Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

Market challenge & opportunities in construction sector in ksa

1,209 views

Published on

  • Be the first to comment

  • Be the first to like this

Market challenge & opportunities in construction sector in ksa

  1. 1. MARKET OPPORTUNITIES AND CHALLENGES IN THE CONSTRUCTION INDUSTRY KINGDOM OF SAUDI ARABIA SAMER MOBAYED 9 March 2011
  2. 2. Agenda Introduction Construction Sector Overview Construction Opportunities in KSA XYZ’s Construction Industry Market Challenges & Possible Overcomes S. MOBAYED / March 2011
  3. 3. Introduction• Saudi Arabia represents one of the largest construction market in the Middle East and one of the fastest growing markets in the world. S. MOBAYED / March 2011
  4. 4. Introduction• Saudi Arabia represents the largest construction market in the Middle East and one of the fastest growing markets in the world.• In recent years, record high oil prices and large oil revenues have made it possible for the construction industry to employ extra liquidity for its development.• King Abdullah announced a $ 430b financial stimulus to guarantee finance for development projects for the next five years.• This growth will be further supported by the 2011 Saudi budget of $ 154.7b, the largest ever in the history of the country. S. MOBAYED / March 2011
  5. 5. Introduction• Saudi Arabia represents the largest construction market in the Middle East and one of the fastest growing markets in the world.• In recent years, record high oil prices and large oil revenues have made it possible for the construction industry to employ extra liquidity for its development.• King Abdullah announced a $ 430b financial stimulus to guarantee finance for development projects for the next five years.• This growth will be further supported by the 2011 Saudi budget of $ 154.7b, the largest ever in the history of the country.• A large portion of this budget includes investments to improve infrastructure, transport, education and real estate, all of which will require construction related activity. S. MOBAYED / March 2011
  6. 6. Construction Sector Overview• Second’s largest value after UAE • 2011 biggest value of projects signed & planned• Around 27% from total Gulf Total Projects • 2010– 2015 maintain highest values of projects S. MOBAYED / March 2011
  7. 7. Construction Sector OverviewBuilding Construction sector is the largest between 2010-2015 S. MOBAYED / March 2011
  8. 8. Construction Opportunities in KSA1- Economic Cities Project S. MOBAYED / March 2011
  9. 9. Construction Opportunities in KSA2 - Industrial Cities Jubail Industrial City announces $30b industrial mega projects Ras Az Zawr Minerals Industrial City – more than $15b contracts signed Yanbu Industrial City – estimated $10b new refinery S. MOBAYED / March 2011
  10. 10. Construction Opportunities in KSA3 – Major Economic sectors Power & Water : $40b budget from 2010 – 2015 for IWPPs. Oil, Gas & Petrochemical : Saudi Aramco to spend more than $ 124b (2009-2014) SABIC budgeted $ 21b program to 2015 Transportation : Railway –$ 25b investment Roads – $ 6.5b budget Airports & Ports - $ 6.7b budget Tourism : King Abdulaziz Cultural Center Eastern Province –$ 4b investment S. MOBAYED / March 2011
  11. 11. Construction Opportunities in KSA4 – Major citiesRiyadh:- Sudair City Development – $ 40b- Princess Noura bint AbdulRahman University for Women – $ 11.5bJeddah:- Jeddah Mile High Tower - $13.6b- Jeddah Hills Community- $11.2b- Jeddah Gate Development – $ 1.6bDammam:- Al Khobar Lakes Project – $ 1.2b- Al Marina Project – $ 1b S. MOBAYED / March 2011
  12. 12. Construction Opportunities in KSA5 – Construction Supplies 6 – Areas of Construction• Concrete / Cement • Structural Engineering• Steel • Engineering Consultancy• Tiles • Quantity Surveying• Timber • Master Planning• Hardware Products • Project & Construction Management • Design – Urban & Green • Creative Architecture S. MOBAYED / March 2011
  13. 13. XYZ’s Construction Industry• XYZ’s construction industry is one of the key drivers in the growth of the ……..economy over the last decade.• The business opportunities for XYZ firms in the construction sector in Saudi Arabia are very strong.• Athlone-based company XYZ wins €1.5m Saudi deal - As an XYZ client, XYZ initiated a successful joint venture with XYZ.• X Company Limited and XYZ announced a new joint venture in Saudi Arabia with the XYZ Group, a large Saudi Company. XYZ MISSION The mission of XYZ is to accelerate the development of world-class ….. companies to achieve strong positions in global markets resulting in increased national and regional prosperity. S. MOBAYED / March 2011
  14. 14. Major Market Challenges Challenge Possible OvercomesChallenge 1- Saudi individuals and - Alliances and collaboration establishments are given preference between local and Irish companies over all other suppliers for - Regular contact between Irish and Government contracts Saudi’s to build a “trust” relationship - Targeting non-government sector ContractsChallenge 2Cultural/Regional Differences - Secure a good JV Saudi partner- Visa restrictions and expatriate who can secure visas recruitment regulations - Engage a good local employee or- Legal and contractual differences consultancy who has experience of- Timeline in securing & completing the regional practises projects - Be aware of the challenges and be prepared to meet them S. MOBAYED / March 2011
  15. 15. Major Market Challenges Challenge Possible OvercomesChallenge 3- Saudization – only few Saudis want - Recruiting & Training Saudi Youth to work in the construction sector in ……. companies due to the tough and unpredictable nature of the jobChallenge 4- Tendering for contracts in a very - Realistic profit margin expectation competitive market - Target “niche” markets where margins can be greater - Appropriate bank facilities to service the contract - Look at alternative procurement models S. MOBAYED / March 2011
  16. 16. THANK YOU Research SAMER MOBAYED Market Kingdom of Saudi Arabia Mobile: +966 55 357 8485 Act ThinkEmail: samermobayed@hotmail.com Plan Ahead

×