Attractive Investment in Down Stream Business Saudi Arabia


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Ahmed Suliman Al Rajhi, Vice Chairman, Al Rajhi Group's presentation at the 2010 U.S.-Saudi Business Opportunities Forum in Chicago, IL.

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Attractive Investment in Down Stream Business Saudi Arabia

  1. 1. Attractive Investment In Down Stream Business Saudi Arabia USA April 2010 Presented by: Ahmed Al-Rajhi Vice Chairman Al Rajhi Holding Company
  2. 2. <ul><li>Advantages and Benefits for the investors in K.S.A ( I ) </li></ul><ul><li>Ownership </li></ul><ul><li>100% foreign ownership allowed </li></ul><ul><li>Monetary policy </li></ul><ul><li>Since 1986 the Saudi Riyal is pegged against the US$ at a rate of SR 3.75 SR to US$ 1.00 </li></ul><ul><li>No restriction on entry and repatriation of foreign capital & profits </li></ul><ul><li>Funding </li></ul><ul><li>The Saudi Industrial Development Funds (SIDF) grants interest free loans for industrial projects </li></ul><ul><li>up to 50% of its total costs including working capital </li></ul><ul><li>The loan is repayable in 5-7 years after grace period of 2-3 years </li></ul>
  3. 3. <ul><li>Tax </li></ul><ul><li>Reduction of corporate tax from 45% to 20% </li></ul><ul><li>Tax is applicable to the foreign partner, Saudi partners are subject to 2.5% Zakat </li></ul><ul><li>on their net worth </li></ul><ul><li>No Personal Income Tax </li></ul><ul><li>Duty </li></ul><ul><li>Duty exemption on plant & machinery not produced locally </li></ul><ul><li>Law / labor </li></ul><ul><li>Excellent law & order situation </li></ul><ul><li>No labor unions </li></ul><ul><li>Low Manpower cost </li></ul>Advantages and Benefits for the investors in K.S.A ( II )
  4. 4. CONTACT INFORMATIOM <ul><li>Infrastructure </li></ul><ul><li>Excellent road network links all cities within the Kingdom and </li></ul><ul><li>Huge investments in the infrastructures taking place in ports and </li></ul><ul><li>railways. </li></ul><ul><li>Land </li></ul><ul><li>Industrial land available at very low rates </li></ul><ul><li>Raw materials </li></ul><ul><li>Access to advantageously priced raw materials (e.g. PP, PE) </li></ul><ul><li>Utilities Cost </li></ul><ul><li>Excellent infrastructure to supply utilities like water, gas & electricity at very competitive rates </li></ul><ul><li>Electricity 3.2 cents per kwh </li></ul><ul><li>Gas $0.75 per MBTU </li></ul><ul><li>Water $1.60 per m 3 </li></ul>Advantages and Benefits for the investors in K.S.A ( III )
  5. 5. CONTACT INFORMATIOM <ul><li>Logistic costs </li></ul><ul><li>Competitive freight rates to local, regional and global markets </li></ul>Advantages and Benefits for the investors in K.S.A( IV )
  6. 6. <ul><li>Supply Chain </li></ul><ul><li>Central location for participating in strongly growing GCC markets and supplying goods to Europe, </li></ul><ul><li>Asia/Pacific and the Americas </li></ul>Advantages and Benefits for the investors in K.S.A ( V )
  7. 7. Example 1: GPIL <ul><li>GPIL Ltd was established in 1989 with low production capacity (3,000MT/YR) Of BOPP Film and current capacity is (73,000MT/Yr) </li></ul><ul><li>The company is undergoing a major expansion project that will bring total production capacity to 150,000 MT/year 2013. </li></ul><ul><li>Offering packaging solutions to customers in the Middle east/Africa, Europe and the Americas.(more than 35 countries world wide ). </li></ul><ul><li>Representative office in Italy to serve Europe Customers </li></ul>Successful Investments in K.S.A
  8. 8. GPIL Sales History 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
  9. 9. MATTEX COMPANY <ul><li>Mattex was established in 1996 in Dubai and Jeddah and produces carpet backings, artificial grass backings and geotextiles with a total production capacity of approx. 400 MM m 2 . </li></ul><ul><li>The company is represented in the Americas, Europe, Africa/Middle East and Asia/Pacific. </li></ul>Example 2: Successful Investments in K.S.A
  10. 10. Mattex Fabrics Sales History
  11. 11. MFJ and MFD End customer Mattex North American Exports Mattex USA Primary, Secondary Backing & Woven Geotextiles Business started early 2005 and continues to grow Georgia: Calhoun + Chatsworth; California: Los Angeles; Employs 6 people in the USA History Products Mattex Local Warehousing
  12. 12. Origins : Jeddah (KSA) and Dubai (UAE) Destinations: USA West and East Coast plus Canada Containerized Volumes Figures in FFE * 2010 Figures Are Forecasted Year FFE Quantity (M2) Turnover (USD) 2005 111 16.70 4.84 2006 186 41.86 11.01 2007 384 63.81 19.03 2008 442 65.14 23.54 2009 391 59.18 17.26 *2010 485 67.80 20.46
  13. 13. Thank You…