The Opportunity Arabia 8 conference, organized by the Middle East Association, provided an excellent forum for business people to learn about Saudi Arabia’s robust trade and investment prospects and to network with commercial contacts. The conference was held in London on September 22, 2011 and gave the 200 or so attendees a day-long assembly of keynote speakers and market specialists. They provided the background, details and “how to” for seizing the commercial opportunities in Saudi Arabia that conference Chairman Sir Alan Munro characterized as “the Kingdom is on a roll, a massive economic roll.” The Middle East Association put it this way in the conference overview:
“Saudi Arabia remains stable, secure and prosperous in a region which has seen turmoil, civil war and violence since last February. It is the largest economy in the Middle East and wields growing political and economic influence, both regionally and internationally. To say that business opportunities abound across the board, as they have done for most of this decade, is almost a cliche, but it could not be more true.
“The infrastructure projects market in the Kingdom is colossal; transport, residential housing, schools, hospitals, industrial zones and economic cities, are all areas which will be covered, to a greater or lesser extent in today’s Seminar. The Saudi population numbers over 25 m and is growing at 2% pa. This alone dwarfs any other GCC country. As an indicator, the current 9th Development Plan allocates $67 bn for half a million new homes; $195 bn on education; $73 bn on health care; and $30 bn for transport — all to be accounted for within the next three years.
“The ride into Riyadh from the airport takes the visitor past the Princess Noura University, now complete, which will be home to 40,000 Saudi women. The scale is breathtaking and includes an overhead monorail system to transport students from living quarters to faculties and back. Size notwithstanding, most projects of this nature are government funded and tendered to contractors. The private sector, however, is also an increasingly active investor; Kingdom holding, for example, owned by Prince Waleed bin Talal, has recently awarded the contract to build the much heralded 1km high Kingdom Tower in Jeddah to the Saudi Binladin Group for a cool $1.2 bn.
“The backbone of the Saudi economy remains oil and gas and it is the high oil prices which underpin the Government’s enormous spending power. The Government, however, also recognizes that oil is not infinite and is encouraging economic diversification as well as looking closely at renewables, including solar, wind and nuclear power. Diversification is led by petrochemicals and mining, the latter already a success story and predicted conservatively to account for 8% of GDP by 2020. The extraction of bauxite and phosphates from Al Jalamid mine in central northern Saudi Arabia is now well-known enough; but less is known about the mining of base metals — copper, zinc and lead — and we will be hearing something about the Jabal Sayid copper mine from one of our speakers.”Saudi Arabia is not in the UK’s backyard, but compared with the BRIC countries [Brazil, Russia, India and China] is close enough. There are many British expatriates working in the Kingdom and contributing to its success. Some of those will be available to consult at the Seminar. There is also a growing number of British companies with offices in strategic areas of the Kingdom. There is plenty of room for more.”
SBRIS was pleased to attend this year’s Opportunity Arabia conference and to compile the transcripts and graphic presentation materials that you will find on these pages. We will be circulating keynote addresses and panelists’ remarks in the coming days alongside the slides that accompanied many of the presentations. All of these materials are catalogued on the SBRIS Special Section page titled “Opportunity Arabia 8.” Additional resources were collected last year and are posted to the SBRIS “Opportunity Arabia 7″ Special Section. [Link]
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Opportunity Arabia 8 Forum
September 22, 2011
[Chairman’s Opening Remarks - Sir Alan Munro KCMG]
Sir Alan Munro: Ladies and gentlemen, let us start our proceedings.
We have a very full and a very interesting and worthwhile program. And I’m delighted to see such a very good attendance, and no doubt there’s some later risers joining us as well. Because this, to me, signals as clear evidence of the somewhat overdue but very welcome recovery in business confidence and interest in the Kingdom, which has been a feature of the last 12 to 18 months. We went through a rather lean period as many of you know where there was a tendency on the part of British business to turn its back on the Kingdom despite the fact that the Kingdom itself, in economic terms, was riding the universal crisis surprisingly well. That continues to be the scene.
This turning of backs came as a surprise, indeed I know, a disappointment to many of our counterparts, business counterparts, and political as well in the Kingdom, because a point to emphasize to you at this stage is we out of the U.K. are trading on an historic, longstanding and very solid basis of respect and association with Saudi Arabia, with its government institutions, its parastatals, and its increasingly fledged and active private sector. So in the business that we now look to do, be it in goods or services or whatever, with the Kingdom, we can be sure that there is already a familiarity and a trust. This is a very precious commodity for us, and one I think we should all keep in mind.
You find now, and you’ll be hearing from our keynote speakers, that the Kingdom is on a roll, a massive economic roll. Not only is there a budgetary surplus, but it is being spent, used in civil infrastructure, in the development of its economy and of its society, and in the development of a more mature and internationally focused industry outside the hydrocarbons region. We do have, as Prince Turki emphasized in an interesting speech which he gave a week ago to the European Chambers and Saudi Chambers of Commerce in Brussels, we have one of the world’s most prosperous and high-spending states, and here is a market where we are invited to participate, and which we owe it to ourselves and to our own economy to do so.
You’ll be hearing today from our speakers more about this very impressive background scene. But also you’ll be hearing about certain sectors that have been highlighted. That’s not that they’re to be seen as exclusive at all, but nevertheless, these are key areas, which have been identified where we can develop our business contacts further.
I would also emphasize to you, we have another advantage today for you because the Middle East Association have brought a strong team of, many who are friends of mine, from the British Business Groups in the Kingdom, people who have been long established in the business scene, either with their own outfits, or working in partnership with Saudi firms. They are here, and they are listed indeed in your program, in your brochures, the market experts. They even have all their photographs. If there are any of these market experts in the room, I might ask them if they would stand up in the dark, and so you can just take a quick look. Here we are. Look around, and you’ll find, here we go, more and more. And so you’ll have a very good selection of people from the various business centers who will be happy to talk to you outside, one or two of them are speakers as well, about the dos and don’ts of business with the Kingdom.
There will be networking opportunities. I shall break off at certain points during this busy day to offer fairly brief, but important question and answer discussion sessions, and I ask you to frame question rather than give your own little talks, much as you may be tempted to do so. And I shall try to fairly firm in that area. But we do have a lot of ground to cover and I’m sure that you will find it, and you need to find it, a beneficial, a profitable day of discussion and of opportunity in what is really one of the world’s healthiest economies and the most attractive market prospects that I can see.
Our own business scene, export scene, has in fact shown a recovery. I think this year and perhaps last year too, export levels have been around the three billion pound mark, and then there’s more to come through the services, education, and so on. But there’s still further to go, so let’s start away. And I think you’re going to have your scene set first by Charles Hollis on behalf of the Middle East Association, and then you will hear from our sponsor. We have several very generous sponsors involved today, and the British Offset scene will be described to you subsequently. Charles.
[Welcome - Charles Hollis – Director General, Middle East Association]
Charles Hollis: Thank you very much Allen. And thank you all for coming here today in what is the eighth of our series of Opportunity Arabia conferences. The first one, as some of you will know, was established in 2003 at the suggestion of the then Saudi Ambassador, His Royal Highness Prince Turki al-Faisal.
The conference has come on in leaps and bounds over that period, as I’m happy to say, has the Saudi economy, as Allen has already outlined. I mean, I’m not going to go into specifics and numbers. We have very distinguished panelist speakers to do that. But I think no one interest in the region could’ve missed the announcements over this spring of the massive social infrastructure spending programs, which are coming on the back of an already flourishing economy.
Thanks also are due to Alan, who has chaired the conference really since its inception, I believe. He’s overcome the burden of me working for him when we were both in Saudi Arabia in 1989 to 1992, which for me was a great education and a great pleasure. And he’s been an extremely strong advocate of and a fierce promoter of Saudi-British relations, and we’re delighted to have him here today.
Thanks also to the speakers. On the UK side, we’re delighted, once again to have Baroness Symons, the chair of the Saudi-British Joint Business Council. And again both in government and subsequently she has been an ardent promoter of commercial and other links between the UK and the Kingdom of Saudi Arabia.
On the Saudi side, we’re absolutely delighted to welcome Omar Bahlaiwa, the Secretary General of the Saudi Committee for International Trade. He’s also been a longtime friend of the MEA, who’s given sterling assistance in putting on this conference. I think including helping us to secure some speakers, and I think the quality and the breadth of the speaker panel we’ve put together is a testament to the efforts he’s put in.
I won’t go thanking all the speakers individually, but we are delighted to have them all. I do believe it’s a very good panel, a very broad panel with a lot of knowledge, and you will receive a lot of excellent information from them. I especially would like to thank those who have come from Saudi Arabia to be with us here today, which is a great effort and we really appreciate it.
As Allen said, we would certainly like to thank our sponsors. British Offset have sponsored this conference since the inception, and have genuinely enabled us to put on this. We would not be able to hold a conference without them. They continue to support UK companies in looking at the Kingdom to invest their in order to create wealth and jobs in both the UK and Saudi Arabia.
They’re joined this year amongst our sponsors by BAE Systems and Saudi British Bank, both major players in the Saudi economy. We’re also delighted to have as sponsorship from some of our longtime partners amongst the Saudi companies, Saudi business community, Kanoo Group, al Zamil, represented by al Zamil Offshore, Clariant-Tamimi, al Binali, who continue to work with British companies to ensure that trade between our two countries flourishes.
I’d also like to thank the Media Consortia International, who I should warn you are filming this event today, so make sure your hair is brushed and your tie is tightened and you look nice. But they also have been very supportive this year and we’re very grateful for that.
Finally, I’d like to thank my staff at the MEA who work very hard with not much reward to present events like this, in particular David Lloyd who’s really been the moving force behind this conference in all its eight years. He puts in a tremendous amount of work and certainly the quality of the conference repays his effort. He’ll also be leading our next trade mission to Saudi Arabia, which I think is the twenty sixth of November to the first of December; however, there are flyers on your seats. He has real expertise in the market, and there’s no one better to be introduced to the market by. With that, I thank you once again very much for coming, and I hand you back to Allen. Thank you.
Sir Allen Munro: Thank you very much. I think I can probably assure you that you’re unlikely to appear on Channel Five as a result of this filming that is going to take place. Charles has given me that undertaking already. But that said now, let us move on and hear from David Hatcher, because the, as many of you already know, one of the pioneering endeavors in British investment in Saudi Arabia has been through that close association between British aerospace and the British government through the Ministry of Defense, with initially the Saudi Air Force and also into broader military cooperation. And this led to a parallel exercise of investment of U.K. and other firms being brought into partnership through the British Offset Organization in the development of the production of civil goods. There are some very significant flagship exercises already there in terms of British investment after this. Taking Lyle’s sugar project is one example, and there are many others. And so let us hear a bit more about this if we could from David Hatcher, who’s outfit here are the main sponsors of our conference today.
[Welcome from British Offset Office, Principal Seminar Sponsors – David Hatcher]
David Hatcher: Good morning everybody. I am very grateful to both Charles and Sir Allen for their gracious words about British Offset Office. As he pointed out, I head up the British-Saudi Armed Forces Project, which many of you will be very familiar with, and I’m also the head of the British Offset Office.
We’ve been delighted to sponsor this conference for some years and given the very optimistic and positive remarks that Allen has just made I hope that we’ll be in that happy position for many years to come. But I shouldn’t detract from the other sponsors and partners as well who have very generously contributed.
I believe that this conference has gone from strength to strength. The quality of the speakers and the attendance has always been high, and I think in this year, although I’ve had a lot to do with this area of business throughout my career, this is the first one that I’ve actually attended, certainly the first one I’ve actually spoken at. But I believe that it is the best yet, and I hope we will carry on going from strength to strength.
What British Offset does? I have a team here, and many of you will be familiar with Tony Smith, and he has a team. There will be opportunities for many of you to speak to them throughout the day, and a lot of the best business is done one to one, face to face. General comments from me, if I can confine myself to say that we manage the British Economic Offset program on behalf of the UK Government. It was established to encourage and support investment into the Kingdom through the creation of joint ventures between overseas companies and local Saudi firms. The interesting word there is “overseas.” It doesn’t need to be British companies, It is about inward investment into the Kingdom. And I think we have been ramping that up over several years. Allen mentioned the sugar project, but there are lots of other projects and we are looking to move into areas, non-traditional, and not just areas such as hydrocarbons but education and training and various issues like that including health. So I’m looking forward to making great strides and working together, I’m sure we can achieve a lot of that.
I normally try and make three points, but Allen was very strong this morning when he said don’t go on too long because we have a very packed program so I won’t, and I’ll confine myself to making only one further point. And that is that I can look around the room and despite my being relatively new in this job I can recognize quite a few faces with whom I have worked before. One of the absolute key issues in our relationship is personal relationships and absolutely fundamental to that is continuity. And although I’m relatively new in this job, I’ve spent my career taking an interest in Saudi Arabia, and I hope to do that well after I retire, and that is a very important point that you are committed to the relationship throughout life. It’s not just something that you come in for a few minutes or a few years just to do a job, this is a commitment, and I’m very proud to be a part of that. Thank you.
[Keynote addresses and panelists' presentations will be provided in coming days via email and on the web site. Subscribe to SBRIS at www.SaudiBrit.com or follow SBRIS onTwitter (Link) and FaceBook (Link). ]
About Sir Alan Munro
HMA to Saudi Arabia from 1989 to 1993. Currently Director of the Arab-British Chamber of Commerce and Member of the Saudi-British Business Council
Sir Alan Munro’s long and distinguished diplomatic career has included many appointments in the Arab world, including as Ambassador to Algeria. He also served as Director of the Middle East and North Africa in the FCO before his appointment as Ambassador to Saudi Arabia.
Sir Alan is author of “Arab Storm: Politics and Diplomacy Behind the Gulf War,” an important account that will provide an understanding of the contemporary relationship between Saudi Arabia and the United Kingdom. As described by Amazon.com:
“As Iraqi troops swarmed Kuwait in 1990, British Ambassador to Saudi Arabia Alan Munro played a vital role in putting, and holding, together a formidable coalition to evict them. He reveals here all the behind-the-scenes maneuvering that made this possible. With Western armies once more deployed in the Gulf, this new updated paperback edition of Munro’s book provides a timely reminder of the pressures, pitfalls and potential of international diplomacy in the region.”
About Charles Hollis
Director General, The Middle East Association
After graduating from Oxford with a Degree in PPE, Charles spent fourteen years serving at home and overseas with the British Foreign & Commonwealth Office. He enjoyed postings in Jordan, Iraq, Saudi Arabia and Iran, as well as the UK Mission tot he United Nations in New York.
Charles left the Diplomatic Service in 1997 to study for an MBA at Columbia Business School. On graduation he joined CSFB in London to work with the UK mergers and acquisition team. In 2002, Charles set up his own political risk consultancy, Global Metrics, Ltd., to advise clients with exposure to emerging markets, particularly in the Middle East. In January 2005 Charles joined Kroll, the world’s largest risk consultancy, as Head of the Middle East Practice. On leaving Kroll, Charles worked as a consultant, advising clients with Middle East interests in a variety of areas ranging from market entry, business risk and by leveraging his networks to enable clients to build their business in the region.
Charles took up his current position as Director General of the MEA in November 2010. He is married with a one-year old daughter.
About David Hatcher
Head of Policy and Resources, MOD Saudi Armed Forces Project
David Hatcher was born in Rintein, Germany, where his father was serving in the British Army on the Rhine. He is currently senior civil servant in the UK Ministry of Defence.
David’s early career was in the Diplomatic Service where he served on the Falkland Islands and Argentina Desk before transferring to the private office in 10 Downing Street. He also spent a year at the Middle East Centre for Studies in Lebanon as well as a year at the University of Lille. He then joined the Defence Intelligence Staff and was posted to the Embassy in Washington DC. He graduated in Politics, French and European Studies, and has served in a range of posts in the MOD. He has been Private Secretary to four different Defense Ministers.
David became Director of Resources (Air) in January 2002. He has also headed a study into suicide bombers and completed the Royal College of Defence Studies 2004 course. he later served as Secretary to the Investment Approvals Board and became Head of International Acquisition Policy in July 2008. He is currently responsible for the UK’s major Projects with Saudi Arabia.
The MEA is an independent non-profit making organisation established in 1961. The members of the Association cover all sectors of industry and commerce including; Banking, Finance, Law, Consultancy, Manufacturing, Retail, Education and Training. Small and Medium Enterprises are particularly encouraged to join the Association.
About the British Offsets Office
The Saudi British Economic Offset Programme is designed to provide economic benefit for Saudi Arabia from defence expenditure overseas. The Programme was drawn up in response to the Al Yamamah Project, in which Saudi Arabia purchased Tornado, Hawk and PC-9 aircraft, naval vessels and related equipment and support from the UK. The Saudi British Economic Offset Programme, which is administered by British Offset, aims to offset some of this expenditure by promoting commercial projects in Saudi Arabia which will introduce new technology and investment through joint ventures or licensing agreements.