01
CHEMICALS
INVESTOR-CENTRIC ECOSYSTEM
LARGE AND GROWING LOCALCHEMICALS MARKET
ATTRACTIVE FEEDSTOCK MARKET
ACCESS TO LARGE REGIONAL MARKETS
4 REASONS TO INVEST IN SAUDI ARABIA’S CHEMICALS SECTOR
LARGE AND GROWING LOCAL CHEMICALS MARKET
KSA CHEMICALS GROSS OUTPUT GREW AT 8%, AS COMPARED TO GLOBAL GROWTH OF 3%
KSA CHEMICALS GROSS OUTPUT1
1. Includes basic chemicals, fertilizers and nitrogen compounds, plastics, synthetic rubber in primary forms, pesticides and other agrochemical products, paints, varnishes and similar coatings, printing ink, mastics, soap and detergents, cleaning and polishing preparations, perfumes, toilet preparations, and man-made fibers
xx 2010-2017
$ Billion
Source: Central Department of Statistics & Information, Saudi Arabia; Oxford Economics; Haver Analytics
2010
42
2011 2013
59
2012
55
2014
64
51
2017
71
2016
70
2015
69
%8
05
DRIVEN BY THE INTRODUCTION OF NEW PRODUCTS
KSA’S PETROCHEMICALS CAPACITY
NEW KEY PRODUCTS INTRODUCED
Mainly C1 productfrom methane
C2 development EO/EG, PE cracking ethane
Start of mixed ethane/ propane cracking, increase of C3, C4
Start of naphtha cracking – increase of C6
Introduction ofOil-to-chemicals
Development of further downstream products
xx 1980-2020
Mta
1. Capacity for 46 basic and intermediate chemicals including volumes used for captive use.
Source: BCG ChemCom database; American Institute of Chemical Engineers (AIChE) (2014); BCG analysis
1970
0 0 0 0 3 8 10 1511 16 2030 32 34 39
6774 79
44
9
1980 20001990 2010 2020
AmmoniaUreaFormaldehydeMethanol
C1 chemistry
BTXPET
C6 chemistry
EO/ EGPE
C2 chemistry
PVC
Chlorine chemistry
PP
C3 chemistry
EthylaminesPolyolsElastomerNylon 6,6
Other downstream
LARGE AND GROWING LOCAL CHEMICALS MARKET
LARGE AND GROWING LOCAL CHEMICALS MARKET
THE GROWING SAUDI MARKET ATTRACTED ALMOST ALL OF THE 10 LARGEST INTERNATIONAL PLAYERS
Source: ICIS, report published in 2017
Saudi company
BASF
DOW Chemical
SABIC
INEOS
Mitsubishi
Lyondell Basell
ExxonMobil
Dupont
Air Liquide
Sinopec
Sales (2016, $ B)
60,6
48,2
35,4
32,9
30,3
29,2
26,1
24,6
19,1
48,3
Operations in KSA
Saudi BASF for Building Materials Co. Ltd.
JV with SABIC
JV with Sahara Petrochemicals
JV with Saudi Aramco
DuPont Powder Coatings Saudia Co. Ltd.
Al Khafrah Industrial Gases
Saudi company
JV with Saudi Aramco
JV with Saudi Aramco
1. Operations might be through JVs
IN RECENT YEARS, SEVERAL MEGA INVESTMENTS WERE MADE (NON- EXHAUSTIVE LIST)
1. The total investment is $9 billion, $5 billion direct investment by Saudi Aramco and Total, $4 billion in a petrochemical and specialty chemical plant by third party investors
Source: Saudi Aramco; Sadara; Reuters; Financial Times; Business Standards
TYPE OF INVESTMENT
INVESTORS
YEAR OF INVESTMENT
INVESTMENT AMOUNT
PRODUCT
Joint venture
Saudi Aramco and Dow Chemicals
Production of 3 million MT of chemicals per year
2011
$20 Billion
Joint venture
Saudi Aramco and SABIC
Production of 9 million T of chemicals and base oil per year
2017
$20 Billion
Joint venture
Saudi Aramco and Total
Construction of 1.5 million T per steam cracker and petrochemicals unit
2018
$5 Billion
LARGE AND GROWING LOCAL CHEMICALS MARKET
IN THE FUTURE, THE SAUDI CHEMICALS MARKET IS EXPECTED TO GROW AT 6%
2018
7376
2019
83
2020
89
2021
93
2022
GROWTH IN DEMAND WILL BE DRIVEN BY THE EXPANSION IN MANUFACTURING SECTORS AND LOCALIZATION EFFORTS
1. Includes basic chemicals, fertilizers and nitrogen compounds, plastics, synthetic rubber in primary forms, pesticides and other agrochemical products, paints, varnishes and similar coatings, printing ink, mastics, soap and detergents, cleaning and polishing preparations, perfumes, toilet preparations, and man-made fibers.
Source: Central Department of Statistics & Information, Saudi Arabia; Oxford Economics; Haver Analytics
6%
THE PROJECTED SAUDI GROSS OUTPUT FOR CHEMICALS
xx 2018-2022$ Billion
LARGE AND GROWING MANUFACTURING SECTORS LOCALIZATION EFFORTS
LARGE AND GROWING LOCAL CHEMICALS MARKET
09
LARGE AND GROWING MANUFACTURING SECTORS
CHEMICALS ARE WIDELY USED IN FIVE SECTORS IN KSA, ALL OF WHICH ARE LARGE OR EXPECTED TO GROW SIGNIFICANTLY...
Source: Vision 2030; World Bank; Statista
SECTORS
KEY FACT AND HIGHLIGHTS
CURRENTLY LARGE INDUSTRIES
Food and Beverages
33 M population
Construction
$42 B industry
value
Defense
50%
Local content
by 2030
Mining
$26 B
GDP by 2030
Renewables
9.5 GW
By 2030
GROWTH INDUSTRIES
LARGE AND GROWING LOCAL CHEMICALS MARKET
LARGE AND GROWING LOCAL CHEMICALS MARKET
LOCALIZATION EFFORTS CAN BESUPPORTED BY GROWING DEMAND FOR CONVERSION PRODUCTSCASE STUDY: THE SAUDI RUBBER
Source: UN Comtrade, Oxford Economics, National Industrial Strategy
2018
186
201
2019
217
2020
321
2025
472
2030
8%
THE PROJECTED SAUDI RUBBER MARKET SIZE xx 2018-2030
$ Million
Hoses and tubes
Sheets and belts
Tires
LOCALIZATION EFFORTS
11
LOCALIZATION EFFORTS CAN BESUPPORTED BY GROWING DEMAND FOR CONVERSION PRODUCTSCASE STUDY: THE SAUDI RUBBER MARKET
Source: General Entertainment Authority, North American Industry Classification System
(NAICS), United Nations International Standard Industrial Classification
“Bring the private sector to its full potential, maximize local spending and optimize Balance of Payments”
“Achieve SABIC’s localization agenda and local industry development”
“Drive additional domestic value creation to support a rapidly changing economic environment and foster future prosperity”
Local Content and Private Sector Development Unit
SABIC’s Nusaned Program
Saudi Aramco’s IKTVA program
LARGE AND GROWING LOCAL CHEMICALS MARKET
Source: Aramco; IKTVA website; U.S. Energy Information Administration
OVERVIEW OF ARAMCO AND IKTVA
LARGE AND GROWING LOCAL CHEMICALS MARKET
LOCALIZATION EFFORTS
OVERVIEW OF ARAMCO
A state-owned oil company of the Kingdom of Saudi Arabia, a fully integrated, global petroleum and chemicals enterprise, and the largest crude oil producer in the world.
Manages proven conventional crude oil and considers supplying the Kingdom and the world with energy as the core of its mission.
Among other operational achievements, Aramco succeeded in 2016 to:
- Produce 920 million scfd of ethane - Process 12 billion scfd of raw gas - Produce 1.4 million bpd of NGL
OVERVIEW OF IKTVA
Aramco has launched the IKTVA program with two main objectives:
- Double the percentage of locally-produced energy- related goods and services to 70% by 2021 - Export 30% of the output of the local energy goods and services industry
By setting such objectives Aramco expects to spend $210 billion of procurement on local production in 10 years
To ensure effective communication, Aramco announces local content opportunities on IKTVA’s website.
13
Preliminary figures based on international benchmarks
Source: General Entertainment Authority
OVERVIEW OF SABIC
A global leader in diversified chemicals headquartered in Riyadh, Saudi Arabia. It manufactures on a global scale, making distinctly different kinds of products: chemicals, commodity and high-performance plastics, agri-nutrients and metals
SABIC is the fourth largest petrochemical company in the world, reaching $35.4 billion of sales in 2016
OVERVIEW OF NUSANED
In order to achieve its localization agenda and local industry development, SABIC initiated the “Nusaned” program
The program presents opportunities available to drive investment and create local demand through:
- Procurement spending- Product conversion to develop a downstream industry - Commercialization of SABIC’s patents, technologies, and applications
Nusaned aims at providing solutions for some of the issues inventors face, such as:
- Robust pre-feasibility assessment to convert ideas into opportunities - Support package to improve financial attractiveness of opportunities- Develop workforce and provide functional capabilities
LARGE AND GROWING LOCAL CHEMICALS MARKET
ATTRACTIVE FEEDSTOCK MARKET
FEEDSTOCKS IN KSA ARE ATTRACTIVE FOR THREE REASONS
LOW PRICES OF ETHANE, PROPANE,AND BUTANE
ABUNDANCE AND GROWTH OF THE NAPHTHA MARKET
HUGE POTENTIAL FOR CRUDE OIL TO CHEMICALS PRODUCTION
15
ATTRACTIVE FEEDSTOCK MARKET
KSA HAS LOW PRICES OF ETHANE, PROPANE AND BUTANE COMPARED TO OTHER GLOBAL BENCHMARKS
1. Saudi Arabia Ethane Contract FD, US Ethane Spot FOB, WE Ethane Spot FD (Fuel Oil Parity). 2. Saudi Arabia Propane Contract FD, WE Propane Spot
CIF, Singapore Propane Spot FOB, China Propane Spot CFR. 3. Saudi Arabia Butane Contract FD, WE Butane Spot CIF, Singapore Butane Spot FOB,
China Butane Spot CFR, Japan Butane Spot CFR
LOW PRICES OF ETHANE, PROPANE, AND BUTANE
Western
Europe
Ethane1 Propane2
Butane3
185
354
85
Western
Europe 442
Western
Europe 532
Southeast
Asia490
Southeast
Asia 544
China 502
China 544
KSA
369KSA
395KSA
USA
399USA
434USA
xx $/ton
2017
xx $/ton
2017
xx $/ton
2017
2020
19
2015
18
NAPHTHA PRODUCTION IN KSA HAS ALREADY INCREASED OVER THE PAST YEARS, DRIVEN BY GOVERNMENT EFFORTS
Source: Nexant
ABUNDANCE AND GROWTH OF NAPHTHA MARKET
2000
10
2010
18
2005
16
2030
22
2025
20
%2.7
KSA PRODUCTION OF NAPHTHA, COMPLEMENTED BY…xx 2000-2030
Million tons/year
A $20 B INVESTMENT IN SADARA, MAKING IT THE FIRST TO CRACK NAPHTHA IN GCC
A joint venture between Saudi Aramco and Dow Chemicals, Sadara is the largest chemicals complex built in a single phase
Sadara will expand its service portfolio, to open the door for new specialty chemical plants
ATTRACTIVE FEEDSTOCK MARKET
17
ATTRACTIVE FEEDSTOCK MARKET
BY 2020, NAPHTHA IS EXPECTED TO CONSTITUTE 14% OF TOTAL FEEDSTOCK CRACKERS IN KSA
Source: Nexant; O&G annual ethylene survey
ABUNDANCE AND GROWTH OF THE NAPHTHA MARKET
1985
100
92
63 56 53
3434288
9 10 14
1995 2005 2015 2020e
LPG
Naphtha
Ethane
SUSTAINED CRUDE OIL SUPPLY……WITH POTENTIAL TO PROVIDE MULTIPLE ADVANTAGES FOR PRODUCERS
…WITH POTENTIAL TO PROVIDE MULTIPLE ADVANTAGES FOR PRODUCERS
KSA has the second largest proven oil reserve globally, at 266 Billion bbl
KSA is looking into diversifying its energy portfolio; allowing additional supply of oil for chemicals industries
Higher scale of operations at 2x to 5x the scale of petrochemical plants
Creates a diversified portfolio of feedstock
Higher scale of operations at 2x to 5x the scale of petrochemical plants
Creates a diversified portfolio of feedstock
AS CRUDE OIL BECOMES A COMMON FEEDSTOCK WORLDWIDE, KSA HAS HUGE POTENTIAL TO TAP INTO THIS MARKET
HUGE POTENTIAL FOR CRUDE OIL TO CHEMICALS PRODUCTION
ATTRACTIVE FEEDSTOCK MARKET
Source: U.S. Energy Information Administration; Expert interviews
19
ATTRACTIVE FEEDSTOCK MARKET
KSA HAS ALREADY STARTED CAPITALIZING ON SUCH POTENTIAL WITH A MAJOR INVESTMENT
HUGE POTENTIAL FOR CRUDE OIL TO CHEMICALS PRODUCTION
1 2 3 4
A $20 billion investment by Saudi Aramco and SABIC …
with operations expected to start in 2025 …
to build the largest crude oil to chemicals facility in the world …
leveraging 400,000 barrels per day to produce 9 million tons of chemicals
ACCESS TO LARGE REGIONAL MARKETS
GLOBAL IMPORTS OF CHEMICALS INCREASED BY 3% OVER THE PAST YEARS, REACHING $2 TRILLION
North AmericaWestern Europe
Africa and
Middle East Latin America
Central &
Eastern EuropeAsia-Pacific
2010
1,653
235
74
714
94
86
451
1,920
268
93
810
113
99
537
2011
1,921
270
98
795
118
102
538
2012
1,965
270
98
806
124
109
558
2013
1,961
300
88
820
99
117
539
2015
1,979
299
82
832
100
118
548
2016
3%
GLOBAL CHEMICALS IMPORTSxx 2010-2016
$ Billion
2,003
286
92
832
116
120
558
2014
Source: ABIQUIM; ANIQ; CCPA; CEFIC; JCIA; VCI; Bureau of the Census; Eurostat; QuERI; Statistics Canada; United Nations;
WTO; American Chemistry Council
21
ACCESS TO LARGE REGIONAL MARKETS
ON A REGIONAL LEVEL, FUTURE DEMAND FOR SPECIALTY CHEMICALS IS EXPECTED TO GROW AT 3.5%
Source: IHS, Mordor Intelligence, National Industrial Strategy
REGIONAL DEMAND FOR SPECIALTY CHEMICALSxx 2016-2021
$ Billion
2016
48
2019
53
2018
51
2020
55
2017
49
2021
57
3.5%
COMPANIES IN KSA HAVE THE POTENTIAL TO CAPTURE GLOBAL GROWTH, LEVERAGING TWO KEY ENABLERS
KSA is located within the GCC and at a close proximity to African, Asian and European countries, and thus has a logistical advantage (i.e., lower transportation cost, shorter delivery time) over several other countries.
Following GAFTA – Goods produced in any of the GAFTA member countries shall be exempted from customs duties in any other member country.
GEOGRAPHICAL ADVANTAGE TRADE AGREEMENTS WITH OTHERARAB COUNTRIES
ACCESS TO LARGE REGIONAL MARKETS
23
STRATEGICALLY LOCATED, KSA OFFERS ACCESS TO VAST GLOBAL MARKETS
GEOGRAPHICAL ADVANTAGE
ACCESS TO LARGE REGIONAL MARKETS
From North American markets, importing $298.5 Bn worth of chemicals
From European markets, importing$932 Bn worth of chemicals
From Asia-Pacific markets, importing $547.8 Bn worth of chemicals
From Latin American markets, importing$82 Bn worth of chemicals
From African and Middle Eastern markets, importing $118.4 Bn worth of chemicals
21,000 KM1 10,900 KM3
11,700 KM4
13,000 KM2 2600 KM5
Aberdeen Port US
ABT Brazil
Benghazi Libiya
Archangel Russia
HashihamaJapan
... WHICH IS SUPPORTED BY A MATURE LOGISTICAL INFRASTRUCTURE AND EASE OF DOING BUSINESS INITIATIVES
INFRASTRUCTURE INITIATIVES
10 MAIN HARBORS
Largest marine network in the Middle East
- 6 leading container ports - Over 240 million tons of cargo handled in 2017
King Abdullah Port at KAEC with a 4 million TEU2 annual capacity
- Fastest growing port inthe world - Port throughput increased by 14% in
the first half of 2017
>1,700 KM OF RAILS
Cargo line: 556 km starting at King Abdulaziz Port in Dammam and ending in Riyadh
Branch lines: 486 km connecting industrial sites and facilities
Approx. 700 thousand containers handled every year
Additional 1,500 km are to be added in the upcoming years
>200,000 KM OF ROADS
66,000 km of roadways connecting major cities and providing access to railways, ports and airports
>140,000 km of dirt roads
12,000 km of roads connecting Saudi Arabia’s regions to international borders
CUSTOM CLEARANCE (TAYSEER INITIATIVE)
Most inbound cargo containers are cleared within 24 hours
Reduced documents for imports from 12 to 4 and for exports from 9 to 3
Improved regulations for importing chemicals and chemical products & created an online platform for advanced approvals on chemical imports
1. Ministry of Transport 2. TEU stands for twenty-foot equivalent unit
Source: Saudi Arabia’s Vision 2030; SAGIA; Industrial Clusters; Saudi Railways Organization; Ministry of Transport; Saudi Ports Authority; Tayseer; Saudi
Arabia’s Vision 2030
GEOGRAPHICAL ADVANTAGE
ACCESS TO LARGE REGIONAL MARKETS
25
SUPPORTING ENTITIES& FUNDING
KSA IS A GAFTA MEMBER, ALLOWING ITS EXPORTS TO REACH ~340M CONSUMERS FREE OF CUSTOMS DUTY WITHIN 15 MEMBER STATES
TRADE AGREEMENTS WITH OTHER ARAB COUNTRIES
Egypt 97.6
Population (million)Chemicals imports ($B, 2016)
5.9
Morocco 35.7 3.8
UAE 9.4 8.6
Sudan 40.5 0.8 (2015)
Tunisia 11.5 1.9
Lebanon 6.1 1.0
Algeria 41.3 4.1
Yemen 28.3 0.32 (2015)
Libya 6.4 NA
Iraq 38.3 0.7 (2014)
Jordan 9.7 1.3
Palestine 5.1 0.3
Kuwait 4.1 1.6
Oman 4.6 1.7
Bahrain 1.5 1.1
Note: The provisions of this program do not apply to its products that are prohibited from being imported, traded or used in any country for religious,
health, security, environmental or quarantine reasons and is committed States Parties shall submit a statement of such products as well as any
amendments thereto.
1. Algeria became a member in 2009 2. Iraq has recently paused acting on GAFTA on a temporary basis Source: Ministry of Industry, Trade, and Supply
in Jordan; World Bank; World Meters; UN Comtrade
Source: Ministry of Industry, Trade, and Supply in Jordan; World Bank; World Meters; UN Comtrade
INVESTOR-CENTRIC ECOSYSTEM
KSA HAS A SET OF KEY ENABLERS AND PROGRAMS TO PROMOTE THE CHEMICALS INDUSTRY
DEVELOPED INDUSTRIAL CITIES
ACCESSIBILITY TO FINANCIAL SUPPORT
LOW PRODUCTION COST
AVAILABILITY OF HUMAN CAPITAL & RESEARCH CAPABILITIES
27
INVESTOR-CENTRIC ECOSYSTEM
KSA OFFERS ATTRACTIVE INDUSTRIAL PROPERTY SOLUTIONS…
DEVELOPED INDUSTRIAL CITIES
Support through mature infrastructureand tailored services …
… diversified industries hosted, including but not limited to, synthetic materials and alternative energy …
... all for very competitive land prices starting at $0.27/m2 a year
ROYAL COMMISSION FOR JUBAIL & YANBU:
KING ABDULLAH ECONOMIC CITY (KAEC)
SAUDI INDUSTRIAL PROPERTY AUTHORITY:
Manages four strategically located industrial cities
Located on the west coast of KSA, KAEC is the perfect location to connect the East with the West
Develops and supervises 40 industrial cities across the Kingdom
…PROVIDED BY MULTIPLE ENTITIES
1. Based on 2011 statistics 2. For example, engineering work request service in Yanbu Industrial City
Source: RCJY; Asharqia Chamber; Desk research
120 km2
930 km2
106 km2
185 km2
RAS AL-KHAIR
JUBAIL
JAZAN
YANBU
Availability of raw materials (e.g. oil and gas, minerals, etc..)
- Jubail hosts more than 160 industrial enterprises, among which is Sadara, ensuring reliable supply
- Yanbu has a 1,2001 km pipeline that transports natural gas & oil across KSA
Easy access to domestic and international markets
Accessibility to services through e-solutions2
STRATEGICALLY LOCATED INDUSTRIAL CITIES…
…WITH AN ATTRACTIVE SET OF SERVICES AND INCENTIVES
KSA OFFERS ATTRACTIVE INDUSTRIAL PROPERTY SOLUTIONS…
DEVELOPED INDUSTRIAL CITIES
INVESTOR-CENTRIC ECOSYSTEM
29
INVESTOR-CENTRIC ECOSYSTEM
JUBAIL INDUSTRIAL CITY (I/II)
DEVELOPED INDUSTRIAL CITIES
ROYAL COMMISSION FOR JUBAILEstablished
Jubail city (km2)
Jubail Industrial City (km2)
Population
Main businesses
Airport
Seaport
Rail
Hospital and specialized clinics
Schools and universities
1975
1016
82
779,000
Petrochemicals and oil industries, plastics, chemical products, steel products and fertilizers
King Fahd International Airport
Jubail Commercial Port and the King Fahd Industrial Port
Future planning
25+
20+
VALUE PROPOSITION
Access to local feedstock
Strategic location
Modern world-scale infrastructure
Attractive financing support
Well-developed communities
Attractive energy costs
Attractive land lease
Largest industrial city in the Middle East
Home to the Middle East’s largest and world’s fourth largest petrochemical company
The world’s largest IWPP (Independent Water and Power Project)
Saudi Arabia’s biggest industrial center and host to more than 160 industrial enterprises
Home to almost 70,000 full-time residents
The most modern and biggest industrial complex in Asia
EXAMPLE OF RAW MATERIALS AVAILABLE IN JUBAIL INDUSTRIAL CITY
Tasnee
Kayan
Sipchem
Safco
Sadara
Al bayroni
Kemya
Sharq
Jana
United
Ibn sina
S-chem
Chemanol
Rufayah
Gsi
Titanium Dioxide, Acrylic Acid, Butyl Acrylate, -2Ethyl Hexyl Acrylate, Glacial Acrylic, Super Absorbent Polymers
Ethylene Oxide, Ethylene Glycols, Acetone, Benzene, Ethoxylates, n-Butanol, Phenol, Bisphenol A
Vinyl Acetate Monomer, Ethylene Vinyl Acetate, Ethyl Acetate, Butyl acrylate Terephthalate.
Urea-Formaldehyde
Ethoxylates, PEG, TDI, Benzene, MDI, Butanol, Polyols, Epoxy Resins, Acrylics
2EthyleneHexanol
TPE, BR, EPDM Elastomers, Carbon Black
Ethylene Glycols, Polyethylene
Epoxy Resins
Ethylene Glycols, Linear Alfa Oefin
Methanol, Polyacetal
Cyclohexane, Benzene, Gasoline Components, Styrene, Polyethylene, Polystyrene, Polypropylene
Pentaerythritol, Urea-Formaldehyde, Melamine-Formaldehyde, PARA, Sodium Formate
Aliphatic Hydrocarbon Resins, Aromatic Hydrocarbon Resins, DCPD Hydrocarbon Resins,Water White Hydrocarbon Resins, Aromatic Solvent (200 ,150 ,100)
Dipentaerythritol, Formulated Biocides, Deformer Anti-Foam Agent
JUBAIL INDUSTRIAL CITY (II/II)
BIG PLAYERS
COMPANY RAW MATERIALS PRODUCED
INVESTOR-CENTRIC ECOSYSTEM
31
INVESTOR-CENTRIC ECOSYSTEM
YANBU INDUSTRIAL CITY (I/II)
DEVELOPED INDUSTRIAL CITIES
ROYAL COMMISSION FOR YANBU (RCY)Established
Jubail city (km2)
Jubail Industrial City (km2)
Population
Main businesses
Airport
Seaport
Rail
Hospital and specialized clinics
Schools and universities
1975
1016
606
125,000
Petrochemicals and oil industries, chemical products and steel products
Prince Abdulmohsin Bin Abdulaziz Airport
King Fahd Industrial Port (KFIP)
Planned railways to connect the city
20+
20+
VALUE PROPOSITION
3rd largest global refining hub with a capacity of more than 1.0 Million Barrel per day
Total investment is over $53 Billion
Average annual growth rate of private sector investments is 18%
Largest oil shipping port on the Red Sea & major liquid handling terminal
Access to local feedstock
Strategic location
Modern world-scale infrastructure
Attractive financing support
Well-developed communities
Attractive energy costs
Attractive land lease rate
EXAMPLE OF RAW MATERIALS AVAILABLE IN JUBAIL INDUSTRIAL CITY
Crystal
Yanpet
YASREF
IBN Rushd
Yansab
Titanium Dioxide
Polypropylene, Polyethylene, Ethylene Glycol
Diesel, Gasoline, Sulfur & Coke, Benzene
Polyester, Aromatics, Purified Terephthalic Acid and Polyethylene Terephthalate
Ethylene, Ethylene Glycol, Polyethylene, Polypropylene, Butene 1, Butene 2, MTBE and BTX
YANBU INDUSTRIAL CITY (II/II)
BIG PLAYERS
COMPANY RAW MATERIALS PRODUCED
INVESTOR-CENTRIC ECOSYSTEM
33
20-year contracts, ensuring business stability
Competitive yearly rental rate across key locations, starting at 0.27 cents/m2
Mature infrastructure with easy access to utilities
E-solutions and one-stop shop, providing easy access to service offerings
Rich supply chain networks, with ~3,000 productive factories across cities
MODON OFFERS A VARIETY OF SOLUTIONS THROUGH ITS 35 INDUSTRIAL CITIES
DEVELOPED INDUSTRIAL CITIES
INVESTOR-CENTRIC ECOSYSTEM
24/7
2 53 6
7
1 4 Includes allocation request services; follow up of requests, review of drawings and issuance of building permits
Aims at providing a list of qualified contractors to serve the industrial and investment projects of MODON customers
Renews contract services, and waives and issues statements of account
Contains a package of research and inquiry services about the industrial cities in various ways as well as other mapping services, such as measurement, satellite images, etc.
Includes different types of prequalification requests, follow-up prequalification requests and evaluation of qualified consulting offices
Deals with customers’ communications, suggestions, and management of their accounts
Provides a collection of research services to equip investors with information about the industrial cities, the available industries, products, and others
LAND ALLOCATION
CONTRACTOR PREQUALIFICATION
CENTRAL SERVICES
MODON MAPS
CONSULTING OFFICES
PREQUALIFICATION
CUSTOMER AFFAIRS SERVICES
QUERY AND REPORTING
SERVICES
SEVEN MAIN SERVICES OFFERED THROUGH THE “E-MODON” SYSTEM
INVESTOR-CENTRIC ECOSYSTEM
35
INVESTOR-CENTRIC ECOSYSTEM
KING ABDULLAH ECONOMIC CITY (KAEC) IS A FULL-FLEDGED LOGISTICAL CITY
DEVELOPED INDUSTRIAL CITIES
KING ABDULLAH ECONOMIC CITY (KAEC)Established
KAEC (km2)
Industrial valley (km2)
Population
Main businesses
Airport
Seaport
Rail
Schools and universities
Supporting industries
2005
173
63
+/-1 Million
Logistics, automotive, FMCG, pharma, packaging, general industries national paints.
Jeddah international airport
King Abdullah port
High speed link to Jeddah international airport
The multi-university campus is designed
To accommodate 18,000 students; National Paints; producing all types of emulsion
VALUE PROPOSITION BIG PLAYERS
King Abdullah Port is strategically located for imports and exports.
King Abduallah Economic City is governed by a single regulator—the Economic Cities Authority (ECA).
At the forefront of KAEC’s master planned development is the Industrial Valley, a new pro-business partner in one of the fastest growing regions and economies in the world.
PETRO RABIGH Established
KAEC (km2)
Industrial valley (km2)
Population
Main businesses
Airport
Seaport
Schools and universities
2005
2.5
63
+/-1 million
18.4 million tons per annum (mtpa) of petroleum-based products and 2.4 mtpa of ethylene and propylene-based derivatives
King Abdulaziz International Airport
Marine terminal
King Abdullah University for Science and Technology
VALUE PROPOSITION
PRC Investment $10 B
PRC Expansion investment $8.4 B
Rabigh Plus Tech Park is the first private industrial park for conversion industries
Rabigh Plastic Technical Center (R-PTC), a state-of-the-art facility
Petro Rabigh Industrial Complex
35 plants and 25 products
Offtake agreement for 100% refined products
Largest propylene oxide producer in the Middle East
Excellent access to all markets
Fully integrated utilities
Marine terminals
MOREOVER, PETRO RABIGH OFFERS A SECURED SUPPLY OF PETROLEUM-BASED PRODUCTS
INVESTOR-CENTRIC ECOSYSTEM
37
USA 64.0
USA
12.0
USA
7.2 0.6
4.9 0.5
EU 70.0
EU 14.0 EU 2.1
0.9KSA
8.0 1.1
KSA
15.0UAE
11.2
UAE
India India
China
China
1.9
UAE
INVESTOR-CENTRIC ECOSYSTEM
… ALL OF WHICH IS SUPPORTED BY LOW LAND RATES
LOW PRODUCTION COST
INDUSTRIAL LAND RATES PRICING
ELECTRICITY PRICES WATER PRICES
xx m2
$
xx kWhUS cent
xx cubic meter$
KSA HAS LOW ELECTRICITY AND WATER PRICES
KSA
2.1
INVESTOR-CENTRIC ECOSYSTEM
ACCESSIBILITY TO FINANCIAL SUPPORT
FINANCIAL SUPPORT SPANS ACROSS FOUR MAIN INITIATIVES
Covering up to 90% of credit value
Exempting import tax for establishments
Financing up to 75% of project costs
Refund on raw materials used for imports
EXPORT CREDIT FINANCING, GUARANTEE, INSURANCE
CUSTOMS DUTY EXEMPTION
LOAN PROGRAM FOR INDUSTRIAL PROJECTS
CUSTOMS DUTY DRAWBACK
39
INCENTIVES TARGETING EXPORT INCREASE
INVESTOR-CENTRIC ECOSYSTEM
ACCESSIBILITY TO FINANCIAL SUPPORT
DESCRIPTION
An export focused program thatcovers up to 90% of credit value
CONDITIONS
Minimum of 25% local value added (excluding crude oil)
Minimum transaction value funded set at SAR 100k
Assessment of operational risk and credit worthiness; thus guarantees are requested accordingly
RESPONSIBLE ENTITIES
The Saudi Fund for Development
EXPORT CREDIT FINANCING, GUARANTEE, INSURANCE(SAUDI EXPORT PROGRAM)
SPECIAL LOAN PROGRAM FOR INDUSTRIAL PROJECTS
DESCRIPTION
Finance project costs of up to 50% in major cities and 75% in promising cities
CONDITIONS
Industrial projects with a valid license that realize considerable value for the economy1
RESPONSIBLE ENTITIES
Saudi Industrial Development Fund
LOAN PROGRAM FOR INDUSTRIAL PROJECTS
1. Characteristics: a) viable from an economic perspective, b) provides training and employment opportunities, c) uses locally sourced materials,
d) integrates with other projects in KSA/GCC, e) replaces imports with local products, f) targets export opportunities, g) acquires advanced
technologies Source: Saudi Industrial Development Fund
INVESTOR-CENTRIC ECOSYSTEM
41
SUPPORT FOR FOREIGN-SOURCED MATERIAL (1/2)
INVESTOR-CENTRIC ECOSYSTEM
ACCESSIBILITY TO FINANCIAL SUPPORT
DESCRIPTION
Tax exemption of selected imports for industrial establishments (e.g. raw materials, and machinery)
CONDITIONS
Local supply is unavailable or does not meet required specifications
RESPONSIBLE ENTITIES
Ministry of Energy, Industry and Mineral Resources
CUSTOMS DUTY EXEMPTION
SUPPORT FOR FOREIGN-SOURCED MATERIAL (2/2)
DESCRIPTION
Refund on raw material imports processed in Saudi Arabia and re-exported as more finished products
CONDITIONS
The re-exporter is the same person who imported the goods
The taxes refunded shall not be less than $5,000
The goods should be re-exported within 1 year of importation, the claim should be made within 6 months of re-exportation
Drawback is limited to customs taxes
RESPONSIBLE ENTITIES
Saudi Customs
CUSTOMS DUTY DRAWBACK
INVESTOR-CENTRIC ECOSYSTEM
43
OFFERING INCLUDES AN ADVANCED EDUCATIONAL SYSTEM AS WELL AS ON-THE-JOB TRAINING PROGRAMS FOR EMPLOYEES
INVESTOR-CENTRIC ECOSYSTEM
AVAILABILITY OF HUMAN CAPITAL & RESEARCH CAPABILITIES
ADVANCED R&D ECOSYSTEM ON-THE-JOB TRAINING AND FINANCIAL SUPPORT FOR PROFESSIONAL CERTIFICATION SEEKERS
INVESTOR-CENTRIC ECOSYSTEM
AVAILABILITY OF HUMAN CAPITAL & RESEARCH CAPABILITIES
… THROUGH TRAINING PROGRAMS AND PROFESSIONAL CERTIFICATION SUPPORT OFFERED BY THE HUMAN RESOURCES DEVELOPMENT FUND
TAMHEER PROGRAM
Provision of financial support, up to SAR 3,000/month, during on-the-job training (period is 3 to 6 months)
Three conditions apply: - Applicant must be a Saudi national - Applicant must have been unemployed for the past
6 months - Applicant must have no previous participation record
in Tamheer Program
PROFESSIONAL CAREER CERTIFICATION SUPPORT PROGRAM
This program aims to empower the national workforce to gain recognized professional certificates in miscellaneous occupations required by the Saudi labor market. The program is intended to improve the personnel efficiency in both the public and private sectors, increasing the productivity in the labor market, creating more employment opportunities and enhancing the national competencies through the concept of Development and Succession Planning.
Five conditions to apply: - Applicant must be a Saudi national - The certificate must be approved and registered in the
HRDF website, and it should have been acquired after the program launch date
- The applicant should confirm that the entity which he/ she works for did not pay the costs of the certificate
- HRDF pays the cost subsidy of a maximum of two certificates per person
- The certificate acquired by the applicant should be valid and not expired
NON-EXHAUSTIVE
45
ABOUT SAUDI GENERAL INVESTMENT AUTHORITY
47
The Saudi Arabian General Investment Authority is the Kingdom’s investment promotion agency. Our priorities are to attract and develop foreign investment, enhance the nation’s investment climate, improve the Ease of Doing Business, and eliminate obstacles from the investors’ journey.
Imam Saud Bin Abdulaziz Road
P.O. Box 5927, Riyadh 11432Kingdom of Saudi Arabia
T + 966 11 203 5555F + 966 11 263 2894E [email protected]
investsaudi.sa
HEADQUARTERS
To discover the countless opportunities across major economic sectors that Saudi Arabia has to offer:
CONTACT US NOW
investsaudi.sa