Japan-Saudi Arabia
Industrial Cooperation Task Force
1st February, 2012
Tadatsuna Koda Japanese Coordinator, Japan-Saudi Arabia Industrial
Cooperation Task Force
President, JCCME
Japan-Saudi Arabia Industrial Cooperation
- Past activities, achievements and future policy -
Kicked off on the basis of agreement between the leaders of Japan and Saudi Arabia.
1. Overall Picture of Industrial Cooperation
Energy Cooperation (as reference) Industrial Cooperation
Regular consultation meeting on energy policies
between Agency for Natural Resources and Energy and
Ministry of Petroleum and Mineral Resources
A project to store crude oil from Saudi
Arabia in the national oil reserve tanks in
Okinawa (started in February 2011)
Japan-Saudi Energy Consultation meeting
Stockpile cooperation
The following projects are underway for Ministry of
Petroleum and Mineral Resources, Saudi Aramco, and
Ministry of Water and Electricity:
(1) Solar power generation feasibility study
(2) Implementation of policy development training and
workshop
Renewable energy/Energy saving cooperation
The “Japan-Saudi Arabia Industrial Cooperation Task Force” was established on the
“ Joint Statement between the Kingdom of Saudi Arabia and Japan ” in April 2007.
As employment creation through industry diversification is an urgent task for the
kingdom, the Ministry of Commerce and Industry and Ministry of Petroleum and
Mineral Resources are working vigorously.
1. Assistance for Japanese firms
considering investment in
Saudi Arabia
2. Assistance in human resource
development in Saudi Arabia
3. Assistance in formulating small
and medium enterprise
development policy
Activities of Japanese task force: Three Pillars
Synergy
Riyadh Business Support Office
External view of Saudi Electronics & Home
Appliance Institute (SEHAI)
Japan-Saudi Joint workshop at Riyadh Chamber
of Commerce and Industry Minister Edano and Minister Naimi
Vice Minister Matsushita
and Advisor Turki
1
Okuda Chairman, JCCME
Konaga Advisor, Japan-Saudi Arabia
Society
Saito Special advisor, Mizuho Corporate
Bank
Shigehisa President, JGC group
Masuda Advisor, Mitsubishi Corporation
Yonekura Chairman, Sumitomo Chemical/
Chairman, Keidanren
Gover
nm
ent
Minister for Economy, Trade and Industry
Chairman of Board Members, Nihon Keidanren
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Mr.
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Executive Members
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JET
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JBIC
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JIC
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exper
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JOG
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Kei
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JCC
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Senior Representatives
Task force of Japan
Advisor, Ministry of Petroleum and Mineral Resources,
Minister for Commerce and Industry,
Minister for Petroleum and Mineral Resources
Task force of Saudi Arabia
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Mr.
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Pre
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SB
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Senior Representatives
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Dev
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Executive Members
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SA
GIA
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KA
CS
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TF Secretariat TF Secretariat
Advisor group
Note: JCCME: Japan Cooperation Center for the Middle East
JOGMEC: Japan Oil, Gas and Metals National Corporation
Keidanren: Japan Business Federation
JETRO: Japan External Trade Organization
JICA: Japan International Cooperation Agency
SMRJ: Organization for Small & Medium Enterprises and Regional Innovation, JAPAN
JBIC: Japan Bank for International Cooperation
SID
F
NEXI: Nippon Export and Investment Insurance
JCCP: Japan Cooperation Center, Petroleum
Promoted as a joint project encompassing the whole public and private sectors of Japan and Saudi Arabia.
1. Overall Picture of Industrial Cooperation (Reference)
2
Conducted a survey of about 2,400 companies.
Held 27 business seminars (for more than 1,600 companies in total).
Visited about 600 Japanese companies.
2. Activities of Japanese Task Force (Back Ground)
Saudi Arabia Business Guidebook
(Published by JETRO)
President of National Industrial Cluster
Development Program Shalabi delivers a
lecture at JETRO-sponsored Saudi Arabia
Business Seminar (July 2009).
- Assistance in relation to Japanese firms’ investment in Saudi Arabia
Encouraging Japanese firms to invest in Saudi Arabia
Survey of Saudi Arabian Major Companies (conducted twice)
Aim: To find out if there is a need, among major local conglomerates/companies, for a joint venture with Japanese firms
Surveyed area: Riyadh, Eastern State (Dammam, Dhahran, al-Khobar, and Al Jubail), Jeddah
Outline of the survey
-Selection was carried out centering on mainly those conglomerates or major enterprise groups that seemed to be
interested in the manufacturing business
-We visited 46 private companies and total 7 government-run or other public corporations in 3 major cities to hear if
there is a need for a joint venture with Japanese firms
3
The result of survey of local conglomerates/companies concerning needs for Japanese companies/technologies
Sectors where one can take advantage of Saudi Arabia’s strength (energy-related industries such as petroleum/gas, etc., and those surrounding the petrochemical industry)
Areas around petroleum/gas and petrochemical industry:
Safety valve, flow meter (for weighing crude oil/petroleum products), steel processing (pressure container, heat-exchange device, etc.), additives, and catalytic agents
Petrochemical downstream area: Tires
Key priority sectors in terms of national budget allocation
Urban development/Mega project related: Construction machinery, housing, septic tanks, heat shield films/paints,
and ceramics such as toilet bowls
Energy infrastructure: Solar panel, polysilicon, generator, and smart-grid related equipment
Medical service sector: Medical instrument/equipment (including disposable ones), pharmaceutical products
Sectors dealing with hearty local consumption
Aluminum downstream: Aluminum cans, and aluminum auto parts
Electrical machines: Compressors for air-conditioners/refrigerators, and walkie-talkies
Processed foods: Vacuum-packed foods such as cup noodles, functional edible oil/Mayonnaise, and baby foods
Service/Human resource development
Assistance with establishment of male/female training institutions (nursing, etc.), and call center that takes advantage
of female workforce/telemarketing
4
2.1 Assistance for Japanese firms considering investment in Saudi Arabia (Back Ground)
Survey of Saudi Arabian Major Companies (conducted twice)
2.1 Assistance for Japanese firms considering investment in Saudi Arabia
Isuzu Motors (announced in February 2011)
Manufacture/Sale of automobiles, one of Saudi Arabia’s priority industrial cluster areas.
The first plant to produce finished cars in Saudi Arabia. A founding project for Saudi automobile industry.
In the future, it is expected that the kingdom will become a manufacturing/export base for the surrounding countries.
Importance/Achievement
Outline of the business Scene of signing ceremony
Isuzu F series
● Business details: Assembly/Sale of middle-size trucks
● Form of investment: Establishment of a local corporation in charge of local assembly/sales
● Scale of business: Investment amount: Approx. 116 million USD
Target volume: 600 units per year initially; 25,000 units in the future
● Site: Damman 2nd Industrial Estate
● Business starting year: FY2012
Five projects get underway now investing in automobile manufacturing, metal processing, water
treatment and IT-related areas, contributing to industrial diversification of Saudi Arabia.
Toyobo/Itochu (announced in February 2010)
The first manufacturing/sales business of RO membrane elements for seawater desalination in Saudi Arabia.
Contributing to stable supply of freshwater to satisfy Saudi Arabia’s rapidly increasing demand.
Importance/Achievement
Outline of the business Scene of signing ceremony
RO membrane elements
for seawater desalination
● Business details: Manufacture/Sale of RO membrane elements for seawater desalination
● Form of investment: Establishment of a local joint venture company in charge of local
production/sale
● Scale of business: Investment amount: Approx. 2.7 million USD
Target sales: 20 million USD (FY2011) --> 53 million USD (2015)
● Site: Headquarter/Plant: Rabigh (in Rabigh PlusTech Park),
Sales Dept: Riyadh
● Business starting year: FY2011
Photos by the
courtesy of
respective company
NOTE: 1USD = 75 yen
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NOTE: 1USD = 75 yen
J-Power Systems/Marubeni Metals (Announced in April 2009)
Manufacture/Sale of processed metal, one of Saudi Arabia’s priority industrial cluster areas.
Creates employment for Saudi Arabian people and transfers technology, keeping an eye on export for Gulf countries/European markets.
Stable supply of cables for offshore oil /gas field development by Aramco.
Importance/Achievement
Outline of the business Cables to be provided Loading at the port plant
Business details: Manufacture/Sale of underwater power cable
Form of investment: Establishment of a local joint venture company in
charge of local production/sale
Scale of business： Investment amount: Approx. 20 million USD
Target sales: Approx. 33 million USD (period ending
in December 2011)
Site: Eastern state
Business starting year: FY2011
Five projects get underway now investing in automobile manufacturing, metal processing, water
treatment and IT related areas, contributing to industrial diversification of Saudi Arabia.
Kubota (announced in March 2009)
Manufacture/Sale of processed metal, one of Saudi Arabia’s priority industrial cluster areas.
Creates employment for Saudi Arabian people and transfers technology.
Improves Saudi Arabia’s export competitiveness for Gulf countries.
Importance/Achievement
Outline of the business Cracking coil
Reformer tube
Business details: Manufacture/Sale of cast steel products
Form of investment Establishment of a joint venture company with local businesses
Scale of business Investment amount: Approx. 20 million USD
Target sales: Approx. 100 million USD (FY2014); approx. 133 million USD
(2017)
Site: Damman 2nd Industrial Estate
Business starting year: February 2010
Photos by the
courtesy of
respective company
NOTE: 1USD = 75 yen
NOTE: 1USD = 75 yen
2.1 Assistance for Japanese firms considering investment in Saudi Arabia
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Index Holdings (Announced in June 2008)
Transfers Japanese multi-media-related technologies and creates employment.
Also contributing to the social advancement of Saudi Arabian women.
Participating in the operation of “Multimedia Technologies Center for Excellence” established by the funds
of Saudi Arabia (KACST).
Importance/Achievement
Outline of the business
Business partnership signing ceremony with KACST
Contents provided by the company (examples)
Business details: Mobile contents & service dissemination business,
B to C information dissemination service business,
entertainment business
Form of investment Establishment of a joint venture company with local
businesses; partnership with government agencies
Scale of business: Investment amount: Approx. 2 million USD
Site: Riyadh
Business starting year: FY2008
Five projects are now underway investing in automobile manufacturing, metal processing,
water treatment and IT-related areas, contributing to industrial diversification of Saudi Arabia.
Photos by the
courtesy of
respective company
2.1 Assistance for Japanese firms considering investment in Saudi Arabia
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Industrial Pyramid Approved Investment
Investment under consideration (supported by the TF Secretariat)
Final consideration Currently studying the market/investment environment
• Index (mobile contents, CG
technology) • Electronic money business
• Educational solution business
• Isuzu Motors (manufacture of
truck)
• Manufacture of large energy-saving air-conditioning
equipment
• High-efficiency home business
• Manufacture of small power generator
• Manufacture of confectionary
• Manufacture of soap/disinfectant for medical service
providers
• Kubota (manufacture of cast
steel pipe)
• Toyobo/Itochu Plantec
(manufacture of RO membrane
for seawater desalination)
• JPS/Marubeni Metals
(manufacture of underwater
cable)
• Establishment of valve
production/maintenance
center
• Manufacture of membrane for seawater desalination
• Manufacture of septic tank
• Manufacture of underwater cable
• Manufacture of industrial filters
• Manufacture of industrial filtering machinery
• Manufacture of pump blower
• Manufacture of crystalline silicon
• Manufacture of superabsorbent polymer
• Manufacture of tin for steel can
• Manufacture of drum
• Processing of metal products for electrical machines
At present, 21 projects are being supported,
encompassing the broad spectrum of a pyramid-like industrial structure from the very bottom to the top.
Three projects are in the final stage of consideration. In addition, an increasing number of projects are likely to be supported.
Components/Modules
Final products/Consumer
goods
Service
Materials
2.1 Assistance for Japanese firms considering investment in Saudi Arabia
8
Images of ongoing development projects at their completion (selective extract)
• We visited and conducted surveys around 20 places including local enterprises and
government agencies, in order to understand the current status of urban development/
industrial estate development in Saudi Arabia.
• We obtained detailed information concerning a total of 26 development projects of urban
areas, industrial estates, and universities.
Field study of urban development/industrial estate development
A variety of activities are underway to explore further investment opportunities.
2.1 Assistance for Japanese firms considering investment in Saudi Arabia (Reference)
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Three vocational training institutes to meet the expectations of Saudi Arabia.
2.2 Assistance in Human Resource Development
Saudi Japanese Automobile
High Institute
(SJAHI)
Higher Institute for Plastics
Fabrication
(HIPF)
Saudi Electronics & Home Appliances Institute
(SEHAI)
Foundation/Place September 2002; Jeddah September 2007; Riyadh September 2009; Riyadh
Japanese
cooperating
organization
Government of Japan, Japan
International Cooperation Center,
Japan Automobile Manufacturers
Association, etc.
Saudi Petrochemical Development Co.
(SPDC), JCCME
JCCME
(technical cooperation by Japanese major home appliance
manufacturers; assistance of Nihon Kogakuin College with
curriculum preparation)
Background Cooperation based on “Japan-Saudi
Cooperation Agenda” (signed by King
Abudllah)
SPDC started its cooperation in response to
the request from the Saudi government
Based on the request from the Saudi side at the Japan-Saudi
Business Council (January 2008)
Number of
students/graduates
Current enrollment: 489 /Graduates:
1,618 (November, 2011)
Current enrollment: 420/Graduates: 482
(October, 2011) Current enrollment: 191 /Graduates: 67 (November, 2011)
Scene of local study
tour
Governor of Jeddah Mishaal and 6th
graduates
SJAHI skill contest
Visit by Riyadh Governor Prince Salman
and the labor minister Al-Gosaibi
Visit by Okuda, the special envoy of Prime
Minister
Ambassador Endo and Board Member of SEHAI
Ambassador Endo and Prince Mohammed
10
One of the national industry strategies of Saudi Arabia. A policy proposal was submitted by the Japanese side.
2.3 Assistance in Formulating SME Development Policy
The “Small and Medium Enterprise Policy” is one of the pillars of
“National Industry Strategy” currently being worked out by the Saudi
government.
Instructed by HRH Prince Faisal bi Turki, H.E. Dr. Sulaiman Vice
Minister for Commerce and Industry visited Japan, and agreed to
implement Japan-Saudi cooperation in relation to SME policies (May 2008).
経緯
1. Promote activities to inspire an entrepreneurial mindset and promote
entrepreneurship education.
2. Human resource development to nurture managers/engineers.
3. Take advantage of the chamber of commerce, industry groups, etc.
4. Improve financial services to SMEs.
5. Promote partnerships between large enterprises and SMEs.
6. Consider assistance policies based on characteristics of individual
industry.
7. Create a department/agency, inside the government, in charge of
promotion of SMEs.
政策提言のポイント
Submitted the Policy Recommendation for SME Promotion to
H.E. Mr. Alireza, Minister for Commerce and Industry in April 2010.
Japan-Saudi workshop at Riyadh Camber of
Commerce and Industry
(scene of the meeting)
Japan-Saudi workshop at Riyadh Camber of Commerce
and Industry
(ceremonial photograph)
Background
Key elements of the policy proposal
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Japan-Saudi Arabia Industrial Cooperation Task Force has achieved significant
results over the past four years. In concrete terms, five firms have made direct
investments, three training institutes were established and the Policy
Recommendation for SME Promotion was submitted.
As many Japanese firms are giving positive consideration to direct investment in
Saudi Arabia, it is anticipated that the scale of investment will expand further in
the future.
In addition, the scope of cooperation between Japan and Saudi Arabia is also
expanding. Not just direct investment in the manufacturing sector, but
cooperation in such new areas as water and energy saving/new energy is also
progressing.
3. Summary of What the Task Force Has Achieved so Far
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How to proceed with Japan-
Saudi Arabia Industrial Cooperation Task Force from this time forward
13
In order to keep promoting industrial cooperation between two countries as we have been doing, we would like to carry out our Task
Force in accordance with the following three policies.
Policy No. 2
Provide after-care support for those firms that have decided to invest.
Policy No. 1
Take full advantage of what the Joint Task Force has achieved so far
for the purpose of further development.
Policy No. 3
Promote project-based direct investment involving multiple number
of firms.
企業Ｂ
連携
Support human resource development
Support development of industry system
After-care support for investing firms
Project-based investment involving multiple firms.
(Water/Energy saving/New energy)
Advantage of what Joint TF has achieved
Support investment
How to proceed with Japan-
Saudi Arabia Industrial Cooperation Task Force from this time forward
Company A
Company B
Company C
Company D Company E
Company X Company Y
Company Z Social infrastructure
sector
Service sector
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