Saudi Export ProgramSaudi Export ProgramSaudi Italian Business ForumSaudi Italian Business Forum
Council of Saudi ChambersCouncil of Saudi ChambersNov. 6Nov. 6thth , 2010 , 2010
Presentation OutlinePresentation Outline
The Saudi Fund for Development.The Saudi Fund for Development.
Saudi Oil and Non-Oil Exports.Saudi Oil and Non-Oil Exports.
Saudi Export Program: Saudi Export Program: Establishment/Objectives.Establishment/Objectives.
SEP Financial Instruments: Funding/Insurance.SEP Financial Instruments: Funding/Insurance.
Co-operation with Banks/Financial Institutions.
SEP Achievements.SEP Achievements.
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The Saudi Fund For DevelopmentThe Saudi Fund For Development
EstablishmentEstablishment100%100% Government Government InstitutionInstitution
Established in 1975Established in 1975ObjectivesObjectives * *International International
DevelopmentDevelopment..
* *Support of Saudi Support of Saudi ExportsExports..
Capital (US$)Capital (US$)About 8 BillionAbout 8 Billion..
No. of Projects No. of Projects FinancedFinanced
430430
Total Project Total Project FinancingFinancing
US$ 7,7 BUS$ 7,7 B
Beneficiary CountriesBeneficiary Countries7373
Export Support (US$)Export Support (US$)About 3,5 BillionAbout 3,5 Billion..
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* * Source: SFD Annual Report.Source: SFD Annual Report.
Saudi Exports (2005-2009)Saudi Exports (2005-2009)(USD Billion)(USD Billion)
YearYearNon Oil Non Oil ExportsExports
ExportExport OilOil TotalTotal
200520051919162162181181
200620062121192192213213
200720072424205205229229
200820083131281281312312
200920092929163163192192
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* * Source: Central Department of Statistics & Information.Source: Central Department of Statistics & Information.
Saudi Exports During 2005 - 2009Saudi Exports During 2005 - 2009 (USD Million) (USD Million)
DescriptionDescription2005200520062006200720072008200820092009
Gulf Cooperation CouncilGulf Cooperation Council12,05912,05915,62515,6251818 , ,96596522,06522,06519,078
Other Arab League CountriesOther Arab League Countries9,4489,44811,18911,18912,27712,27717,03417,03411,090
Islamic not Arabic countriesIslamic not Arabic countries8,6008,60010,41610,41611,87311,87314,57214,5728,867
Asian not Arabic ,not IslamicAsian not Arabic ,not Islamic87,17987,179105,480105,480115,348115,348161,220161,220104,659
African not Arabic, not IslamicAfrican not Arabic, not Islamic4,2244,2244,4744,4744,6544,6546,6116,6113,8263,826
Australia and OceaniaAustralia and Oceania480480628628697697863863530
North AmericaNorth America29,22129,22133,24433,24441,06641,06654,18854,18824,270
South AmericaSouth America188218822,0232,0232,3462,3463,4593,4591,994
Europe CountriesEurope Countries27.47627.47628,20728,20725,94425,94433,02433,02417,712
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* * Source: Central Department of Statistics & Information.Source: Central Department of Statistics & Information.
The The First Five Importing CountriesFirst Five Importing CountriesIn 2009(USD Billion)In 2009(USD Billion)
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* * Source: Central Department of Statistics & Information.Source: Central Department of Statistics & Information.
Export Export DestinationDestinationJapanJapanUSAUSAChinaChinaS.KoreaS.KoreaIndiaIndia
RankingRanking1122334455
ExportsExports29292323212118181414
What does Saudi Arabia Export?What does Saudi Arabia Export?
Crude OilCrude Oil Other Oils (Fuel, Diesel and Gas)Other Oils (Fuel, Diesel and Gas) PetrochemicalsPetrochemicals Plastic ProductsPlastic Products Building MaterialsBuilding Materials Trucks/Auto Spare PartsTrucks/Auto Spare Parts Machinery (Generators, Transformers)Machinery (Generators, Transformers)
Agricultural Equipment (Irrigation Systems/Pumps)Agricultural Equipment (Irrigation Systems/Pumps)
Steel & PVC PipesSteel & PVC Pipes Food Products/ Beverage Products/ Dairy ProductsFood Products/ Beverage Products/ Dairy Products
Services, Contracting, ProjectsServices, Contracting, Projects
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Power Towers/Cables/AccessoriesPower Towers/Cables/Accessories Traffic Lights/Road AccessoriesTraffic Lights/Road Accessories
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Established in 1999 to develop and diversify Saudi Established in 1999 to develop and diversify Saudi non-oil exports, non-oil exports,
SEP’sSEP’s Objectives Objectives
Maximize technical cooperation, joint financing and Maximize technical cooperation, joint financing and reinsurance arrangements with most international and reinsurance arrangements with most international and regional banks/Institution involved in Trade Financing. regional banks/Institution involved in Trade Financing.
Motivate Saudi exporters to explore and enter new Motivate Saudi exporters to explore and enter new markets by mitigating risks associated with International markets by mitigating risks associated with International trade transactions. trade transactions.
Provide competitive credit facilities and insurance to Provide competitive credit facilities and insurance to Saudi Exporters and foreign buyers.Saudi Exporters and foreign buyers.
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SEPSEP’s’s participation my reach up to 100% of transaction participation my reach up to 100% of transaction value based on the risks involved and exposure limits.value based on the risks involved and exposure limits.
Basic Requirements of Basic Requirements of SEPSEP Operations Operations
Local value added should be more than 25%. Local value added should be more than 25%.
Exports should be of Saudi origin.Exports should be of Saudi origin.
SEPSEP complements commercial banks and does not complements commercial banks and does not competing them. competing them.
SEPSEP offers financial facilities in Saudi Riyals or United offers financial facilities in Saudi Riyals or United States Dollars.States Dollars.
Minimum Transaction amount: SR 100,000, Minimum Transaction amount: SR 100,000, (Equivalent to about 27.000 US Dollars ).(Equivalent to about 27.000 US Dollars ).
SEPSEP does not support exports of crude oil.does not support exports of crude oil.
11BeneficiariesBeneficiaries
Saudi exporters (Saudi companies and establishments),Saudi exporters (Saudi companies and establishments),
Local and Foreign Banks/Financial Institutions that Local and Foreign Banks/Financial Institutions that provide financing facilities for eligible Saudi exports.provide financing facilities for eligible Saudi exports.
Foreign private or public Buyers of Saudi goods and Foreign private or public Buyers of Saudi goods and services,services,
Foreign Companies Manufacturing and Exporting from Foreign Companies Manufacturing and Exporting from Saudi Arabia, Saudi Arabia,
Local buyers (Saudi companies and establishments) Local buyers (Saudi companies and establishments) exporting Saudi products,exporting Saudi products,
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Security / CollateralSecurity / Collateral
Depending on the nature of each Depending on the nature of each export transaction and the types of export transaction and the types of commercial & political risks involved,commercial & political risks involved, SEPSEP would seek payment securities would seek payment securities which it deems necessary. which it deems necessary.
SEPSEP Tools Tools for Supporting Saudi Exportsfor Supporting Saudi Exports
Funding InstrumentsFunding Instruments
Insurance InstrumentsInsurance Instruments
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Marketing & Information SupportMarketing & Information Support
14Funding Instruments of Funding Instruments of SEPSEPA ) Direct Funding:A ) Direct Funding:
(1) Supplier Credits(1) Supplier Credits
Supplier Credit assists Saudi exporters to provide the Supplier Credit assists Saudi exporters to provide the required credit to the foreign importersrequired credit to the foreign importers
(2) Local Buyer Credits(2) Local Buyer Credits
SEPSEP offers such credit facilities to Saudi businessmen (local offers such credit facilities to Saudi businessmen (local buyers) and investors who execute projects outside the KSA buyers) and investors who execute projects outside the KSA and need financing fromand need financing from SEPSEP to export Saudi goods andto export Saudi goods and services to use them in the project implementation.services to use them in the project implementation.
(3) Foreign Buyer (Importer) Credits(3) Foreign Buyer (Importer) Credits
These credit facilities assist importers from outside the These credit facilities assist importers from outside the KSA to obtain the required financing directly from SEP.KSA to obtain the required financing directly from SEP.
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B ) Indirect Funding:B ) Indirect Funding:
Lines of Credit for Banks, Lines of Credit for Banks, Financial institutions, Financial institutions, Large Firms.Large Firms.
Usually provided to Commercial Banks and Usually provided to Commercial Banks and Financial institutions which will be acting as Financial institutions which will be acting as agents foragents for SEPSEP in the in the importer’s country.importer’s country.
Focus on SME’s as main beneficiaries.Focus on SME’s as main beneficiaries.
16Repayment periodsRepayment periods
Long Long TermTerm
Up to 15 Up to 15 yearsyears
Capital and durable goods, Capital and durable goods, turnkey contracts, projectsturnkey contracts, projects..
Short Short TermTerm
Up to 2 Up to 2 yearsyears
Consumable goods, raw Consumable goods, raw materials.materials.
Medium Medium TermTerm
Up to 7 Up to 7 yearsyears
Consumable durables goods, Consumable durables goods, semi capital goods.semi capital goods.
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Export Credit Insurance and Guarantee FacilitiesExport Credit Insurance and Guarantee Facilities
ObjectivesObjectives::
To offer Guarantees for Exporters against To offer Guarantees for Exporters against non-payment risk.non-payment risk.
To offer Guarantees for commercial banks to To offer Guarantees for commercial banks to finance exporters. finance exporters.
Non-payment Risk CoveredNon-payment Risk Covered::
Commercial Risks – Commercial Risks – ( Covers up to 90%).( Covers up to 90%).
Political Risks - Political Risks - ( Covers up to 90%).( Covers up to 90%).
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Types of Types of Export Credit Insurance PoliciesExport Credit Insurance Policies
(1) Whole Turn-over policy.
(2) Specific Transaction policy.
(3) Fields of Co-operation with Local Banks.
(1) Whole Turn-over policy(1) Whole Turn-over policy19
This Policy Covers all exporter’s risks involved This Policy Covers all exporter’s risks involved with registered importers in different countries.with registered importers in different countries.
Subject to the approval of Subject to the approval of SEPSEP , Saudi Exporters , Saudi Exporters (Policy Holders) Can add other importers to the (Policy Holders) Can add other importers to the policy during its validity. policy during its validity.
SEPSEP studies and evaluates each importer and studies and evaluates each importer and assigns an adequate credit limit for that assigns an adequate credit limit for that importer.importer.
Whole Turn-over Policy is usually short term Whole Turn-over Policy is usually short term (about one year).(about one year).
(2) Specific Transaction policy(2) Specific Transaction policy
This policy covers all export risks involve in a This policy covers all export risks involve in a single transaction.single transaction.
Under this policy Under this policy SEPSEP could cover open account could cover open account customers or confirm Documentary Credits.customers or confirm Documentary Credits.
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(3) Fields of Co-operation with Local Banks(3) Fields of Co-operation with Local Banks
A-A- Bank’s Acceptance to finance Bank’s Acceptance to finance SEPSEP Insurance Insurance Policyholders (post shipment).Policyholders (post shipment).
C-C- Documentary Credit Insurance Policy (DCIP).Documentary Credit Insurance Policy (DCIP).
E-E- Exchange of Credit Information and Reports. Exchange of Credit Information and Reports.
B-B- Guarantee for Financing of Working Capital Guarantee for Financing of Working Capital (Pre Shipment) for Exporters (Policy Holders). (Pre Shipment) for Exporters (Policy Holders).
D-D- Confirming of Incoming L/C’s (Specific Operations).Confirming of Incoming L/C’s (Specific Operations).
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Type of SEP FacilitiesType of SEP FacilitiesValueValue (SAR Million)(SAR Million)
ValueValue (USD Million)(USD Million)
Direct FundingDirect Funding4,3244,3241,1531,153
Lines of Credit Lines of Credit 1,7701,770472472
Guarantee & InsuranceGuarantee & Insurance8,5128,5122,2702,270
Total Facility Amount Total Facility Amount 14,60614,6063,8953,895
No. of Beneficiary CountriesNo. of Beneficiary Countries47474747
SEP'sSEP's AchievementsAchievementsUntil Sep. 30,2010Until Sep. 30,2010
* * Source: SEP Annual Report.Source: SEP Annual Report.
+966 1 4659399- 4658117 Fax +966 1 4659699 P.O. Box 50483 Riyadh 11523+966 1 4659399- 4658117 Fax +966 1 4659699 P.O. Box 50483 Riyadh 11523
www.sep.gov.sa/arwww.sep.gov.sa/ar