Eng. Fuad Mosa – Vice President, SABIC Local Content and Business Development Unit
GPCA Supply Chain Conference
Wednesday, 17/04/2019
HOW TO NAVIGATE SAUDI ARABIA’SLOGISTICS OPPORTUNITY WHILE MAXIMIZING LOCAL CONTENT
2
Classification: Internal Use
VISION 2030 COMPRISES THREE PILLARS WITH THE UNDERLYING OBJECTIVE OF DEVELOPING THE LOCAL MARKET
A vibrant society… A thriving economy…An ambitious nation…
Localization Targets and Clear Stakeholder Mandate
KSA has put in place bold localization targets through Vision 2030, with a mandate to enable
them
Strategic Long Term Local Market Creation
Creating a local market provides sectors with offtake security, risk reduction and
potential for higher revenues and savings in the long term
Participation of Large Companies Key to Success
Historically localization and local market creation programs have required
participation of large companies as executors to ensure success
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Classification: Internal Use
How to navigate across Saudi Arabia's new business ecosystem while maximizing Local Content CONFIDENTIAL
THE HUB CONNECTING 3 CONTINENTS
KSA has chosen to focus on developing local manufacturing capacity and adopting the latest supply chain technologies to ensure it becomes a global leader
Raw Materials
Production Capacity
Export Capacity
Supply ChainManufacturing
Capacity
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Classification: Internal Use
THESE OBJECTIVES TRANSLATE INTO WELL-DEFINED TARGETSIMPACTING GDP, EMPLOYMENT, SME CONTRIBUTION AND LOCALIZATION
KINGDOM of SAUDI ARABIA’S (KSA) VISION 2030 – OBJECTIVES AND TARGETS
IncreasePrivate Sector contribution
to GDP
~2,200 Bn SAR
additional GDP from private sector
Increase SME Contribution to
GDP
~1,250 Bn SAR
additional GDPfrom SMEs
Decrease Unemployment
Rate
~2.3 Mn
new jobs required
Increase Export Contribution to
Non-oil GDP
~1,350 Bn SAR
increase in non-oil exports
Increase Localization in
O&G Sector
~60 Bn SAR
increase in O&G local procurement
2015 40% 20% 11.6% 16% 40%
2030 65% 35% 7% 50% 75%
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Classification: Internal Use
VISION REALIZATION PROGRAMS HAVE BEEN DESIGNED TO TRANSLATE THE VISION INTO ACTIONS AND MEASURABLE OUTCOMES
Public Investment Fund
Vision Realization Programs
VRPs underpin the implementation of The Vision by defining clear targets, action plans, KPIs and a leadership – execution infrastructure
Focus of presentation
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Classification: Internal Use
THE NIDLP PROGRAM AIMS TO TRANSFORM THE KINGDOM INTO A LEADING INDUSTRIAL POWERHOUSE IN FOUR PROMISING GROWTH SECTORS
Sector Focus
Aspirations of NIDLP
Transformation of the KSA01Into a leading industries powerhouse and a
global logistics hub in promising growth sectors
02
Job CreationGenerate major job opportunities for Saudi citizens
03TradingImprove KSA trade balances
04Local ContentMaximize local content
Source: NIDLP
Logistics
03
04
02
01Industry
Energy
Mining
Focus of presentation
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Classification: Internal Use
Source: NIDLP
LOGISTICS STRATEGY AIMS TO TURN KSA INTO A LOGISTIC HUB BY DEVELOPING KSA AS A EXPORT & REGIONAL PLATFORM, AND IMPROVING CONNECTIVITY
Transforming KSA Into a Logistics Hub
Promoting Ease / Possibility of Living Across KSA
Enhancing Financial Sustainability
Improving Public Entity Performance
Logistics Sector Strategy Dimensions Logistic Hub – Key Components
Regional Platform (For Re-Exportation)
Transform KSA into a regional distribution hub in GCC and East Africa that offers lower prices and higher speed than competitors
Local and Internal ConnectivityUse highly branched distribution system that allows distributing goods and inputs at optimal cost across current and target population centerswith development plans
Export Platform
Position KSA as an efficient export platform that can set correct estimations and provide capacity and capabilities required to avoid wastage, in order to support overall national industrial diversification strategy
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Classification: Internal Use
KSA NEEDS TO INVEST IN KEY ENABLERS AND LATEST TECHNOLOGY TRENDS TO OUTPERFORM ITS REGIONAL PEERS AS A LOGISTIC HUB
Source: NIDLP
Expanded T&L Capacity
Expand the capacity of key T&L assets in order to remove bottlenecks and stimulate growth of cargo and passenger transport
Digitized and streamlined operations
Streamline, digitize and automate logistics and border procedures in order to reduce freight time and cost
Improved Governance & Regulations
Improve sector governance and regulations and promote the participation of the private sector in order to increase logistics and transport level
Key Enablers Key Sector Technology Trends
Use of Big Data to Analyze Passenger Flow
Eco-Friendly and
Autonomous Vehicles
Automation and allocation of berth management in the maritime sector
Use of Ultra High-Speed
Transportation
Real-time tracking of goods and people at
airports
To become a pioneering logistics hub, KSA needs to outperform its peers in freight speed, cost and services
(e.g., 5 day reduction in export time vs 7 days in 2016)
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Classification: Internal Use
Source: NIDLP
NIDLP HAS ALREADY HIGHLIGHTED SEVERAL INVESTMENT OPPORTUNITIES IN LOGISTICS SECTOR, IN PARTNERSHIP WITH KEY STAKEHOLDERS…
Establishment of a Wheel
Manufacturing Plant for Trains
for local and regional demand
Establishment of a Plant for Packing and
Winding Traction Motors
Intermodal Yard
Operation for general and cargo rails
Car/Wagon Manufacturing/
Assembly
Concession to Operate and
Maintain metro lines
and its related facilities (e.g., Mashaaer al
Mouqaddassa)
Cargo Handling
Services in King AbdulazizInternational
Airport (KAIA)
Develop and Operate
Logistics Zone Close to Major
Sea Ports
Op
po
rtu
nit
yP
rom
ote
r
NON-EXHAUSTIVE
Example Logistics Sector Opportunities in KSA
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Classification: Internal Use
… AND OFFERS AN ATTRACTIVE VALUE PROPOSITION TO INVESTORS
Infrastructure
R&D and Innovation
Export Enablement
Talent
Funding
Regulations and Doing Business
National transport strategy and integrated masterplan to ensure alignment and integration of logistics projects
Intensified public spending in RDI activities in NIDLP sector creating positive externalities for industrial investors
Industry 4.0Industry 4.0 enablement package, including loans, industry 4.0 capability centers, model factories, telecom infrastructure, etc.
• Export enablement package, including new export financing solutions such as EXIM bank and streamlined export procedures
• Export promotion of products manufactures locally
Access to academia, facilities, and equipment to support development of human capital
Access to loans up to 75% of the capital invested, at more competitive rates for strategic investments
Financial IncentivesFinancial support tailored to the different players (e.g., 3PL) in the logistics sectors
• Flexible national PPP regulatory framework• International standards for aviation safety
and security• Improved safety of railway system
Source: NIDLP
NIDLP - Value Proposition to Investors
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Classification: Internal Use
NUSANEDTM IS SABIC’S FLAGSHIP HOLISTIC LC PROGRAM TO SUPPORT VISION 2030 LOCAL CONTENT AGENDA
An Opportunity Gate program to reach out, receive and analyze investor opportunities
SABIC Support Packages (e.g., product offering , tech. support and shared services ) to enable investor opportunities
Enable Financing for attractive opportunities through NUSANED Investment, SABIC’s partners, and shareholding investment arms
Develop Workforce Capabilities to enable investor opportunities
MUAHAL
D
Access to Finance
C
DAEM
B
ENTEMA
A
Stakeholder Engagement: Partner or seek endorsement with relevant KSA authorities/agencies
NUSANED Investment™SABIC local content and business development company
12CONFIDENTIAL
Classification: Internal Use
NUSANED INCLUDES A GOVERNANCE TO CATALYZE LOCAL CONTENT AND
UNIFY NATIONAL EFFORTS
The Head of NAMMA
The GovernorThe Governor
Deputy Minister of Labor
Deputy Minister For Companies Affairs
CEO
NUSANED Executive Committee
Unifying the national efforts and intensive coordination between the public and private sectors
Catalyzing the local content for future targeted sectors by National Industrial Strategy
Three scheduled meetings yearly
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Classification: Internal Use
WE COLLABORATE WITH A LARGE SYSTEM OF LOCAL CONTENT PARTNERS TO ACHIEVE THE SUCCESS OF NUSANED
National Champions
EnablingEcosystem
TrainingInstitutions
Financing Agencies
Policy Making
• Analyze current and future
workforce trends to identify gaps
and future needs
• Joint participation in local and
international conferences,
exhibitions and workshops
• …
• Changes in policies, criteria and
implementation plans where relevant
• Facilitate issuance of permits/licenses
• …
• Contribution to collaborative initiatives
• Share market data, information and opportunities
• …
• Sponsor entrepreneurs
• Training for local workforce
• …
• Enabling investors’ funding
• …
Source: SABIC
THANK YOU