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FUTURE EXPORTS POTENTIAL OF NON-OIL PRODUCTS PER SAUDI ARABIA 9 TH FIFTH PLAN AND 2020 NATIONAL INDUSTRIAL STRTEGY SAUDI EXPORTS DEVELOPMENT CENTER (SEDC)

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Presentation on theme: "FUTURE EXPORTS POTENTIAL OF NON-OIL PRODUCTS PER SAUDI ARABIA 9 TH FIFTH PLAN AND 2020 NATIONAL INDUSTRIAL STRTEGY SAUDI EXPORTS DEVELOPMENT CENTER (SEDC)"— Presentation transcript:

1 FUTURE EXPORTS POTENTIAL OF NON-OIL PRODUCTS PER SAUDI ARABIA 9 TH FIFTH PLAN AND 2020 NATIONAL INDUSTRIAL STRTEGY SAUDI EXPORTS DEVELOPMENT CENTER (SEDC)

2 CONTENTS 2 1. IMPORTANT INDUSTRIAL STATISTICS & INDICATORS 2. FACTS OF KSA LOCAL MANUAFCTURING INDUSTRY 3. KSA 2020 NATIONAL INDUSTRIAL STRATEGY 4. KSA MAIN OBJECTIVES OF 2020 NATIONAL INDUSTRIAL STRATEGY 5. LIKLEHOOD OF ACHEVING MAIN OBJECTIVES OF NATIONAL INDUSTRIAL STRATEGY 6. GOVERNMENT BUDGETTED INVESTMENT 9 TH FIFTH PLAN 7. EXPORTERS FUTURE EXTERNAL & INTERNAL CHALLNGES 8. SEDC RECOMMENDATIONS

3 KSA INDUSTRIAL COMPARISON 1974, ITEM Number Factories Total Investment ( Billion SR) Total labor33,928529,816 No. Industrial Cities (not including Jubail & Yanbu Royal Commission + Aramco Refineries ( 84 million M2 ) na20

4 KSA EXPORTS YEAREXPORT WITH OIL (BILLION SR) EXPORT OF NON-OIL (BILLION SR) % OF TOTAL EXPORTS % % % % %

5 AVERAGE GROWTH OF NON-OIL EXPORTS 1992, SECTORAVERAGE GROWTH Food Items11,4% Chemical & Petrochemical Products13,5% Minerals and related Manufactured Products12,3% Electrical Machineries & equipments11,9% Other Products13,0%

6 KSA MANUFACTURING DISTRIBUTED VALUE-ADDED VALUE-ADDED CLASSIFICATION% OF TOTAL VALUE- ADDED Wages & Salaries35,6% Profit30,5% Depreciation28,2% Financing Costs3,9% Rentals1,8% Total100%

7 FACTS OF KSA MANUFACTURING 7 High value-added of wages & salaries indicate growth of GNP for this item along with increase in manufacturing production capacities Competitive financing costs and rentals that are considered important elements of attracting foreign investment into Saudi Arabia (SIDF+Local banks, SEP) Breakdown of 35,6% Value-added of Wages & Salaries :- Wooden Products (75,6%), Metal Products (71,6%), Textiles and leather products (63,3%, Building materials (60,7%, Paper & Printing products (60,5%)

8 KSA 2020 NATIONAL INDUSTRIAL STATEGY 8 WIDENING INDUSTRIAL/MANUFACTURING BASE PROTECTING NATIONAL ECONOMY FROM NEGATIVE FLUCTUATING INTERNATIONAL ECONOMY DEVELOPING MANUFACTURING TECHNOL AND ATTRACTING FOREIGN INVESTMENT THROUGH TECHNOLGY TRANSFER DEVELOPING INDUSTRIAL REASERACH AND SPECFICATIONS CENTERS CONCENTRATING ON INDUTRAIL SAUDIZATION TRAINING PROGRAMMS AND SUPPORTS TO SMIES

9 KSA 2020 TARGEETED OBJECTIVES 9 INCREASING INDUSTRIAL CONTRIBUTION TO GNP TO 20% BY 2020 INCREASING INDUSTRIAL VALUE-ADDED THREE TIMES THAN IT IS NOW PER EACH INDUSTRIAL SECTOR INCREASIN SHARE OF NON-OIL INDUSTRIAL PRODUCTS IN GNP FROM ITS CURRENT OF 18% TO 35% BY 2020 INCREASING EXPORTS OF IT BASE FROM ITS CURRENT OF 30% TO 35% BY 2020 INCREASING INDUSTRIAL SAUDIZATION EMPLOYMENT FROM ITS CURRENT OF 15% TO 30% BY 2020 EXCERTING EFFORTS FOR KSA TO BE IN BEST POSITION AMONG THE BEST 30 INDUSTRIAL COUNTRIES OF AN AVERAGE OF 2 ADVANCING POSITION PER YEAR TO REACH THAT LEVEL BY 2020

10 LIKELIHOOD OF ACHIEVING KSA 2020 TARGEETED OBJECTIVES 10  KSA PRODUCES 25% OF GRAND TOTAL OF ARAB COUNTRIES’ GDP  KSA ECONOMY IS STIL THE FASTEST IN THE WORLD DESPITE INTERNATIONAL PREVALING PROBLEMS  KSA IS THE 20 TH INTERNATIONALLY OF WORLD WIDE COMPETATIVNESS  WORLD BANK HAS GIVEN KSA 12 TH POSITION AMONG ALL COUNTRIES FOR EASY FACLITATION OF PROJECTS IMPLMENTAIONS

11 KSA FUTURE INVESTMENT SECTORS PER NINTH FIFTH PLAN (  WATER DESLINATION AND SEWAGE PROJECTS  SOLAR & RENEWABLE ENERGY PROJECTS  DOWN STREAM PROJECTS IN CHEMICAL & PETROCHEMICAL PRODUCTS  SPECILAIZED PLASTIC PACKING & PACKAGING PRODUCTS  PHARMACEUTICALS PROJECTS  AUTO GENUINE SPARE PARTS ( Industrial Clustering )  CONSTRUCTION MATERAILS  ENGINEERING PRODUCTS

12 KSA BUDGETED INVESTMENT FOR THE NINTH FIFTH PLAN ( ) 12  GOVERNMENT ALLOCATED A BUDGET OF 490 BILLION US DOLLARS ( BILLION SAUDI RIYALS)  AT LEAST 15% OF WHAT THE GOVERNMENT HAS ALLOCATED WOULD BE AN EXTRA INVESTMENT FROM PUBLIC AND PRIVATE SECTORS (ABOUT 73.5 US BILLION DOLLARS (276 BILLION SAUDI RIYALS) (THROUGH DRECT FOREIGN INVESTMENT AND JOINT- VENTURES)  TOTAL GOVERNMENT, PUBLIC & PRIVATE SECTORS WOULD BE AROUND 564 BILLIONS US DOLLARS (ABOUT 2113 BILLION SAUDI RIYALS

13 EXTERNAL EXPORTS CHALLANGES OF NON- OIL PRODUCTS 13 GOVERNMENT EXPECTED INTERFERANCE TO DISCOURAGE EXPORTS OF PRODUCTS ASSOCIATED WITH HIGH CONSUMPTION OF WATER USAGE ( bottled waters, dairy & Juices products ) GOVERNMENT GREATER INCENTIVES ALLOCATION ON PRODUCTS OF DOWN STREAM INDUSTRIES WITH GREATER EXPORTS VALUE-ADDED ( Chemicals & Petrochemicals, Plastic packing & Packaging, Auto genuine branded spare parts, Engineering products, Solar & renewable energy, Water treatments,Construction materials, Mining ) STRONGER LOCAL & EXPORTS COMPETITION FROM MORE OF FUTURE “DIRECT FOREIGN INVESTMENT” WITH UP-TO-DATE TECHNOLOGY TRANSFER AND OFF-TAKE MARKETING AGREEMNTS REDUTION OF IMPORTS TARRIF RATES PER WTO CONCESSION

14 INTERNAL EXPORTS CHALLNGES OF NON-OIL PRODUCTS 14 SO FAR NO RESPONSIBLE GOVERNMENT EXPORTS ABODY EXIST ( SAUDI EXPORTS DEVELOPMENT AUTHORITY 5 YEARS NO START ) ONLY ONE EXPORT TRADING COMPANY EXIST WITH WEAK PERFORMANCE WITH SAUDI EXPORTING MANUFACTURERS ( Saudi Exports Company (Public ) LIMITED REGULAR SHIPPING LINES TO SEA PORTS IN AFRICAN COUNTRIES AS THEY CONSIDERD TRAGET MARKETS FOR MOST SAUDI EXPORTERS

15 INTERNAL EXPORTS CHALLNGES OF NON-OIL PRODUCTS (CONTINUE) 15 UNJUSFIABLE FEES ON SAUDI EXPORTS TAKEN FROM SOME COUNTRIES TO PROTECT THEIR INDUSTRIES (PROTECTIONISM) OR AS A PRCATICED WIDE SPREAD CORRUPTION TO AVOID INACTIVE SAUDI EMBASSIES AND COMMERCIAL ATTACHEE ASSIGNED IN COUNTRIES WITH GREATER POTENTIAL FOR SAUDI EXPORTS RARE QULAFIED SAUDIS TO TAKE OVER EXPORTS RESPONSBILITIES OF MOST EXPORTING FACTORIES

16 SEDC RECOMMENDATIONS EXPORTERS REQUIRED LOBBYING EFFORTS WITH CONCERNED GOVERNMENT MINISTRIES FOR “Saudi Exports Authority” FOR REAL START NEXT YEAR/ CONCENTRATING ON EXPORTS OF PRODUCTS THAT DO NOT INTERFER WITH GOVERNMENT NATIONAL INDUSTRIAL STATEGY 3. FOCUS ON EXPORTS OF MANUFACTURED PRODUCTS WITH HIGHER PROFIT MARGIN TO OVERCOME AFFECTED RELATED RISKS

17 17 SEDC RECOMMENDATIONS 4. STRONG ACTIVATION OF SAUDI EMBASSIES AND COMMERCIAL ATTACHEE IMPORTANT ROLE FOR PRMOTING SAUDI-MADE PRODUCTS 5. HIRING AND UNDER TAKEN EXPORTS TRAINING COURSES OF SAUDI STUDENTS GRADUATED FROM WESTERN UNVERSITIES 6. PROVIDING INFORMATION OF COUNTRIES PARCTICING NON-TARRIFS OBSTACLES (SEDC)

18 18 SEDC RECOMMENDATIONS 7. FOCUSING MANUFACTURING ON LESS LABOUR INTENSIVE TECHNOLOGY FOR MAINTAINIG HIGHER QUALITY SPECFICATIONS AND COMPETATIVNESS 8. BENIFITING FROM SIDF FINACING SUPPORTS FOR FURTHER CAPACITY EXPANSION TO INCREASE RANGE OF PRODUCTS FOR NEWER LOCAL AND EXPORTS MARKET SEGMENTS

19 19 THANK YOU FOR LISTENING EID ALKAHTANI EXECUITIVE DIRECTOR SAUDI EXPORTS DEVELOPMENT CENTER (SEDC) TEL: FAX:


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