the earth’s crust, and since the Rub’ al Khali desert is composed of uncontaminated materials from Figure 3-1 Photovoltaic the Earth’s crust, Saudi Arabia has the potential to become power generation plant the best producer of poly-silicon and thereby the photovoltaic system module. As demonstrated in figure 3-2, poly- silicon is directly deployed to make the photovoltaic system’s solar cell, the kernel components of eco- friendly power generating system. Investment to our company and thereby poly-silicon market will contribute to the development of clean energy. Figure 3-2. Steps for the photovoltaic power generation There are many South Korean firms which signed contracts and MOUs (Memorandum of Understandings) with SaudiFigure 3-3 Proto model of Solar House Arabian feed stock companies. The Korean energy company KCC, for example,started to cooperate with our company at December 2010.Other Korean energy firms, STX and Millinet, signed a contract with the Saudi Arabian government and firms to build a factory at the Saudi Arabian city Yanbu and Jubail. The Saudi Arabian government and our company are willing to employ Korea’s high technology of 4
  5. 5. producing the perfect nine-nine poly-silicon1. Such advancedKorean technology will benefit both MEC and Korean investors. This type of photovoltaic system could be applied to theenvironmentally-friendly technology including the electric car(or battery car) and the solar house. An electric car, which canrun only by solar energy generated while gathering light underthe bright sun when parked, will greatly reduce the use ofpetroleum, the main culprit of global warming and destructionof the earth’s atmosphere and ozone layers. Figure 3-4 Proto model of Solar houses can also preserve the environment by curtailing Electric Car the usage of petroleum. These technologies applied will help both the economy of Saudi Arabia and the investors. Investmentto the poly-silicon technology cancontribute to environment protection. ② Modernized Information Technology – IT business Although more renown for solar energy related products, the original use of poly-silicon was for the CPU. The CPU, an indispensable component for electrical devices,is made of materials including silicon. For further technological Figure 3-5 New CPU substrate development of the CPU, highly effective, high-quality silicon isrequired. Since poly-silicon contains higher photo-sensibility and electrical stability, it is suitable forthe main source of the CPU substrate. Our high purity poly-silicon can bring an opportunity fordevelopment to IT venture corporations. If our company is able to produce large amounts of poly-silicon with advanced Korean technologycombine with investment, our company can repay such trust on our company in forms of high-qualitypoly-silicon with a relatively cheap price and thereby fostering development in solar energy and ITtechnology of Korea, which are business sectors essential to understanding the future society. Thesebusiness areas also have potential markets where South Korean and Saudi Arabian technology andfeed stocks can achieve successful overseas expansion toward developed countries. There are manybenefits which this relationship, if accepted, can provide.4. Conclusion Although Saudi Arabia has all the conditions of development, including social stability andeconomic wealth, it was rather underestimated until now. The investment and attention from SouthKorean investors will lead to a relationship beneficial for both sides. We promise our investors thatSaudi Arabian poly-silicon business will not fail them. The development of the Saudi Arabian poly-silicon business will provide Korea with diverse advantages including a foundation for technologicaldevelopment in fields of solar energy and IT. Saudi Arabia and Korea has many opportunities ofcooperation. We believe that South Korean investors will be able to recognize the value of thisopportunity. We hope that South Korean investors and MEC will become one of the best businesspartners in the world.1Nine-nine poly-silicon means the highest purity and efficiency of poly-silicon, 99.99999999% 5