page 3 page 7 page 15 revitalized saudi banks ourworld · revitalized saudi banks are moving with...

OurWorldThis supplement to USA TODAY was produced by United World LTD.: 4410 Massachusetts Ave NW, Washington - DC 20016 - Tel: 1-202.347.9022 - Fax: 1-202.347.9025 - www.unitedworld-usa.com

WEDNESDAY, MARCH 29, 2006

Revitalized Saudi banksare moving with thetimes and introducinginternet and phonebanking

Finance Page 3

The kingdominvests heavily toexpand itstransportinfrastructures

Transport 5

Greater diversity ishelping SaudiArabia reduce itsdependency on oil

DiversifiedGroups Page 7

● COUNTRY NAME:Kingdom of Saudi Arabia● GOVERNMENTTYPE: Monarchy● HEAD OF STATE:King Abdullah Bin AbdulAziz Al Saud● CAPITAL: Riyadh● AREA:864,869 sq miles (slightly more than one-fifth the size of the U.S.)● POPULATION:25.6 million (UN 2005 est.)● MAJOR LANGUAGE:Arabic● MAJOR RELIGION:Islam● MONETARY UNIT:1 Riyal = 100 halalah● GDP:$281.2 billion (2005 est.) ● GDP - real growth rate:6.4% (2005 est.) ● GDP - per capita:$12,900 (2005 est.) ● MAJOR INDUSTRIES:Crude oil production,petroleum refining,petrochemicals, ammonia,industrial gases, sodiumhydroxide (caustic soda),cement, construction

Source: EIA, BBC, CIA

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UNITED WORLDTEAM IN

SAUDI ARABIA Project & Editorial

Director: Alvaro SilvaSantisteban FerraroProject Coordinator:Mercedes Pagalday

KING Fahd of Saudi Arabia diedin August 2005, bringing to anend his 23 years of sovereignty.His contributions to the country’ssocial, political and economicdevelopment throughout his lifeinclude the modern-ization of the edu-cation system, thecreation of a Con-sultative Council,the restructuring ofthe kingdom’s re-gional government,and the acceleratedgrowth of industry and infra-structure. He has helped to makeSaudi Arabia what it is today: “aprosperous society which is well-balanced economically, cultur-ally and intellectually”, andremains true to the precepts andtraditions of Islam.

His successor, King Abdul-lah, has played a significant rolein state affairs in his role asCrown Prince. The currentmonarch has upheld and devel-oped closer ties with the West,

maintaining a per-sonal friendship with U.S. PresidentGeorge W. Bush andmaking very clear hiscommitment to theglobal war on terror-ism. At the April 2005summit held in Craw-

ford, Texas, Bush and Abdullahestablished a joint committee offoreign ministers to deal withimportant strategic issues.

Considered the most modernand open of his 42 brothers, Ab-dullah is seen as someone whounderstands the need for re-

forms in Saudi Arabia. Last yearwas a benchmark in openingthe kingdom up both to its ownpeople and to the internationalmarket. A highlight among po-litical reforms has been the in-troduction of municipalelections, while the country’sinterest in attracting foreign in-vestors and partners was madeevident by a Saudi trade mission

to the U.S. The Saudi govern-ment, intent on rectifying someof the negative press the coun-try received in the U.S. in thewake of the 9/11 terrorist at-tacks, is making efforts to pro-mote student exchanges andfacilitate visas for businessmen.On the economic front, the king-dom’s accession to the WorldTrade Organization (WTO) is

opening the doors to a new eraof international trade activity.

“The new King is seen as a re-former by the Western media,”says Prince Alwaleed bin Talal,chairman of Kingdom Holdingand one of the richest men in theworld. “His reign began with aneconomic boom thanks to oilprices. Further economic andpolitical reforms are inevitable.”

Diversification and liberalization are high on the agenda as King

Abdullah’s reign begins with reforms

■ ACCORDING to the Saudi Arabianfinancial group Samba, the kingdom’seconomy could scarcely be doing anybetter. Oil revenues, the mainstay of thecountry’s budget, are strong and are like-ly to remain so. Meanwhile, increaseddiversification is giving rise to contin-ued private sector growth, more businessinvestment, and high consumer confi-dence and spending.

The figures for 2005 back up this pos-itive image. Actual government spendingfor the year of $90.9 billion comparedwith revenues of $148 billion gave thecountry its largest surplus ever. Samba es-timates that the government reduced its debtby $37 billion, equivalent to more than 29percent. Real GDP growth reached 6.5percent while inflation, at 0.4 percent, wasinsignificant. The country ended the year

with a current account surplus of $87.1 bil-lion, and economic growth is forecast toremain strong during 2006 and 2007.

Another highlight of the past year wasSaudi Arabia’s accession to the WorldTrade Organization (WTO) on Decem-ber 11th as the institution’s 149th mem-ber. As the world’s 13th largestmerchandise exporter and 23rd largestimporter, the kingdom has a major role

to play in global commerce. Economicreforms instigated as a result of acces-sion negotiations have led to an increas-ingly liberalized trade regime and atransparent and stable environment fortrade and foreign investment meaningthat, among other advantages, WTO mem-bership should help reduce dependenceon the oil industry and increase the in-flow of foreign direct investment.

Building a broader economic base International investors are attracted by increasingly liberalized trade regime and WTO membership

Ushering in a new era: U.S.-Saudi relations are warmer than ever thanks to the close friendshipbetween Saudi Arabia’s King Abdullah and U.S. President George W. Bush.

The recentSaudi trademission to the U.S. is

evidence of theneed to attract

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A more extensive version of this report is available atwww.unitedworld-usa.com

Building onthe legacy of King Fahd

S. ARABIA USAT 1-10-ok.qxd 8/3/06 23:17 Página 1

Our World

■ ONE of the world’s sharpest in-vestment minds, Prince AlwaleedBin Talal Bin Abdulaziz Al-Saudis a self-made billionaire and a mem-ber of the Saudi Royal Family. Bornin Riyadh in 1955, Prince Alwaleedis the grandson of the founder ofSaudi Arabia, King Abdul Aziz Al-Saud and of the first Prime Minis-ter of modern day Lebanon as wellas the leader of Lebanese indepen-dence, Riad El-Solh.

Despite his distinguished lin-eage, Prince Alwaleed amassedhis vast fortune on his own withan initial $30,000 that his fatherloaned him in1979. His initiallyfledgling construction businesswas, within two years, generatingannual returns of $1.5 billionthrough Kingdom Establishment,and later became part of Prince Al-waleed’s Kingdom Holding. With-in ten years, he was the fifth richestman on the planet.

His multicultural backgroundand his U.S. education have con-verted him into a bridge betweenthe Western and Arab worlds.Kingdom Holding is valued today

at more than $23 billion and ownsshares in international companiessuch as Amazon.com, eBay, AOLTime Warner, Ford Motor Com-pany, Hewlett-Packard, Motoro-la, Apple, and Citicorp. Here PrinceAlwaleed speaks about modernday Saudi Arabia and the resur-gence of the Middle Eastern econ-omy.

You said that Saudi Arabiahas a different reality than whatis perceived internationally.Could you elaborate and tell ushow you would characterizemodern Saudi Arabia?

Every country has its own par-

ticularities. Religiously speaking,Saudi Arabia is unique. Every day,one billion people pray five times.Economically speaking, the mostimportant commodity in the worldis oil, and economies crash or pros-per depending on oil prices. Weare unique because of this valu-able asset. Geographically, we areunique because we are located inthe middle of the world. Politi-cally, Saudi Arabia is unique, asit has never been colonized.

The new Saudi King has beenreferred to as a reformer in theWestern media, and the beginningof his reign has coin-cided with an eco-nomic boom in thecountry, thanks to oilprices which are hov-ering around $60. Ahuge profit was evi-denced in the budgetfor this year, and Sau-di Arabia is now moving towardsa major transformation, as botheconomic and political reformsare being carried out.

Many people, including mem-bers of the Royal family, saythat Saudi Arabia should changeat its own pace. What is youropinion on the momentum ofthese new reforms?

Wednesday, March 29, 2006 2Distributed by USA TODAY


Compagnie Generale de Geophysique de France

A strong and mutually beneficial relationship

■ THE U.S.-Saudi relationshipgoes all the way back to the early1930s, when U.S. technical ex-pertise helped exploit the king-dom’s recently discovered asset:oil. Diplomatic relations were es-tablished at this time and the firstU.S. embassy in Saudi Arabiaopened in 1944. Overthe years, this strong po-litical relationship wasfurther strengthened bygrowing economic ties,and today the U.S. isSaudi Arabia’s largesttrading partner, while the king-dom represents the largest MiddleEastern market for U.S. exports.As for oil, Saudi Arabia currentlyprovides 20 percent of total U.S.crude imports.

Like any relationship, this onehas suffered from ups and downs.One of the lowest points came af-

ter the 9/11 attacks, which pro-voked negative feelings in U.S.opinion towards the kingdom. Infact, Saudi Arabia is one of thestaunchest supporters of the U.S.in the global war against terror,and in 2005 sponsored the firstever Counter-Terrorism Interna-

tional Conference inRiyadh. “Relations be-tween Saudi Arabia andthe U.S. are excellent andserve the interests of bothcountries. Also, Saudi ef-forts to eradicate terror-

ism are known to everyone,” saysPresident of the Prima Law con-sulting firm, Prince Dr. Abdul-rahman Bin Saud Al Kabier. Hisis one of the many successfulbusinesses in Saudi Arabia thatwelcomes U.S. interests in thecountry and places a high valueon U.S. technology.

Indeed, Saudi Arabia is court-ing new U.S. investment as itopens its economy to the world,and pushes ahead with privatiza-tion plans and new infrastructureprojects. The government has cal-culated that the full developmentof the economy will require $623billion in investment between nowand 2020, and although the coun-try boasts a booming economyand a large account surplus, for-eign investment will play a keyrole in this development. The Sau-di government would like that in-vestment to be American, andloyalty to the long-standing U.S.relationship was one of the rea-sons behind the first Saudi trademission to the U.S. last year.

The road show took place inMay just weeks after King Ab-dullah’s visit with President Bushin which the two leaders estab-lished a committee to oversee is-sues of common interest. The roadshow featured visits to five U.S.

cities to highlight trade and in-vestment opportunities in the king-dom. Organized by theCommission of InternationalTrade (CIT), the high-level dele-gation consisted of more than 60key decision makers from the Sau-di private sector, and was headed

by Princess Loulwah al-Faisal,who later commented that all in-dications suggested a ‘rosy fu-ture’for the kingdom in terms ofinvestment.

Largely an initiative of CITchairman Khaled Al-Saif and Sec-retary General Omar Bahlaiwa,who pointed out the rapid growthof the private sector and the risein its contribution to Saudi’s grossdomestic product, the trade mis-sion was also supported by theRiyadh Chamber of Commerceand its chairman Sheikh Abdul-rahman Al-Jeraisy and SecretaryGeneral Hussein Al-Athel. Uponhis return from the mission, Mr.Al-Athel commented that, “TheU.S. is as accepting as ever andopen to discussion. I hope we donot limit ourselves only to busi-ness relations, but that we also en-courage more generalcommunication.”

The trade delegation formedpart of the kingdom’s drive, led

by CIT, to increase the commer-cial trade between the two nationsas well as the plans of the SaudiArabian General Investment Au-thority (Sagia) to transform thecountry into one of the top tenforeign investment locations inthe world by 2010. Along withSaudi Arabia’s recent accession tothe World Trade Organization, anumber of reforms have been car-ried out internally to create a pro-business climate, and in its 2005report, the World Bank’s Interna-tional Finance Corporation votedSaudi Arabia as the most com-petitive nation in the Arab World.“We have developed a mecha-nism to manage our investmentenvironment and improve ourcompetitiveness ratings,” saysSagia Governor Amr Dabbagh,who adds that U.S. companiesrepresented the majority in the800 percent jump in investmentapplications the agency receivedin the first half of 2005.

Two of the most prosperous countries inthe world strengthen already close ties

INSIGHT An interview with Prince Alwaleed: a Saudi, a businessman, and a royal

TRADE, anti-terrorism and investments bind two nations

A look at modern day Saudi Arabiaand the Middle Eastern economy One of the nation’simportant figuressheds light on SaudiArabia’s future

U.S.-ARAB RELATIONS Reinforcing bondsthrough collective education

■ THE Government of Saudi Ara-bia, through its economic and po-litical reforms and its accession tothe World Trade Organization, hasmade clear its desire to develop acloser relationship with the West-ern world. Relations with the U.S.that were damaged as a result ofthe terrorist attacks in New Yorkare a concern for many. Warmingthese relations and restoring thehistoric friendship between thetwo nations is a focus for leadersfrom both countries.

“No one denies the participa-tion of 15 Saudis in 9/11, nor thatSaudi Arabia and U.S. relationshave been affected by this,” com-ments Prince Alwaleed, the grand-son on King Abdullah, and one ofthe main protagonists for bridg-ing the U.S.-Arab gap. “Americansneed time to heal. But we want tomake clear that we are not all ter-rorists, and help them understandSaudi Arabia in a real way.”

Organizations like U.S.-basedFriends of Saudi Arabia (FSA) areworking to repair some of the dam-age wrought on the U.S.-Saudi re-

lationship. FSA was formed inJanuary of 2005 as a non-profit,non-governmental educational andcultural organization dedicated tostrengthening the friendship thathas existed between Saudi Arabiaand Western countries.

“With 9/11, Americans tendto put people from a whole re-gion into one basket. That is theproblem because Americanshave forgotten who has been avalued and trusted friend for along time,” says FSA boardmember H. Delano Roosevelt,whose grandfather, former pres-ident Franklin Roosevelt,worked to strengthen diplomat-ic relations with Saudi Arabiaover 60 years ago in his historicmeeting with King Abdulaziz.“FSAis saying that our two dis-tinct cultures can get along well,as they always have.”

Prince Sultan Bin Salman of theSupreme Commission for Tourismsays that increasing communica-tion between the two cultures isimportant. They have initiated anexchange program with the Met-ropolitan museum to share pieceswith the Saudi National Museum.The Prince says, “It is our job tobridge the gap, and find ways forpeople to understand our histori-cal civilizations.”

Saudi Arabia makesan effort to protectits long, amicablehistory with the U.S.

PRINCE ALWALEEDChairman

Kingdon Holding

Saudi Arabia emphasizes learning, tolerance and culturalexchanges between the Arab country and the United States.

One has to keep pace with therest of the world. With the tech-nological revolution, there havebeen changes in economieseverywhere. With the collapseof communism and the preva-lence of capitalism, it is now aunidirectional world, and youcannot impose your speed onit. It is the world’s pace, and no-body wants to be left behind.

You can move slowly, butonly in certain areas. In reformsand on an economic level youhave to move fast. For exam-ple, in the liberalization of the

economy, expedit-ing the process ofreforms at the de-mocratic level can-not wait because allthe economiesaround us likeEgypt, the Gulf re-gion, and Africa

have applied it quickly. In-vestment will go there and willnever come to us. In general, Iwant to go faster and keep pacewith the world.

With recent slowdownsin the European and Japan-ese economies, how do yousee the global economyevolving over the mediumterm?

Since 9/11, America, withits high average growth, hasreally been the vanguard andthe leader of world economies.Economic development ishappening more in the south-ern hemispheres now, in LatinAmerica, Africa, the MiddleEast and the Far East. SaudiArabia doubled its growth in2005. The Gulf region and allthe Middle Eastern economieshave experienced a boom, notonly because of oil but also be-cause of reforms. Some coun-tries in the Middle East do nothave oil and yet they have ex-perienced this boom, so thereis a major renaissance in theMiddle Eastern economies.

Sharing culture tostrengthen ties

‘We are movingtowards a majortransformation,as both politicaland economicreforms are

being carried out’

OMAR BAHLAIWASecretary General

of the Commission ofInternational Trade


Our World

■ THE result of careful andmeticulous planning since 1999,Prima Law and Consultations Of-fice went into action in January2003. Providing consultative, le-gal, economic, administrative, fi-nancial and translation services,the firm got off to a strong start,making the short list for the mas-sive railways privatization project.

“First we studied the marketneeds, and saw what new ser-vices we could provide. We re-cruited highly-qualified staff. Wecreated our own personality andour own style. Our approach wasstep-by-step: careful, thoughtfuland intelligent. We did not startuntil we were 100 percent satis-fied with our company and strat-egy. We really wanted a strongentrance into the market , takingup where others reached theirlimits,” says Dr. AbdulrahmanBin Saud Al-Kabier, presidentand secretary-general of the or-ganization.

The company’s primary ob-jective was to provide the bestpossible services. “I set very highquality standards and my aim wasto create a good name that couldalways be trusted,” explains thePrince. One of the most effectiveideas was to have independent

offices dealing respectively withlaw and Shari’ah, administration,economics and translations work-ing under one roof. As well as pro-viding clients with greater privacyand confidentiality, this is moretime and cost-efficient due to co-ordination between the differentoffices – an added advantage forthe client.

As well as providing the mosthighly-qualified and broadly-ex-perienced personnel, to furtherensure top levels of quality allbranches are supervised by a rel-evant expert. Former DeputyMinister of Finance and Nation-al Economy Dr. Mansour Al Tur-ki, for instance, supervises theeconomic consultations office.

The ability to provide all nec-essary legal services and repre-sentations within Saudi Arabia

makes Prima Law an ideal part-ner for any new company enter-ing the kingdom. The firm alsohas a solid footing in matters offoreign investment through itspartnerships and dealings withvarious well-known internation-al law, consultancy and market-ing names such as Simmons &Simmons and Curtis, Mallet, Pre-vos, Colt & Mosle.

The company has recently beenawarded another plum project,namely the privatization of thewater desalination industry, asSaudi Arabia produces around aquarter of the world’s desalinat-ed water supplies. “We won thisafter strong competition with topnational and international firms,”says Prince Abdulrahman.

Given Prima Law’s success inits ventures with foreign compa-

nies, it is continually looking forprospective new partners in eco-nomic and administrative fields.New branches are planned bothnationally, in Jeddah, and re-gionally, in Cairo and Dubai, andthe U.S. could be the next stopwith branches to be opened inNew York and Washington D.C.

■ SAUDI Arabia’s banking sec-tor has the potential to be high-ly lucrative for foreign banks.As well as possessing the re-gion’s biggest stock market witha current capitalization of over$300 billion, the country’s eco-nomic boom and privatizationdrive are fertile ground for ini-tial public offeringsand the develop-ment of a domesticbond market. Tennew licenses forbanks were issuedlast year, and thenew Capital Mar-ket Authority has been estab-lished to create moretransparency in financial trans-actions.

“The government’s main aimshave been to diversify the econ-omy and to encourage social de-velopment. As a result, we nowhave modern infrastructure anda fully modern banking sector,”says Hamad Saud Al-Sayari,Governor of the Saudi ArabianMonetary Agency (SAMA), the

country’s central bank. SAMAacts as banking supervisor, en-suring all banks are operatingsoundly and helping them to planfuture strategies. The agency hasplayed a crucial role in the con-solidation and development of theSaudi Arabian financial system,and in introducing financial mar-

ket reforms over thepast two decades.

The Saudi bankingsector has achievedrobust growththroughout the pastfew years. In 2004,combined profits of

the nation’s ten existing com-mercial banks topped $3.9 bil-lion, while the sector saw itsreserves and capital rise by 22.4percent in the first quarter of2005. The Saudi Arabian StockExchange grew by a record 28percent during the same period.Although foreign banks havelong had a minority interest in thekingdom’s banks, HSBC,Paribas, Deutsche Bank and JP-Morgan Chase have all been li-

Distributed by USA TODAY3 Wednesday, March 29, 2006


P.O. Box 69056 Riyadh 11547 Saudi ArabiaTel: +966 1 219 8010, Fax: +966 1 219 8050, [email protected]

In today’s market, there is an increasing demand for Islamic law as well as general legal,economic and administrative consulting services.

Prima Law & Consultations Office is the answer. Specialized in Shari’ah consultations,the firm is staffed with an elite team of competent and brilliant legal counselors and lawyers.

In cooperation with international consultancy firms, Prima Law employs optimal methods for identifying and specifying new commercial opportunities, in addition to providing a variety

of professional, integrated services under one roof.

Your legal and consultation problems solvedYour legal and consultation problems solved

The monetary agency has been imple-menting new reforms for the last 20 years

FINANCE The smallest bank in the kingdom breaks new ground

Aljazira Bank:setting the pace

■ ONEof the most important de-velopments in the Saudi bank-ing sector has been the rise ofIslamic, or Shari’ah-compliant,banking services for private andbusiness customers. In recentyears, banks such as Bank Al-jazira have become entirely Is-lamic, while others offer someIslamic services, particularly inretail banking. Currently 75 per-cent of the national retail lend-ing market is Shari’ah compliant.

“Aljazira made the decisionto become completely Islamicwhile remaining innovative,”says Mishari Ibrahim Al-Mishari,the bank’s CEO. Indeed, Aljazi-ra has set the pace in introduc-ing new Islamic products intothe Saudi market. It was the firstto introduce the Tamam program,a Shari’ah compliant alternativeto conventional share tradingmargin accounts, the Naqa’a pro-gram, an Islamic version of fixed-time deposits, and the TakafulTa’awuni, a Shari’ah-compliantalternative to conventional life in-surance.

“It is quite interesting that Shar-i’ah compliance is the key ele-ment to our success,” observesMr. Al-Mishari. “Usually youfind smaller banks copying thelarger banks, but our case hasbeen the opposite. We are con-sidered pioneers in what we do.”

Customers certainly agree. Al-jazira's net profits for the firstthree quarters of 2005 totaled$129 million, up a record 307 per-cent from the previous year’sfigures, which in turn had beenup 101 percent since 2003. In2005 there was a nine-month in-crease and a rise in customer de-posits by 23 percent. Shareholder

equity soared, rising 127 percentto just under $640 million.

Aclient-driven and service ori-ented institution that caters main-ly to affluent individuals as wellas corporations, Bank Aljaziraoffers a full range of productsand services while remainingShari’ah compliant. The bankoffers a portfolio of five mutualfunds, the Aljazira Visa Goldcard, the Dinar program for bothpersonal and corporate financing,and the Aljazira Upscale pro-gram that includes platinum andgold services for selected clients.

Bank Aljazira has also led theway in the use of new tech-nologies. One of its services,the sms alert, provides clientsof the bank’s local share withtrading and international bro-kerage services via cell phonemessages. The bank is also thenational leader in Internet bank-ing through its site Aljazira on-line. The bank’s tadawulcom,a new service launched lastyear for local share trading on-line, won the 2005 World WideWeb Gold award. “Internet isanother area where we havebeen successful. We are by farthe best bank in the country interms of Internet services,” saysMr. Al-Mishari.

● Prepared a study for the Sau-di Council of Chambers of Com-merce & Industry regarding theantitrust law. ●Signed an annual consultationsagreement with the General In-vestment Authority by virtue ofwhich the office became the le-gal counselor and the economicconsultant of the authority.● Qualified in cooperation withSimmons & Simmons law firmto bid for the assignments of le-gal consultant for the executionand operation of the Saudi Rail-ways network expansion project,which is to be executed by theprivate sector on build-operate-transfer (BOT) basis. ●Submitted a proposal for the de-velopment of Incentives Programfor the private sector participa-tion in electricity services andwater desalinization sectors ofSaudi Arabia in cooperation withA.T. Kearney management con-sultations firm.

The bank opts forchange- becoming100% Islamic and100% innovative

SAMA’s main task is motivating banks to be more active and bringing new banks into the market.

BANKING Setting up 2006 to be the year for major growth

SAMA consolidatesfinancial system

MISHARI IBRAHIM AL-MISHARI

Chief Executive Officer ofBank Aljazira

PRIMA LAW

Law an asset for fast-expandingSaudi firm looking to branch out

Track record ofPrima Law'smost importantprojects

DR. ABDULRAHMAN BINSAUD AL-KABIER

President and SecretaryGeneral of Prima Law &

Consultations Office

The bankingsector’s reservesand capital rose

by 22.4% in the beginning

of 2005

censed to operate in recent years. This inflow of foreign operators

is likely to increase significantlywith Saudi Arabia’s World TradeOrganization (WTO) membership.However, Mr. Al-Sayari believesthat Saudi banks are well equippedto deal with the increased compe-tition. “I don’t expect any signifi-cant change for our businesses asthey are already exposed to glob-al competition. Liberal policies inthe sector were in place before wejoined the WTO,” he comments.“The sector has developed nicelyand is in a very strong, profitablefinancial position. It is capable ofwithstanding the competition.”


Our World



■ "WE are working on manyprojects," says Dr. UsamahAltaf, Saudi Post's vice presi-dent and CIO. IT is the con-necting factor that is keepingSP one step ahead of otherpostal organizations. Comput-erized sales points, digitalfranking machines, and easy-access 24-hour kiosks in mallshave all recently been intro-duced. The kiosks, points outDr. Altaf, will make it easier forcustomers to do their own trans-actions.

The main innovation of SP isthat delivery of mail will bedone without having the nameof the recipient, their addressor even their city. The new cod-ification system replaces them

all. The key element for thesuccessful implementation ofthis system is the creation of zipcodes. One number gives anaddress location anywhere inthe kingdom within one squarekilometer. The other part of thecode gives the rest of the de-tails, meaning theactual street nameis not necessary. Ina country whereArabic is the writ-ten language, thisis a great advan-tage. Translationinto English givesrise to variations in spelling,which makes automated sort-ing very difficult. Whereas cur-rent sorting machines can only

deal with around 20 percent ofmail, the introduction of zipcodes could increase produc-tivity to around 70 to 80 per-cent, the average rate for otherdeveloped countries. The sys-tem has been highly praisedand SP expects to sell the pack-

age to other Arabiclanguage countriesand also in Europeand the U.S.

Other develop-ments center on thelogistics of actual de-livery. New routingsoftware applica-

tions using GPS and GIS willallow mail to be loaded at thesorting center according to spe-cific routes, enabling the dis-

patchers simply to follow GPSinstructions.

So many new, successful pro-jects in the pipeline have in-spired SP to launch a newfinancial service. Consideringthat approximately $149 bil-lion are transferred abroad eachyear, by the end of 2006, SPwould have the capacity to of-fer, as added value services,money transfers, money ex-change and money deposits.

Part of the work involved inmodernizing the system isheightening customer aware-ness of new services. In 2005,SP ran a nationwide publicitycampaign using all availablemedia, and another major cam-paign is planned for this year.

SAUDI POST (SP) Since 2002 the corporation has been operating as a private sector company

■ SAUDI Arabia’s modernpostal service has come a longway since the days of monthlyjourneys by camel from one vil-lage to another. Among recentdevelopments was the 2002 de-cision of the Saudi Council ofMinisters to make the General Di-rectorate of Post into a publiccorporation, operating as a pri-vate sector company. Now, witharound 1230 post offices, 82agents and 770 postal represen-tatives, Saudi Post (SP) pridesitself on its distribution and col-lection network, which covers6,123 cities, towns and villages,and handles more than 900 mil-lion processed items a year. TheExpress Mail Service (EMS),launched in 1974, offers same-day delivery within the kingdom.

However, there are manymore innovations on the agen-da. Since the beginning of2005, developments at SP have

accelerated. The country isshifting towards the use of ad-vanced technology, digital-ization and mechanization.The government in particularis applying new systems in allof the departments and com-munications networks are noexception. Having already es-tablished new departments, SPhas also launched new ser-vices, and has set inmotion several newstrategic projects,including aground-breakingplan to create apostal address andpersonal mailbox delivery sys-tem. Dr. Mohammed SalehBenten, President of SaudiPost, says,“In most of SaudiArabia we don’t have a prop-er addressing system. Thereare no street names or housenumbers. The new system isquite extraordinary in that wecan deliver mail even withoutthe recipient’s name.”

The aim of the postal addressproject is to supplement the cur-rent system of private mailbox-

es at the post offices and postalagencies, which currently num-ber around 700,000 in total. Af-ter carrying out exhaustive studiesin cooperation with companiesthat are experts in the use of Ge-ographical Information Systems(GIS), SP has outlined plans tocreate a door-to-door deliverysystem using the latest technol-ogy. Subscribers to the new

Wasel service, as itwill be called, will begiven a postal codeand street numberwhich will be enteredinto a database, fa-cilitating delivery

anywhere within Saudi Arabiain the shortest time possible andat a minimum cost.

“The project will be carriedout in phases, starting in Riyadhand systematically covering allthe regions and cities of thecountry,” says Dr. Benten, whohas approved plans for the dis-tribution of five million homemailboxes to get the project start-ed. The successful implemen-tation of the project will provea major milestone in the devel-

opment of the country’s postalservices.

Other strategic projects un-dertaken by SP based on up-grading technology and applyingmaximum efficiency include:an electronic mail sorting sys-tem to speed up mail deliverytimes, an electronic mail track-ing service which will also cov-er parcel post, a mail networklinking project, the installationof self-service machines simi-lar to automated banking ma-chines which will allow clientsto access postal services aroundthe clock, and the creation of acentralized information system.

While placing a great valueon human resources, SP trainsstaff at special centers in Riyadh,Jeddah and Dammam, and or-ganizes regular seminars andworkshops. It is undoubtedlymoving with the times, partic-ularly the growing tendencyamong public and private en-terprises to employ women. InJuly 2005, Dr. Benten an-nounced that women will soonbe able to work for the Saudipostal service, starting with thecreation of a specific trainingprogram for them.

A women’s postal sectionhas already been opened atKing Abdul Aziz Universityin Jeddah, serving the univer-sity’s female staff and stu-dents. As the home deliveryservice is extended fromRiyadh to the rest of the king-dom, job opportunities forwomen in the computer sec-tion will also increase.

■ MODERNIZATION, in-novation, and the applicationof new technologies- theseare the guiding principles ofbusinesses and services in 21stcentury Saudi Arabia. SaudiPost, which has been provid-ing a vital service to the coun-try’s citizens since the early20th century, is no exception.The company is currently en-gaged in upgrading its sys-tem and introducing newproducts and services to ben-efit clients. InSeptember of lastyear, the compa-ny, representedby the chairmanof the board of di-rectors Mo-hammed JamilMulla, who is also the Min-ister of Telecommunicationsand Information Technology,signed a contract withSiemens International Com-pany, a world leader in elec-trical engineering andelectronics, for the compre-hensive revamping of Saudipostal operations.

The contract is worth $13.3million and will focus on op-timizing Saudi Post’s com-petitive capabilities. Part of

the deal includes setting upautomatic processing systemsfor the more than 800 millionmail items that enter and leavethe kingdom each year. Thecontract will eliminate man-ual sorting of mail and provideelectronic reading of address-es, which is expected to great-ly enhance mail deliveryservices. In addition, the con-tract covers the organizationof training programs for Sau-di Post personnel who will be

operating the sys-tems, ensuringthat everythingruns smoothlyfrom the start. Thecontract will alsoprovide logisticsupport for the

new Wasel project, which aimsto deliver mail to customers’personalized addresses – anambitious step forward in thehistory of Saudi postal ser-vices.

Saudi Post has also recent-ly set up a company namedNaqel (carrier), a joint pro-ject with the private sectorwhich aims to further upgradethe company’s competitivecapabilities and develop itsservices.

Corporationfinalizes ambitiousnew postal address project

The Waselproject aims todeliver mail to

customers’personalizedaddresses

Saudi Posthandles over900 million

processed itemsa year NEW TECHNOLOGIES

Siemens contract paysdividends as system isrevamped

INNOVATION

Muhammed Saleh Benten, President of Saudi Post, has ambitious plans for the mail network.

SP has outlined a ground-breaking door-to-door delivery system using the latest GIS technology.

CHART OF THE REGION’S GENERAL TOTAL OF THE POSTAL SERVICE VOLUME

New postal servicesdeliver on promises

Mail deliverywill be donewithout the

name, addressor even

the city of therecipient

Vice President and SP CIO Dr. Usamah Altaf plays animportant role in developing the revolutionary postal system.

Saudi Post is one step ahead of competition with their IT advantage

■ THE demand for RFID, orRadio Frequency IdentificationSystems, is on the rise, espe-cially in the postal sector. Interms of their potential in theglobal market, Saudi Arabiais in the top of the ranks, alongwith the United States, Europeand Japan.

RFID is becoming a real andviable option now that adequateISO global specifications areavailable for high volume RFIDtagging. Furthermore, using asingle standard makes the sys-tem compatible international-ly. This standard would also

make multiple sourcing and in-ter-operability of hardware apossibility.

The most widely usedRFID frequency is called HF,which means that the RFIDtags have a range of up to 10meters and are not affected bythe presence of fluids andmetals. Machinery whichsorts mail and other postalequipment are also availablein RFID-enabled form. Even-tually the tags will be em-bedded in postage stamps,mailboxes and postal con-tainers.

COMMUNICATIONS

Saudi, a hi-tech leaderRegion 2004 2003

Riyadh 311,784 265,763Makkah 204,281 267,162Madinah 16,947 14,886Eastern 311,649 216,600Qassim 26,107 16,731Assir 18,108 29,115Hail 3,381 2,376

Tabuk 7,379 4,073Najran 18,070 4,997Jizan 8,470 5,514

Northern Borders 2,688 3,551Al-Baha 5,344 4,496Al-Jouf 3,455 4,805Total 934,975 840,069


Our World Wednesday, March 29, 2006 6Distributed by USA TODAY


■ THESaudi Arabian economyis experiencing the biggest everboom in its history. Last year,the kingdom joined the WTO, amove which will have an impactnot only on Saudi Arabia but onits relations with trade partnersworldwide. “I think this will bean improved golden era for Sau-di Arabia. During this boom wewill reap the benefits from all theinfrastructure investment and in-dustrialization that has devel-oped over the past decades,” saysDr. Talal Ali Al-Shair, chairmanand CEO of Cristal & Shairco.

In Dr. Al-Shair’s view, WTOaccession will make it easier forcompanies to enter new markets.“This is their chance to improvetheir products, services and totalquality management,” he adds.Being members will also help toseparate the businesses that aregoing to make it from those thatare not – and both the NationalTitanium Dioxide Company(Cristal) and Shairco are defi-nitely candidates for the firstgroup.

Shairco’s products are used ina multitude of applications in-cluding light poles, furniture, andarchitectural projects such as theceiling of the Islamic Develop-ment Bank headquarters build-ing in Jeddah. The originalAl-Shair family company, Shair-co started with a number of smallindustrial projects, eventually de-veloping Cristal as a joint ven-ture with U.S. companyKerr-McGee, as well as bringingother partners, namely GIC andNIC (Tasnee) into the project.

Ten years later, Kerr-McGee left,leaving three equal partners.Shairco exchanged its third in-terest in Cristal for 23 percent ofTasnee and, as a result, all threecompanies grew stronger. Shair-co started to expand and devel-op other, larger projects.

These include a new airportfor the Madinah region, the Mad-inah-Yanbu and Jeddah-Riyadhrailways, a free zone in Yanbu,

and the Nabaa project, whichwill be a complex of industrialclusters, also based in Yanbu,working from local petrochem-ical and mineral feedstock re-sources. With different investorsin different factories, the clus-ters will be interdependent andwill include a petrochemical re-finery, methanol, fertilizer andzinc plants, an aluminum smelter,etc. “We are promoting Nabaa toboth local and foreign investors,”says Dr. Al-Shair, who expectsmost Nabaa joint ventures to bewith U.S. companies.

Cristal has been manufactur-ing titanium dioxide at its Yan-bu plant since 1991, havingspotted the growing market de-mand and the need for environ-mentally-sound production. In2002, production capacity in-creased from 70,000 metrictonnes a year to 100,000 metrictonnes. Now one of the world’smost important suppliers of ex-portable titanium dioxide, Cristalstands out from its peers as theonly 100 percent environmental

In Yanbu, the industrial city on the Red Sea, Cristal is the number one producer of high-quality titanium dioxide.

Cristal TiO2 is an eco-friendly pigment that makes the world a more colorful and

beautiful place. But it’s not just the pigment that’s environmentally compatible, it’s Cristal’s entire operation, making them the most responsible and

environmentally conscientious plant in the world.

IF THE RED SEA CORALS COULD TALK . . .

JUST ASK THE RED SEA CORALS . . .

P.O. Box 13586 Jeddah, 21414 Saudi ArabiaTel: +966(2) 651 9883 / 653 0104 Fax: 651 8757 / 653 3382 www.cristalarabia.com

[email protected]

A well-earned reputationfor industrial qualityLeading industrialcompany looks tomove into newmarkets

INDUSTRY Environmental concerns at top of firm’s agenda

As one of the world’s most important suppliers ofexportable titanium dioxide, Cristal’s prospects are bright.

Continued on page 7

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DR. TALAL ALI AL-SHAIR

Chairman and CEO ofCristal & Shairco

ADVANCED BANKINGTHE LEADER IN IPOs

■ SAMBAFinancial Group an-nounced another outstandingyear as it posted the highest netprofits in its history for 2005, inits second full year after its tran-sition from Citibank manage-ment. Net profits for the yearreached SR4.018 billion ($1.071billion), an increase of 60 per-cent over 2004 net profits ofSR2.506 billion ($668 million).It is not surprising that its mar-ket capitalization has nearlyquadrupled since transition lowsover two years ago. The group’sconsistent performance has beeninternationally recognized andSamba was the recipient of anumber of distinguished awardsfrom Euromoney and Global Fi-nance among others, as well asthe Bank of the Year 2005 fromThe Banker.

Formerly known as SaudiAmerican Bank, a joint stockcompany that was partly ownedby Citigroup, Samba changedto local management with theexpiration of the technical man-agement agreement betweenSaudi American Bank and

Citibank on October 31, 2003.Citigroup subsequently sold itsremaining 20 percent stake ofSamba in May 2004. The bank’sperformance in 2002 and 2003was on the decline, and the sub-sequent move to local manage-ment raised questions of thebank’s future. But the judiciousappointment of long-time em-ployee and former deputy man-aging director Eisa Al-Eisa as

managing director and CEO hasproved decisive in Samba’s stun-ning turnaround. His leadershiphelped the bank maintain andattract a group of talented pro-fessionals. His strategic vision,initiatives and execution infusedenergy and business momentumand has thus far resulted in morethan doubling net income in2005 compared to 2003. Thebank has increased its customerbase from 450,000 in 2003 toover 850,000 in 2005, indicat-ing the strength of the franchise.

Compared to 2004, the 2005results are outstanding, bothfrom a qualitative and quantita-tive perspective. Net incomestands at $1.071 billion, whichindicates over 60 percent growth,and its robust and prudent bal-ance sheet has also grown, astotal assets rose to $28.88 bil-lion. Meanwhile, total loans andadvances grew by 29 percent to$16.64 billion with lower non-performing loans, and demanddeposits shot up by 27 percentto $22.72 billions to bolster bal-ance sheet liquidity.

Performance ratios were ex-cellent, with a return on equity(ROE) of 34.9 percent (2004:25.7 percent) and a return on as-sets of 4.0 percent (2004: 2.9percent). Earnings per share(EPS) grew by 60 percent andrevenue to expense ratio im-proved to 3.9 compared to 3.1the previous year. Samba is dis-tributing SR1.74 billion ($0.464billion) in dividends for 2005.This, is in addition to a stockdividend distributed in April,has raised Samba’s capital toSR6 billion ($1.6 billion). It isevident that Mr. Al-Eisa is on theright track. The bank’s consis-tent good performance is a di-rect result of a clear businessstrategy and its flawless execu-tion, supported by a buoyantSaudi economy.

Mr. Al-Eisa commented,“Since transitioning to localmanagement, Samba hasachieved record-breakinggrowth for the second year in arow. Samba’s strong perfor-mance is due to several factors,such as a focused business strat-egy, its strong brand, effectivedistribution channels for cus-tomer service and acquisition,innovative product solutions,and quality technology and ser-vices, which has given us a lead-ership position across customerand product segments”.

Samba crowns 2005 with recordnet income of $1.07 billion

EISA AL-EISACEO and Managing Director

Samba Financial Group

Samba Financial Group experienced a record-breaking growthfor the second year in a row.

SA

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Best Equity Bank A leader in electronic banking■ THERE are significant examples of Sam-ba’s progress not only in traditional areas butin new areas as well, which are just openingup and expanding. In the past two years, Sam-ba has positioned itselfas the undisputed leaderin the now in demand fi-nancial advisory and eq-uity placement business.It lead the three largestIPOs in the country. TheEtihad Etisalat (Telecom) IPO, valued at SR1billion in 2004, the IPO was 51 times over sub-scribed. The Bank Al-Bilad IPO, valued atSR1.5 billion in early 2005 saw over half thetotal Saudi population subscribe. The more

recent Yansab (Petrochemicals) IPO worthSR2 billion in late 2005 was a huge successand was voted Deal Of The Year 2005 in Sau-di Arabia by the prestigious magazine The

Banker. Samba was alsoawarded Best Equity Bank,Middle East & Africa 2005by the publication GlobalFinance.

Besides the record num-ber of subscribers, the

Yansab IPO also set a new record for sub-scriptions sent via electronic channels. Ac-cording to statistics provided by Samba, 54percent of the total applications received werethrough Internet, ATMs and phone banking.

■ SAMBA has led the way in technological in-novations for the banking industry in Saudi Ara-bia. It has been the recipient of many awardsincluding Best Internet Bank for four years in arow and Best On-Line Cash Management in theWorld 2005 from the well-known magazine, Glob-al Finance . Samba has the highest penetrationamong Saudi banks of retail banking Internet us-age through its SambaOnline site. It also has thebest online banking for the corporate client, in-cluding the best cash management and transac-tion services online through its SambaAccess site.Samba has also recently launched its Samba-Connect site, pioneering payment gateway servicesin the kingdom and paving the way for e-com-merce. For its IPOs, Samba has pioneered pro-

prietary systems which enable online subscription,a development that was extremely welcome in themarketplace.

Alternative delivery channels, SambaOnline,SambaATMs and SambaPhone, account for near-ly 94 percent of total retail banking activity. Thebank has continued to introduce innovations for itscustomers such as TwoWay SMS Mobile Banking,a messaging feature that enables clients to performfinancial transactions and inquiries using their cellphones, and the payment of utility bills using cred-it cards through SambaOnline. Samba is also thefirst accredited acquirer of visa e-commerce in thekingdom. As such, the bank allows maximum flex-ibility and convenience to its customers while at thesame time maintaining excellent functionality.

Samba’s extremely successfulIPOs led to their subsequent

accolade Deal of the Year 2005by the prestigious magazine

The Banker

SAMBA FINANCIAL GROUP


Our World Distributed by USA TODAY7 Wednesday, March 29, 2006


producer of this mineral in theworld.

“Environmental awareness in-cludes a specialized manage-ment system, specified to exceedboth national and internationalregulations. Qualified engineersmonitor the treatment and recy-cling of all solid, liquid andgaseous waste, keeping any ad-verse environmental effects toan absolute minimum. As a re-sult, there has been a continuousreduction in air emissions andstrict adherence to the policy ofzero discharge into the Red Sea,”says Dr. Al-Shair.

Like many of his family mem-bers and colleagues, Cristal’sCEO has a Western education,with degrees in chemical engi-neering and business from U.S.universities. This is partly whythe company’s business ethics,professionalism, transparencyand customer orientation tend tofollow U.S. lines.

“Marketwise we are con-sumer-oriented. We try to de-velop strong customer relations,even when selling through anagent we still have a direct tech-nical link with the customer. Wetailor-finish our products foreach client,” he explains.

The firm continues to inte-grate horizontally and vertical-ly, and is looking at other typesof joint ventures. At present it

is studying a possible joint ven-ture with a U.S. company to maketitanium metal, a strategic prod-uct used in the aircraft industry.

“We have a number of advan-tages that make us competitive inthe world market: being the Red

Sea, having operations on the RedSea and in an industrial city likeYanbu, low energy costs, soundinfrastructures and facilities, andexcellent staff who combine busi-ness acumen with a high levels ofethics,” states the chairman.

Continued from page 6

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■ DR. TALAL Ali Al-Shair isCEO and founder of Shairco, oneof the largest fiberglass manu-facturers in the Middle East, anda key player in forging joint ven-tures while developing mega-pro-jects. He is also CEO of theShairco company Cristal, thelargest privately-owned chemi-cal company in Saudi Arabia andone of the world’s most impor-tant suppliers of titanium dioxide.Here he speaks on future growthin the country’s industrial sectorafter the boom.

How do you feel Saudi Ara-bia will benefit from the eco-nomic boom it is experiencing?

We have had economic boomsbefore, but people seem to bemore prepared for this one. Thisboom will have an impact not on-ly on Saudi Arabia, but also on itsneighbors and on relations with

trade partners worldwide. SaudiArabia’s industry sector is set tobenefit significantly. Many inte-grated industrial complexes are be-ing developed, concepts and ideasare being implemented, and thereis a focus on industrialization.

How did you begin in thechemical industry?

After the petrochemical sectoryou have to look at the next po-tential sectors and these were min-erals and mining. Titaniumdioxide came up because at thattime prices were skyrocketing,and we saw a market demand asfactories were shutting down inEurope due to environmental pres-sures. We were very lucky to con-vince Kerr-McGee of OklahomaCity to enter into a joint venturewith us, as it was important tofind a strong technical partner andone that we could work with togain experience.

What are the possibilities fornew partnerships in the future?

Cristal is integrating verticallyand horizontally, and at presentwe are studying a possible jointventure with an American com-pany to make titanium metal orsponge, which is a strategic prod-uct made from titanium tetra-chloride and used in aircrafts andindustry. Also, there is an indus-trial cluster project called Nabaain Yanbu that will depend on lo-cal feedstock resources in petro-chemicals and minerals forpetrochemical refining, andmethanol, fertilizer, zinc and alu-minum production.

Cristal’s commitment to customer relations has converted itinto one of Saudi Arabia’s most highly regarded companies.

‘The industry sectorwill benefit greatly’

INTERVIEW

■ BUSINESS in Saudi Arabiais very much a family affair. Thesame pattern emerges over andover again: one enterprising manstarts a modest business, havingspotted an opening in the mar-ket or a new trend developing.A generation later, that man’ssons have taken the original con-cept and turned it into a mega-project, spanningseveral economicsectors and provid-ing much-neededgoods, jobs, and in-vestment opportu-nities.

The essentialcharacteristic that connects allof these enterprises has beeneach company’s ability and will-ingness to diversify. As SheikhKhaled Al-Juffali, the vice chair-man of E.A. Juffali & Brotherssays, “It is good to be diversi-fied. If one company goes down,the other may go up.”

Another common denomi-nator is a strong belief in the im-portance of human resources,such as finding the right person

for each job and creating an en-vironment in which teamwork,trust and reliability are the guid-ing concepts. Many of thesefirms also share a sense of re-sponsibility with regard to pro-viding jobs for local people, aworthy cause in a country witha very youthful population andrelatively high unemployment.

Finally, most of these diver-sified groups share a positive at-titude towards moderntechnology and innovation.

The kingdom’s meteoric eco-nomic rise over the past threedecades, ever since the first oilboom, has much to do with thesefirms’ commercial success. As

wealth in the coun-try has increased, sohas the spendingpower of both thegeneral public andthe government.People wanted con-sumer goods, and

the country needed roads,schools, healthcare centers,houses and new industries. Al-so, companies like Sara Group,Tamimi Group, Shairco, Al-Juf-fali & Brothers Group, Aal TaherGroup, Al Muhaidib Group,Jarir Group, Saad Group ofCompanies and Rawabi Hold-ing have all contributed a col-lective vision which has allowedSaudi Arabia to enjoy such un-inhibited growth.

■ SAUDI Arabia is one of thelargest markets for cosmetics andtoiletries, worth $1.3 billion in2003 and it is expected to exceed$1.4 billion by 2006. This is some-thing that has not escaped the at-tention of Sara Group, ranked24th in the Top 100 Saudi Arabi-an companies list last year.

Through its various enterpris-es, particularly Sara Corporation,Sara General Marketing Corpo-ration, and the very successfulParis Gallery retail outlets, Sara

Group meets this market demandon a daily basis. “We started withpharmacies and drugstores thatincluded a cosmetics counter,”says Mohammed Al-Fahim, Di-rector General of Sara Corpora-tion. The first full cosmetics outletwas a small perfume shop openedin the United Arab Emirates in1981 by Mr. Al-Fahim’s father,Abdul Rahim Al-Fahim. Sincethen, Paris Gallery has becomeone of the leading retailers of lux-ury international brands in theGulf region. At present there are35 Paris Gallery stores in the Gulfarea specializing in cosmetics,perfumes, eyewear, watches, andfashion accessories, and the num-ber is set to grow to 75. “We havefour shops in Saudi Arabia now,and aim to have 25 by 2008. Our

objective is to become numberone in the region in the luxurybrands category. We want to max-imize the opportunities for suchbrands here,” explains Mr. Al-

Fahim. The group also aims toopen 15 luxury department storeson a par with Gucci or Sachs FifthAvenue, keeping the large scalestyle. The smallest will be 129,000square feet.

At present, French productsdominate the market, especiallydesigner brands such as Chanel,Lancôme and Christian Dioramong others. The EuropeanUnion accounts for 34 percent ofall cosmetic and perfume importsto the kingdom, with China andthe Far East in second place. U.S.companies rank third, with closeto 16 percent of total imports. Theadvent of franchising is expectedto enhance the U.S. share of theSaudi cosmetics and perfumes

MOHAMMED AL-FAHIMDirector General of Sara

Corporation

The collective visionof Saudi companiesis one of the mainreasons behind thecountry’s success-ful business sector

Large-scale FifthAvenue-style stores:the next step forone of the country’sleading companies

Diversifiedgroups atheart ofdevelopment

Innovation and flair drive ambitiousluxury goods and retail enterprise

Prestigious international brands have used Sara Group’s in-depth knowledge of the local market to open flagship stores in Saudi Arabia.

The companiesshare a positiveattitude towards

moderntechnology and

innovation

SARA GROUP Saudi Arabia’s 24th largest company seeks to expand furtherDIVERSIFICATION Firms tap intoincreasing spending power of Saudis

Continued on page 8


Our World

ucts, insurance, financial trading,construction, hotels and proper-ty management.

Established in 1975 by Abdul-hadi Taher, the group evolved in-to a diversified and solid companyunder the leadership of the latepresident and CEO Khalid Taher.His brother Tarek Aal Taher be-came president and CEO of thecompany four years ago and dur-ing this period, the group quadru-pled its volume of operations."My brother was the backboneand the dynamo of the group,"says Mr. Taher. "I brought myown vision, after having workedin international markets, and didsome restructuring. But all throughthe years, our philosophy has nev-er changed. It has always beenquality, quality, quality." The Taherfamily can also count on the busi-ness acumen of Nashwa Al Taher,the director of the group, who, inNovember, was one of the first twowomen ever elected onto the boardof the Jeddah Chamber of Com-merce and Industry. Up until then,women were only allowed to votebut not to be candidates, and theelection of Ms. Taher, along withLama al-Suleiman, is an un-precedented step forward for Sau-di women.

The Aal Taher Group’s sharpeye for new opportunities both athome and abroad, as well as itscommitment to dynamic growththrough strategic acquisitions andpartnerships, has positioned it wellfor new expansion as Saudi Ara-bia registers unprecedented eco-nomic growth. "We are alwaysvery selective when choosing ourareas of diversification," says thecompany's president and CEO,who adds that given the currenteconomic expansion, domesticcompanies can benefit from part-nerships with others. "It is a factthat no single company is capa-ble of conducting all these mega-projects that are in the pipeline.So we have entered into a non-stop alliance developmentprocess."

At the forefront of the group’scompanies is Radwa Food Pro-duction, Saudi’s premier providerof quality poultry products. Agrowing presence in the GCC(Gulf Cooperation Council) coun-tries, Radwa has been ISO 9002accredited since 1996, and main-tains its high standards throughoverseeing all aspects of the pro-duction process. The company’ssite boasts its own hatcheries,power plant, desalination plant,feed mill and laboratories.

In line with Aal Taher’s repu-tation for quality and innovation,

which has produced ground-breaking products such as CicoLite, a lightweight aggregate withunique strength and thermal in-sulation properties for the group’sCIC Building Products Compa-ny, in December Radwa inaugu-rated a new state-of-the-arthatchery that will double the ca-pacity. Employing Smart tech-nology from Pas Reform, the newhatchery includes theAutomated HatchingSystem (AHS™),which optimizeschick quality andhatchery results, andshould increase Rad-wa’s productionfrom its current 28 million birdsper year to over 50 million – atimely enhancement as the com-pany steps up its expansion inBahrain, Qatar, Kuwait and theUnited Arab Emirates. Accord-ing to Mr. Taher, the launching of

this new plant will play a signif-icant role in the development ofthe agribusiness sector in the king-dom.

The Aal Taher Group has alsobenefited from a strong market-ing focus that has been a signifi-cant contributor to the group’srise in all its markets. A key ele-ment in its development strategy,continuous investment in mar-keting has paid off in spades foranother of the group’s companies,Asian Lubricating Oil CompanyLtd (Aloc). In 1994, Aloc launchedits Qbrex automotive lubricants

product range. The brand brokenew ground through its market-ing techniques and quicklyclimbed to the top of the Saudi lu-bricants sector. Through exten-sive research, Aloc formulatedthe Qbrex family of brands tocater to the requirements of alltypes and ages of vehicles oper-ating in the broad range of con-ditions that the demanding Saudi

environment encom-passes.

Other Aal Tahercompanies include Lu-brizol TransarabianCompany, Allied En-gineering, Eurabia En-gineering and

Construction, Roxby Engineer-ing International, Marketing andGeneral Trading Corp., ArabianHotels and Catering, and alsoUnited Hotels and Shopping Cen-ters Co. As Saudi Arabia joinedthe World Trade Organization(WTO) last year, the group be-lieves that the time to expand be-yond the region has arrived. "Onbehalf of our group, I welcomeSaudi's entrance into the WTO,"says Mr. Taher. "It will increasethe efficiency of our industriesand consolidate the overall econ-omy. We are one of the highestquality producers in Saudi Ara-bia. We offer the highest bio-se-curity, health security, andenvironmental safety. Based onthis, we believe that we should beable to quickly become a signif-icant international exporter. We aregrowing rapidly in Saudi Arabiaand the GCC countries. There isno reason why we shouldn’t beselling in Europe, and we are nowintroducing our products in Italyand Germany.”

Mr. Taher points out that be-longing to the WTO will alsodrive Saudi companies to be moreenvironment-friendly, a priorityissue for the founder of ReefChief, an organization for theprotection of Red Sea marine lifeand coral reefs (see box on page18). "Joining the WTO meansmany issues will have to be ad-dressed in terms of pollution andenvironmental impact and thisis a priority for our group.



■CONSISTENTLYranking inthe top 100 Saudi companies, AalTaher Group is one of the coun-try’s most complete and fully di-versified firms. Its activitiesinvolve high-tech maintenance,chemical manufacturing, foodprocessing, industry, oil by-prod-

■ CREATED in 2000, the Jeddah Economic Fo-rum (JEF) gathered about 2,700 heads of state andinternational decision-makers in the city of Jed-dah in February. Under the patronage of PrinceAbdel Majeed bin Abdulaziz Al Saud, Governorof Mecca Region, the theme of the 2006 Forumwas 'Seeding Potentials for Economic Growth:Honoring Identity and Celebrating CommonGrounds'. It was also attended by several mem-bers of the Saudi Royal Family and governmentofficials including Prince Turki Al-Faisal, SaudiAmbassador to the United States, Prince Al Waleedbin Talal, Chairman of Kingdom Hold-ing, Prince Sultan bin Salman, Sec-retary General of the SupremeCommission for Tourism, Hashim Ya-mani, Minister of Commerce, GhaziAl Gosaibi, Minister of Labor, Jubarahbin Eid Al Suraiseri, Minister of Trans-portation, and Abdullah Alireza, Min-ister of State.

The JEF was established in 2000 at the requestof the Jeddah Chamber of Commerce and Indus-try. International, regional and local leaders fromthe private and public sectors convene annuallyto discuss global and regional economic, politicaland social trends, to offer solutions to current andfuture challenges, and to enhance cooperationamong business leaders and organizations. "Fromthe very beginning we set out to establish the Jed-dah Economic Forum as an event that wouldachieve international recognition and each year wehave raised the bar to set even higher standards ofexcellence," says Amr Enany, Chairman of the Jed-dah Chamber of Commerce and Industry, addingthat Saudi Arabia's accession to the World Trade

Organization (WTO) and the crowning of KingAbdullah gave special relevance to the 2006 edi-tion of the JEF.

Delegates discussed the intricacies of social di-versity that affect economic growth around theworld, with the objective of counteracting a glob-al "one size fits all' economy by first recognizingand honoring cultural identity and identifying com-mon grounds as building blocks for sustainableeconomic growth.

In his opening statement, Prince Abdel Majeedbin Abdulaziz commented that globalization mustbe accompanied by a respect for cultural diversi-ty. “The contemporary world does not tolerate iso-lation, and at the same time it recognizes diversityof cultures. The subsequent success of the devel-opment plans depends on such a balance,” he said.He also stressed the importance of dialogue andintellectual exchange to foster economic progress.

Former U.S. Vice President Al Gore advocatedstronger links between the West and the Arabworld. “The 21st century has to be a century ofrenewal, and our ability to overcome these kindsof cycles of disrespect and violence is the key tomaking it a century of revival,” he said.

For his part, the Saudi Minister of Culture andInformation, Iyad Madani, highlighted the king-dom’s role as a moderating force in the region andthe rest of the world. “Saudi Arabia will continue

in its historic role as a moderating forcethroughout the world. It will peruse itstremendous effort to use its resourcesfor the welfare and growth of its peo-ple, society and institutions. It will bea source of a creative, authentic voicein great debates of our time. It will re-main a vanguard against terrorists and

terrorism.”Mr. Madani also encouraged women to increase

their representation in non-governmental organi-zations (NGOs) before running for office. “The ini-tiative should be taken by women activists,” he said.

Cherie Blair, the wife of British Prime Minis-ter Tony Blair, made a plea for women’s rights,stressing that the exclusion of women from the workforce was undermining the kingdom’s economicpotential. “It leads to a huge loss of human po-tential that has a massive cost for society, male andfemale,” she said. “Human rights and developmentgo hand in hand. Educating girls is one of the mostimportant investments a country can make in itsfuture. I believe women will soon be allowed tovote in elections here.”

TAREK ABDULHADI TAHER

President and CEO of Aal Taher Group

‘WTOmembership will

increaseefficiency andimprove theeconomy’

‘Saudi Arabiawill continue inits historic roleas a moderatingforce throughout

the world’

AAL TAHER GROUP Ambitious company grows through successful joint ventures

Carefully chosen strategic alliances have enabled the Aal TaherGroup to branch out into a wide variety of industries.

Leading group diversifies to expandAlways open to opportunities to diversifyits business, this leading Saudi companyhas shown genuine commercial flair

market. As far as Mr. Al-Fahimis concerned, U.S. companiesneed to be quick to seize the op-portunities available in the king-dom. “These are greatopportunities. If you miss outnow, you may not find themagain,” he says.

In recent years, Calvin Klein,Ann Klein, Ralph Lauren andCrabtree & Evelyn, among oth-ers, have launched their retail fran-chises in SaudiArabia, setting thepace for U.S. expan-sion into the appareland cosmetics mar-kets. Sara Group’sobjective is to enterinto partnerships withbrand owners, opening flagshipstores all over the kingdom dur-ing the course of the next fewyears as well as providing brandoutlets within their own ParisGallery boutiques.

“We offer these partnershipsall the necessary facilities tomanage their businesses,” statesMr. Al-Fahim. “We provide of-fices, back office technology,permanent visas, and deal withtheir financial needs.” As wellas partnerships and franchises,the group hopes to expand fur-ther by acquiring or mergingwith other firms selling luxury

items. In addition to providing retail

outlets for luxury goods, SaraGroup acts as the Saudi Arabi-an gateway for a number of ma-jor international companiesselling what are known as fast-moving consumer goods (FM-CG) – personal care, householdand other over-the-counter items– through Sara Corporation, itsmarketing and distribution arm.As well as selling on to retailersand wholesalers within the king-

dom, Sara Corpora-tion facilitates localimplementation ofglobal marketingstrategies, thanks toits in-depth knowl-edge of the localmarket.

The corporation’s self-pro-claimed objective is to ensurelong-term, profitable growth anddevelopment of the brands thatthey market. One successful en-trant into the Saudi market isProctor & Gamble, currentlyholding one of the highest mar-ket shares in FMCG, and nowconsidering entering the perfumebusiness. “They want to join withus in terms of marketing theirbrands. They know what theyare doing,” says the director gen-eral. “They say that we are theonly chain that can maximizeopportunities for their brand.”

SARA CORPORATION BRANCHES

Innovation and flair driveluxury goods enterprise

Sara Corporationis looking to

expand throughfranchising,

acquisitions andmergers


E.A. JUFFALI & BROTHERS Family firm committed to global collaborations

A role model for Saudi companies

■ PERHAPS one of the mostinspiring examples of genuinediversified interests and theway that Saudi companies canefficiently and successfullyenter into partnerships withforeign firms is E.A. Juffali &Brothers. Established in 1946,the corporation began its busi-ness activities in the electric-ity, communications andcement industries. Soon af-ter, Juffali moved into the fieldof commerce, becoming thesole agency within the king-dom for some of the world’slargest firms in various sec-tors. From agent, Juffali lat-er turned to manufacturing,producing these firms’ trade-mark items within the coun-try. Juffali purchased licensesfrom the original companies,embarking on the productionand assembly of trucks, trac-tors, air conditioners, refrig-

erators, steel buildings, heatinsulating materials, indus-trial adhesives, sinks and hardsurfaces, and cable-weldingmaterial.

“We created the manufac-turing plants for these compa-nies wherever it made sense.As well as cementing the re-lationship, this has served thepurpose of transferring thetechnology into Saudi Arabia,”says Sheikh Khaled Al-Juffali,the corporation’s vice chair-man and managing partner.

The company has becomeinvolved in various collabo-rations, such as printing withHeidelberg, computers withIBM, cars and trucks with Mer-cedes-Benz, auto parts and ac-cessories with Bosch, tires withMichelin, and tractors and agri-cultural equipment withMassey Ferguson. Likewise,they are working on petrole-

um well drilling with Pool,prefabricated steel buildingwith Butler, insurance withMunich Reinsurance, cablewelding with Raychem, med-ical equipment with Siemens,and technical equipment usedin workshops with Bosch,among many others.

“Progress through diversi-ty” has been the group’s mot-to, gaining strength and creditthrough associations with big

name companies such asKühne & Nagel, Ericsson, Car-rier, Kelvinator, Electrolux andDow Chemical among others,and pursing projects in trans-portation, telephones, air-con-ditioning, and chemicals. Butprofit is not the firm’s sole mo-tivator.

“We try to do something im-portant by creating work ratherthan just selling,” says SheikhAl-Juffali. The corporation hasestablished a training center inassociation with several othercompanies, providing techni-cal training for young Saudis.

“For many years we havebeen advocating that the Sau-di work force needs to be work-ing. It has paid off, for us aswell,” is the vice chairman’sview. “You have to train them.Sometimes you have to retrainthem. But the government to-day has supported Saudizationlike never before by creatingseveral avenues through whichit subsidizes salaries, encour-aging companies like ours toincrease the percentage of Sau-di staff as much as possible,”he adds.

KHALED AL-JUFFALIVice Chairman and

Managing Partner of E.A. Juffali & Brothers

A valued partner of some of the world’smost prestigious companies, this Saudifirm has stuck firmly to its corporate mot-to, ‘progress through diversity’

GLOBAL COOPERATION

Jeddah Economic Forum 2006sought to ‘honor identity and celebrate common grounds’

Cherie Blair speaks about the increasinglyimportant role of women in Saudi society.

S. ARABIA USAT pagina 8 .qxd 8/3/06 22:29 Página 2



■ THE development and growthof the Tamimi Group runs par-allel to the development of theKingdom of Saudi Arabia itself.The company’s first operations,during the kingdom’s earliestdays, and under the leadershipof the present executive’s fa-ther, Sheikh Ali Abdullah Tami-mi, helped to create the country’score infrastructure: hauling ma-terials, building roads, layingpipelines, erecting petrochemi-cal and industrial facilities, con-structing housing, and providinglife support and transportationservices for workers and freight.

Expansion and diversificationfor the firm has continued tofollow the needs of the king-dom, with important contribu-tions being made in the fields ofpetrochemicals, oil and gas pro-duction, pharmaceuticals, ho-tels and other service areas suchas catering, supermarkets, laun-dries and insurance.

Keeping up with the momen-tum of the continued nationalfocus on industrialization, Tami-mi Group has taken an activepart in manufacturing industriesas well as in advanced tech-nologies. In all, the group em-ploys more than 16,000 peopleof some 28 different nationali-ties, distributed across its sev-eral dozen companies engagedin highly diversified activities.

Among the group’s companiesare Tamimi Markets, whichopened its first store in 1979, andis the pioneer of the modern su-permarket concept in Saudi Ara-

bia, Tamimi Real Estate, Tami-mi Commercial Division, one ofthe kingdom’s oldest and largestimporters and distributors, andthe Thrustboring ConstructionCompany Ltd., formed in 1998to meet the growing demand fortrenchless technology and cur-rently the market leader for thesector.

The group also deals with cater-ing, and Tamimi Global Compa-ny Ltd. (Tagfa) is recognized asthe premier company in its in-dustry, providing catering, oper-ations and maintenance, andhousekeeping services to majorcustomers, including Aramco,

Sabic, the U.S. Military, and theSaudi Arabian Ministries of De-fense and Health.

Tamimi Group started goingglobal in 1992, when thefounder’s sons took over themanagement of the company.“Now we compete with Amer-

ican companies,” says SheikhTariq Tamimi, the group’s pres-ident. The preferred method forgrowth is through joint ventureswith international companiesboth at home and abroad. Thiskind of partnership is helpingto expand the group’s cateringinterests in the U.S., where it isconsidering bidding for collegecontracts. “I believe catering isour fastest-growing arm in Eu-rope, and one day may be in theU.S. also,” he adds (see box be-low).

General Electric (GE), a di-versified technology, media andfinancial services company, hasbeen present in the Middle Eastsince 1930. Saudi Arabia is oneof the firm’s strongest growthmarkets, contributing more than$750 million in revenues in2004. GE is involved in a num-ber of successful joint ventureswith the Tamimi Group, pro-viding engineering equipmentmaintenance and repair, gener-ator manufacturing, anti-corro-sion technology, powerequipment rental, and supplyof electrical, mechanical andindustrial products.

“We all studied in the U.S.and we communicate easilywith Americans, which hashelped us enter into many jointventures,” says Sheikh TariqTamimi. “We are not differentfrom other Saudi companies,but perhaps our organization ismore typical of the Westerncompany philosophy, particu-larly U.S. companies.”

But the firm does not losesight of priorities at home. Akeen supporter of the govern-ment’s Saudization campaign,Tamimi provides opportunitiesfor young Saudis to train with-in the company’s various sectors,and prioritizes the employmentof Saudi nationals.

The group prides itself on itscommercial prudence, entre-preneurial flair, sound man-agement and commitment toquality. The Tamimi Group rep-resents over fifty years of de-velopment and evolution duringwhich Saudi Arabia has under-gone a profound transforma-tion, and it is proud of the partit has played in the country’sprogress.

Sheikh Tariq Tamimi be-lieves that Saudi Arabia’s ac-cession to the WTO willcontribute more momentum tothe company’s developmentand ease foreign relations. Thegroup remains open to jointventures. “A foreign compa-ny no longer needs a sponsor.It can operate as a local com-pany. But it will still need a lo-cal who knows the countrybetter than they do.”

TARIQ A. TAMIMIPresident of Tamimi Group

of Companies

Joint ventures with global players such asGE help consolidate group’s success

At the forefront of SaudiArabia’s development

TAMIMI GROUP Commercial prudence pays off for Saudi giant

As one of the kingdom’s most experienced companies, Tamimi’s continued expansion anddiversification have seen it move into areas such as catering, technology and construction.

■ TAMIMI Global Compa-ny (Tafga), along with itssubsidiaries Kuwait PearlsCatering Company, Gulf In-ternational Catering, and itsUnited Arab Emirates jointventure, International Cater-ing and Services, providescatering and life support ser-vices in the whole MiddleEast region, and is recog-nized as the regional leaderin this sector.

With 11,000 highlytrained employees, Tagfaprovides staff catering,housekeeping, housing, op-erations of community andindustrial facilities, life sup-port services, commissaries,arrangements for special

functions and aviation cater-ing. In addition, it owns andmanages a number of West-ern style accommodations.Among its customers are theSaudi oil company Aram-co, the petrochemical com-pany Sabic, and the U.S.Army.

The company has a cen-tral warehouse in Khobar inthe eastern part of the coun-try, on the Persian Gulf, anda transport fleet of over 500vehicles including 45 re-frigerated trailers and 80chilled trucks. Tamimi Glob-al Company currently has160 active contracts, andprovides 1.2 million servicesa day.

CATERING

Helping workers feelat home

TAM

INI


Our World

ready the largest laptop distrib-utor in the Middle East, hopesto triple its 2004 sales figures of$220 million by diversifying theproduct base with a increasedemphasis on IT and computersupplies, the current top sellers.Plans also include opening new

stores both within Saudi Arabiaand the wider region, includingBahrain, Oman, UAE, Iraq andEgypt, with the goal of expand-ing the company’s network to30 stores by 2008.

“Expansion forms part of ourplan, but we want to make sureour representation and marketshare in each country is up to thelevels we are cur-rently experiencing.This way we will se-cure a strong partic-ipation in eachmarket rather thanbeing a small play-er everywhere,” ex-plains Mr. Al-Agil.

Jarir Investment, another com-pany in the Jarir Group, has ac-tivities in construction, realestate, retail and investment. Itwas established by five of the Al-Agil brothers in the mid-80s,

and it is an American style fam-ily business which allows thegroup to invest globally. Muham-mad Al-Agil, chairman of JarirGroup and, like his brothers, agraduate of an American uni-versity, comments, “Jarir In-vestment is a partner in severalprivate equity funds and hedgefunds, which are managed in the

U.S. In fact, we havemanaged to becomeparticipants in at least15 of the most well-known equity groupsin the U.S. We are al-so involved in Amer-ican stock and realestate ventures, and

to a lesser extent we are partic-ipants in the European econo-my.” At home, Jarir Investmentis a shareholder in various ma-jor Saudi companies throughventure capital.



■ JARIR Marketing Company(JMC) is a local success story,and a great example of the closeand mutually beneficial ties thatcan exist between Saudi Arabiaand the U.S. At the height of the70s oil boom, a simple family sta-tionery shop grew into a massivebook and stationery store basedon the U.S. model. The compa-ny, which is a leading reseller ofschool supplies, office supplies,books, printed material, com-puters and IT products, todayhas a network of 16 bookstoresand six wholesale showrooms,and has embarked on a success-ful regional expansion in Qatar,Abu Dhabi and Kuwait.

Innovation, commitment tostandards, and a close relation-ship with suppliers, many ofthem American, are the keys tothe firm’s phenomenal growth.JMC’s sales have been growingat a rate of 17 percent annuallyover the last four years and thefirm ranks 52nd in Saudi Arabia’stop 100 companies. “We are acombination of many successfulstores in the United States, whichis what makes us unique,” statesJarir Bookstore CEO Akram Al-Agil.

In 2000, JMC became a closedjoint stock company and wentpublic in 2003. Market reactionwas extremely positive and to-day the company has a marketcapitalization of nearly $1.6 bil-lion. Shares are currently worthmore than $260 (par value$13.3), and authorized share cap-ital has recently been increasedfrom $64 million to $80 millionby way of 1:4 bonus issue.

By 2010, JMC, which is al-

MUHAMMAD AL-AGILChairman of Jarir Group

Today they havea market

capitalization of$1.6 billion,

while shares areworth more than $260

REALTY Saudi Arabia’s fast-growing population drives construction boom

Investors eye up property sector

SALMAN ABDULLAH BIN SAEDAN

Managing Director of OlayaReal Estate Co.

Family-based real estate company in theprocess of constructing an entire city

Heading in the right direction: experts estimate that real estateactivity in Riyadh alone could be worth around $80 billion.

■ THERE are at present no of-ficial statistics on the real estatemarket in Saudi Arabia; how-ever, experts from the sector es-timate that it is the biggest in theMiddle East, with the highestprices per square foot in theworld in some areas. But real es-tate activity in Riyadh – whichaccounts for about a third of allsuch activity in the kingdom –could represent around $80 bil-lion.

Estimates vary slightly as tohow much new housing is need-ed for Saudi’s ever-growing pop-ulation. According to a study bya German company, the coun-try will need 300,000 residen-tial units over the next 15 years,calculating an annual growth indemand of 3 percent. It has al-so been suggested that there is

a shortage of 225,000 residen-tial units in Riyadh alone, andthat the overall figure could beas high as one million.

In either case, real estate looksset to be a burgeoning sector asthe economy continues to ex-pand. As Salman Abdullah BinSaedan, Managing Director ofOlaya Real Estate Co., says,“The success of other sectors isreflected by real estate activity,which gets its strength from thegovernment, which gets it fromoil revenues.” Olaya Real EstateCo., a family-based companyoperating on Islamic principles,develops residential projects inSaudi Arabia and other GCCcountries, with a strong com-mitment to innovation, quality,affordability and access.

One of the company’s mostambitious projects to date is theconstruction of an entire citysouth of Riyadh. The first pro-ject of its kind in the country, itwill provide residential units,infrastructure, and essential ser-vices including schools, clinics,mosques and shopping facili-ties.

Mr. Bin Saedan is hopeful thatsome kind of mortgage systemwill emerge in Saudi Arabia, al-lowing more citizens access toproperty ownership.

A POSITIVE American influence inspires an Arab business

Booksmart business growsFrom a small shopto a regional empire,JMC sets an exam-ple to be followed

INTERVIEW

‘We need to strengthen exchanges with the U.S.’

How did you and your brother Akram createthe Jarir Group?

Muhammad Al-Agil: It started with a simplestationery shop that our father owned. At the be-ginning of the 80s, we decided to develop ourfather's business and convert it into a mega-sizebook and stationery store, like the ones we hadseen in the U.S. where we had studied. Our firststore was conceived by a renowned New Yorkdesigner in 1980.

Your family has since diversified its busi-nesses, correct?

When our father passed away, four of mybrothers and I created another company, alsobased on the American model, called Jarir In-vestment. This is the company through whichwe invest globally and, up to now, we partici-pate in 15 of the most well-known American

private equity groups. Jarir Investment is alsopresent in Europe, and it also invests in theSaudi economy. Through venture capital pro-jects, we are shareholders of various importantSaudi companies in sectors such as education,manufacturing and steel.

Since your group is an investor in Americancompanies, do you foresee American investorstaking an interest in Jarir?

I do not see any problem with that. We havea very good relationship with the U.S. and wedefinitely think that there are great investmentopportunities in the kingdom. It is true that thereare misconceptions here about the United States,as there are misconceptions about Saudi Arabiain the U.S. We need to strengthen the commu-nication between the two countries through theexchange of students and through more tourismand travel, for example. The fact that our coun-try is opening up to tourism will definitely havea positive impact on our external image.

The chairman of Jarir Group shedslight on its past and its future


Our World

trial, commercial and residentialcustomers in the industrial cities.This means that Marafiq providesservices to some of the largest in-ternational companies in the worldthrough their bases in Yanbu andJubail, including Chevron, Mit-subishi, Shell and ExxonMobil.

And it does it well. As the firstcompany in the Gulf to employone of the world’s leading enter-prise resource planning systems,mySAP.com, as well as mySAPCustomer Care System, Marafiq’smanagement and its customer ser-

vice departments arewell equipped to mon-itor all aspects of thebusiness and to in-crease response lev-els to customer needs.The company’s utili-

ty plants in Jubail comprise the sin-gle largest seawater cooling systemin the world. In Yanbu, the inte-grated seawater cooling, desali-nation, wastewater treatment,power generation, transmissionand distribution plant constitutesone of the largest integrated sys-tems of its kind on the planet.

“We achieved a solid financialperformance in our first year, im-proved on it in our second year,and this year we expect to do evenbetter,” says Mr. Al-Marei. “Ourvision is focused on our customers.We are committed to performanceand operational excellence to ex-ceed our customers’ needs andexpectations. We have been do-ing a lot to ensure that we areamong the best utilities companies,not only locally and regionallybut also internationally. We have

a strong performance-oriented cul-ture.”

One of Marafiq’s greatestachievements lies in its support ofSaudi Arabia’s industrial sectors.Providing the water and power forthe nation’s massive petrochemi-cal industries in Yanbu and Jubail,Marafiq plays an invaluable role inthe diversification of the economy.This role is expected to grow as theindustrial cities continue their ex-pansion. Already one of the biggestpetrochemical hubs in the region,Jubail Industrial City is now dou-bling its capacity in anticipation ofthe influx of new companies thatWorld Trade Organization mem-bership will bring.

The development of the twonew industrial cities of Jubail IIand Yanbu II will open up Marafiqas the nearest and most viableprovider of utility services. “Weplan to provide integrated ser-vices, common to all customers,in a plug-and-play concept de-signed to reduce their capital cost.In addition to power and water, wewant to provide other essentialssuch as steam, air and gas as a cen-tral utility service,” says Mr. Al-Marei.

To meet the projected increasein power and water demand,Marafiq is developing two inde-pendent water and power plants(IWPPs) of national significancein Jubail and Yanbu. The IWPPin Jubail will have a desalinatedwater output of 800,000 cubic me-ters per day. Power output will be2,500 megawatts. A prefeasibili-ty study on the technical, finan-cial, environmental and economicaspects of an IWPPproject in Yan-bu has shown that 1,500megawatts of new power gener-ation will be needed by 2009.

For the future, Marafiq does notrule out the possibility of region-al and international expansion. Inthe meantime, the company ispreparing to float the majority ofits shares on the stock exchangein the near future.

Distributed by USA TODAY11 Wednesday, March 29, 2006


The group was founded in 1943 by the late Sheik Abdulkadir Abdulmohsin Al-Muhaidib, a visionarywho expanded the group’s business horizons with timely innovations and responding to people’sneeds and resulting in business activities that now spread across the world, from North America toEurope, South East Asia, the Indian Subcontinent and the entire Middle East.

Today, under the pragmatic leadership of Group Chairman Mr. Sulaiman A.K. Al-Muhaidib, the group’scommercial activities encompass various sectors, including industry, contracting, building materials,services, manufacturing, retail, food & fmcg, banking, equity investments, real estate, logistics, powergeneration, petrochemicals etc.

The group’s responsible and resourceful vision has led to it becoming the local and regional partner of choicefor international companies, committed to developing,expanding and diversifying business interests.

A.K. Al-Muhaidib & Sons Group is one of the largest conglomerates in theKingdom of Saudi Arabia.

A.K. AL-MUHAIDIB & SONS GROUP OF COMPANIES

www.muhaidib.com

Construction projects are constantly getting underway, such asa women’s university and various new healthcare facilities.

■ A.K. Al-Muhaidib &Sons group of companiesbegan its life in the foodproducts industry in 1959,marketing and distributingrice. Although this sectorhas remained the fastest-growing within the group,allowing the company to ex-pand its portfolio to includeother grains and eventuallyleading to the establishmentof a retail outlet chain, Gi-ant Stores, the group relatesits overall success to diver-sification. By maintaininga presence in various inde-pendent economic sectors,the company is assured thatindustries on the rise willcarry any sector that maynot be doing so robustly.

The group’s other maininterest, building materials,has thrived along with Sau-di Arabia’s economic and

industrial development. Aneye for the right opportuni-ty and the right partner withwhich to do business arecentral to the group’s suc-cess, and this is down tocareful selection of man-agers. Indeed, human re-sources are a priority atAl-Muhaidib, a fact that isreflected in the low staffturnover.

Sulaiman Al-Muhaidib,the group’s chairman, iskeen to acquire more part-ners from the U.S. “Withthe growth of opportunitieshere, the Saudis are callingout to the Americans. EverySaudi would like to workwith Americans becausethey think big,” he says.

SULAIMAN A. AL-MUHAIDIB

Chairman of A.K.Al-Muhaidib & Sons

A.K. AL-MUHAIDIB & SONS

Saudi group calls out to ‘bigthinking’ American investors

■ CONSTRUCTION is oneof the largest economic sec-tors in Saudi Arabia, alongwith petrochemicals, mining,oil and oil-related industries.Its steady expansion is likelyto continue over the next fiveyears, following the growth inindustry and public spendingon hospitals, schools and uni-versities.

Specializing in the build-ing of hospitals is Al-FouzanTrading & General Construc-tion Co., which has been op-erating since 1993.“Specialization in hospitalsis challenging. We areequipped with expert engi-neers and technicians, and wework with doctors to knowtheir needs,” says Tariq Al-Fouzan, the company’s con-struction sector manager.

Al Fouzan’s best-executedproject is the cardiovascularcenter in King Fahd Hospitalwhich has five state-of-the-art operation rooms wherethey perform all types of ad-vanced surgery. The compa-ny is also justly proud of theoncology building in KingFaisal Specialist Hospital.Current projects include a hos-

pital in Riyadh, set to be fin-ished by the end of 2006, and,as a change from the norm, auniversity.

Other changes are in thepipeline says Mr. Al-Fouzan.“Over the next five years wewill go from being a familybusiness to a joint stock com-pany. We will expand, andmaybe open new divisions.”Entering into joint venturesat this stage falls within thecompany’s plans.

TARIQ M. AL-FOUZANConstruction Sector

Manager of Al-FouzanTrading & GeneralConstruction Co.

CONSTRUCTION

Building a healthyfuture: companyfocuses on hospitalconstruction

■ SAUDI Arabia’s first privateintegrated utilities company,Marafiq, began operations in 2003and is considered to be one of the30 best companies in the country.Created to provide both powerand water to the industrial citiesof Yanbu, on the Red Sea, andJubail, on the Arabian Gulf,Marafiq is a study in the forma-tion of the perfect enterprise. Someseven international consultantswere called in to design the com-pany, drawing on the experienceof utilities worldwide and tailor-ing their solutions toSaudi needs. Work-ing hand in hand withthe Marafiq manage-ment team, this groupof international legal,technical, financial,ITand regulatory experts built thecompany from scratch. The re-sult was a sound commercial foun-dation, state-of-the-art technologyand extensive, effective infra-structure.

Marafiq President and CEO,Abdullah Al-Marei, says that be-fore the company was created, thegovernment consulted the WorldBank about privatizing the sector.“The World Bank consultants saidthe venture was a golden egg- ex-tremely feasible and very prof-itable. They asked why Saudiswere going abroad to invest whenthey had this treasure here athome,” he relates. Thus, the busi-ness was established as a jointstock company with four majorshareholders – the Royal Com-mission for Jubail and Yanbu, Sau-di Basic Industries Corporation(Sabic), Saudi Arabian Oil Com-pany (Saudi Aramco), and thePublic Investment Fund. At itsstart-up date in January of 2003,Marafiq had $650 million of ini-tial owner equity.

The company’s main objectiveis to undertake the operation, main-tenance, management, expansionand construction of seawater cool-ing systems, desalinated and treat-ed water systems, sanitary andindustrial wastewater systems andelectric power systems to provideessential utility services to indus-

Providing top-notch power and water ser-vices, Marafiq is a veritable study in the for-mation of the perfect company

Marafiq’s integrated power and water utility plant in Yanbu.

UTILITIES The company’s state-of-the-art IWPP facilities will be the largest on the planet

Marafiq diversifies economy,supports industrial sector

‘We arecommitted toperformance

and operationalexcellence’

ABDULLAH AL-MAREIPresident and

CEO of Marafiq

S. ARABIA USAT pagina 11.qxd 8/3/06 22:38 Página 1

Our World

■ TOPPING the list of SaudiArabia’s diversified businessesis Saad Group, established in1980 and ranked today as one ofthe top ten companies nation-wide and in the top 25 in theGulf region. Chairman Maan A.Al-Sanea, one of the most re-spected entrepreneurs in SaudiArabia for his business acumenand his philanthropic endeav-ors, has invested the last twodecades in creating a dynamicgroup of 37 companies that havecome to represent excellence andprogress in the Kingdom.

Saad’s flagship company, SaadTrading & Contracting, was orig-inally formed to carry out infra-structure projects in the westernprovince in the early eighties.Diversification began at the endof the decade and throughout theearly part of the 1990s when theGroup formed the Saad Tourismand Travel Company to accom-modate its expatriate workforce.They established an IT compa-ny to improve vertical integra-tion and ventured into propertydevelopment as a result of agrowing land bank portfolio.Saad Investments CompanyLimited (SICL), part of theGroup’s financial arm, was alsoformed at this time and as a re-sult of the Gulf crisis in 1990.SICLtook over the managementof the Group’s offshore assetsfrom Saad Securities Company,which was based in Bahrain andhad been responsible for theGroup’s finances since its in-ception in 1984.

Around this time Mr. Al-Saneabegan to pursue issues closer tohis heart and started a processthat would ultimately end updefining his Group – benefic in-volvement. Following the lossof his eldest son in1989, Mr. Al-Saneaset about establish-ing the Saad AlSanea Centre forCommunica t i onDisorders. Afree ed-ucational center forchildren who sufferfrom speech and hearing dis-abilities, the center today has acapacity to accommodate 600children as well as 200 teachersand instructors. Once the cen-ter was up and running, it soonbecame clear that the childrenneeded more than just educa-tion. Consequently, Saad Groupfounded a small medical clinicto support the school. This smallclinic grew rapidly to becomewhat is today a 1,000-bed hos-pital and the most specializedprivate healthcare facility in theMiddle East. In roughly the same

period, the Saad BenevolentFund sponsored the construc-tion and operation of two privateschools, and the Group’s in-volvement in education began.

The overall result today is athriving and varied collectionof privately owned and operat-ed companies with a total networth of over $5 billion, and ac-tivities in civil construction,property development, designand engineering, medical ser-vices, information technologyservices, travel services, edu-cation and investment. Saad

Group employs over9,000 people world-wide, and althoughbased in Al Khobar,the Group has a pres-ence in five conti-nents with officesand affiliates in Jed-dah, Riyadh,

Bahrain, London, Paris, the Cay-man Islands, the Netherlands,Geneva, Jersey and the U.S.

In addition, Saad has be-come a synonym for quality.The Saad Specialist Hospital isthe premier healthcare facility inthe Middle East while the SaadInformation Technology Com-pany is the national IT leader.The Saad Travel and TourismCompany is a member of IATA,uses the latest global technolo-gy in the industry, and is thegeneral sales agent for SaudiArabian Airlines. The Group’s

■ SINCE accepting its first in-patient in February 2001, SaadSpecialist Hospital (SSH) hasemerged as one of the Kingdom’sleading medical centers. Affili-ated with some of the most promi-nent healthcare institutions in theworld, SSH is accredited by theJoint Commission Internation-al, making it only the second pri-vate hospital in the Arab worldto achieve this distinction. It islikewise accredited by the Cana-dian Council for Health Services.

“Quality is key in healthcaredelivery, and must be the baselinefor competition in the private sec-tor,” says SSH Chairman MaanAl-Sanea. “Sooner or later, pa-tients and insurers will realize thatquality actually costs less in termsof improved outcomes and healthmaintenance and will demand ac-c r e d i t e dproviders. Imple-menting qualitymay increase ini-tial investment,but in the long runeveryone bene-fits”.

SSH’s com-mitment to qual-ity and its “centerof excellence”strategy is evidentnot only in its out-standing facilitiesbut in its profes-sionalism and pa-tient focus. Thehospital boasts amultinational staff of 350 physi-cians, including 140 consultantphysicians superbly qualified inhis or her particular disciplinewith American or British boardcertifications. In addition, morethan 700 nurses in over 40 spe-cialties complement a broad of-fering of patient care programs.

SSH provides primary and sec-ondary medical and surgical spe-cialties ranging from familypractice, cardiology, vascularsurgery, and neuro and plasticsurgeries. As a tertiary care fa-cility, SSH also offers oncology,cardiac surgery, advanced or-thopedic and rehabilitation ser-vices, reproductive (IVF)services, stroke rehabilitation,

physical medicine, and a host ofadditional diagnostic and thera-peutic services.

While health is a relativelynew Saad interest, it already rep-resents the Group’s largest cap-ital outlay in the country. “Today,Saad’s single largest capital in-vestment in Saudi Arabia is theSaad Specialist Hospital and,without a doubt, the fastest-grow-ing segment in the group is health-care,” comments Mr. Al-Sanea.“Population growth, increasedprosperity and education com-bine to intensify market re-quirements for both basic andcomplex health services.”

Mr. Al-Sanea says that gov-ernments worldwide are findingthey can no longer pay the healthcare bill and consumers are de-manding even better services.

Private health-care will clearlybe the beneficia-ry of this busi-ness opportunity,with future suc-cess dependingon private hos-pital owners.“The healthcareindustry is ripefor enormouschange”, saysMr. Al-Sanea.“Like all well-developed coun-tries, SaudiArabia mustcome to grips

with who pays the bill, with thefunding of private healthcare bypersonal insurance inevitable inthe Kingdom. The private sec-tor will ultimately emerge as thedriver of healthcare innovationand excellence in Saudi Arabia.”

This year SSH will open theonly private oncology and organtransplant facility of its kind inthe Middle East, and the hospi-tal’s long-term aim is to becomea regional referral center for theGulf States and the Middle East.In time, Saad Specialist Hospi-tal plans to become synonymouswith superior medical care, alearning center for medical ca-reers, and a comprehensive re-search center.

■ SAAD GROUP has becomeknown for its invaluable contri-butions to Saudi society, and forits efforts to develop first classpeople-oriented services that en-rich the quality of life.

The Group founded the SaadCentre for Communication Dis-orders in the early 1990s, and hassince financed two schools anda major world-class hospital. TheSaad Al-Sanea Centre for Com-munication Disorders is a state-of-the-art facility dedicated toeducating and ultimately main-streaming children suffering fromspeech and hearing disabilities.In addition to the classroom en-vironments, the center has spe-cial areas designed to providesafe individual and group motoractivity, and all its departments

are equipped with the latest med-ical equipment, audio-games, au-diometers, diagnostic tools formedian and internal ear functionas well as specialist evaluation andauditory training facilities.

The Saad Specialist Hospital(SSH) is located near the Centrefor Communication Disorders inAl Khobar. Opened by SaadGroup in 2001, the hospital is theMiddle East’s premier healthcarefacility and has achieved its goalof making high-quality, complexmedical care readily available tothe local community. Staffed byexperts from around the globe,SSH maintains a world-class sta-tus from business strategy andadministration to staff manage-ment. Its state-of-the-art equip-ment includes a full range of

diagnostic imaging modalitiessuch as MRI and CT scanners,advanced laboratory analysisequipment, and a host of mod-ern therapeutic and patient mon-itoring devices for adults, childrenand newborn infants.

Saad Group’s contributions toeducation are carried out throughits charitable institution, the SaadBenevolent Fund. The Groupbuilt and operates the NationalSchool for Boys, as well as itscounterpart for girls, taking in atotal of 7,000 pupils per year. TheFund also sponsors university ed-ucations for underprivileged stu-dents from all backgrounds.

The Saad National Schools’(SNS) philosophy is that chil-dren who receive a first class ed-ucation are better prepared to lead

active and responsible lives. TheSNS were established to provideprivate educational institutionsthat participate with other schoolsand colleges. They seek to offerlearning through a cooperativeand interactive environment fo-cused on meeting the individualeducational needs of each stu-dent. The schools are now in ne-gotiations with variouspost-secondary institutions, suchas City University in London, tooffer full degree courses.

In May 1999, SNS was grant-ed ISO 2002 accreditation by theCanadian Quality Institute. In2000, SNS was ranked firstamong all private schools in theKingdom, and in 2001, was grant-ed a letter of distinction by theMinistry of Education.



Saad Groupspans five

continents andits 37 companieshave a total networth of over

$5 billion

Branching out andcombining businesswith philanthropy,Saad Group provestalented in moreways than one

BUSINESS From a single flagship company to the leading role in various sectors

Operating a successful groupof specialized companies

HEALTHCARE

‘The private sectorwill be the drivingforce in innovation’

MEDICINE AND HEALTH

Saad Specialist Hospital sets newstandards for quality in healthcare

MAAN AL-SANEAChairman of Saad Group

property development divisionhas become known for high-enddevelopments such as the Oa-sis Residential Resorts in AlKhobar, a luxury getaway withover 1,000 villas, 200 apart-ments and 300 suites.

Saad’s financial services di-visions, SICL and Saad Finan-cial Services, generate over 50percent of the Group’s revenues,and manage a portfolio of in-terests in global money mar-kets, as well as in internationalreal estate, equities, bonds andfunds. In 2004, SICLestablishedAwal Bank in Bahrain and isnow in the process of creatinga subsidiary in Dubai. Awal

Bank provides a range of off-shore banking services, includ-ing investment banking,corporate and trade finance, andIslamic product offering.Through its focus on the GCCand MENA, the Middle Eastand North African regions, thebank will complement SICL’soperations by offering expand-ed geographical reach, under-scoring the Group’s generalplans for regional expansion.In addition, with the enactmentof the capital market authorityin Saudi Arabia, Saad’s finan-cial divisions are looking for-ward to playing a leading rolein the local market.

SPECIALIZED FIELDSCHARITABLE WORKSSaad Center for Communication DisordersSaad Benevolent Trust

EDUCATIONSaad National School for BoysSaad National School for Girls

HEALTHCARESaad Specialist HospitalSaad Medical CenterSaad Training Institute

RESIDENTIAL DEVELOPMENTOasis Residential Resorts Development

TRAVEL AND TOURISMSaad Travel & Tourism Co.

LIGHT INDUSTRYSaad Industrial Facility

INFORMATION TECHNOLOGYSaad Information Technology Co.

BANKING AND INSURANCELocal and international relations

From their company headquarters in the city of Al Khobar, Saad Group directs its extensiveprojects which range from education to travel and investments to hospitals.

The Saad Specialist Hospital is one of the top ranked in all of Saudi Arabia and offers treatment services in more than 40 specialties.

S. ARABIA USAT 11-20.qxd 8/3/06 22:41 Página 2

■ BESIDES being ranked asone of the world’s largest oilproducers and exporters, SaudiArabia is also a global leader inpetroleum-related industries.The Saudi Arabian LubricatingOil Company, or Petrolube, isthe producer and marketer forPetromin Oils, the kingdom’spremier company in the pro-duction, marketing and distrib-ution of lubricants. A jointventure between Saudi Aramcoand Exxon Mobil, the firm islooking to further privatize in2006, making the company evenmore competitive.

“Both Saudi Aramco andExxon Mobil are pushing ag-gressively to privatize. For mar-ket value, we want to shift froma joint stock arrangement into afully public company,” saysPetromin CEO Salem H. Sha-heen, who adds that the companyhas spent the last two years im-proving sales, revenues and prof-its margin. “We still have thehighest market share in SaudiArabia, and we have increasedand improved our market sharein 25 international markets.”

Today, Petrolube fabricatesover 150 different products, andPetromin Oil is the main lubri-cant used in power generationand marine transport lubrica-tion in Saudi Arabia, where thecompany has 28 percent of themarket share, 57 percent in-cluding the company’s blend-ing and packaging for third-partybrands. Petrolube also exportsto over 35 countries in the GCC,Middle East, Africa and Asia. In2004 the company increased itsmarket share in the kingdom by4 percent over the previous year,and its restructured retail sales

unit increased sales by 76 per-cent. It also entered new mar-kets in Algeria, Senegal, Tunisia,Mauritania, China and Iraq,boosting international sales by37 percent.

Much of 2005 was spentreadying the company’s busi-ness model for its upcoming pri-vatization, although two new

products were also launched –a semi-synthetic oil and a newdiesel lubricant. Last year’sstreamlining has led to increasedproductivity, reduced opera-tional costs and the outsourcingof non-core activities. Ongoingactivities include the consoli-dation of the company’s threeblending plants into two, andincreasing reliance on IT andautomation.

The company’s plants, whichare located in Jeddah, Riyadh,and Jubail, have a current blend-ing capacity in excess of six mil-lion barrels per year,representing the largest blend-ing capacity in the Middle East.

Petrolube also owns and oper-ates a grease manufacturingplant in Jubail, and is in theprocess of outsourcing its drummanufacturing facility inRiyadh, which has a current ca-pacity for 400,000 drums an-nually, to a U.S. company. “Wedecided we needed to bring inmore expertise specializing indrum production,” explains Mr.Shaheen. “Drums for lubricantsare relatively easy to produce,but for chemicals and petro-chemicals, the containers aremore complicated.”

In addition to a variety of spe-cialized lubricating oil, thePetromin Oils product range in-cludes gasoline motor oil anddiesel engine oils, turbine oils,brake fluids, automatic trans-mission fluids, marine oils, rail-road oils, cutting oils, gearboxoils, hydraulic fluids, trans-former oils, antifreeze coolants,and metalworking fluids. Petrol-ube was the first Saudi lubri-cants company to receiveISO-9002 certification, and allPetrolube products are produced,tested and certified to meet OEMglobal standards.

In 2006, Petrolube will con-tinue with its international ex-pansion, according to Mr.Shaheen, who says the compa-ny is focusing on high volumemarkets such as China, where italready has an agreement.Petrolube is also in talks for amarine lubricant in India, and islooking at introducing otherproducts for Turkey, Malaysiaand Indonesia. He adds, “Wewant to push ourselves moreheavily in our international mar-kets. We have identified sevenof our current markets that wesee as especially high share ar-eas with potential for futuregrowth so we will shift to a moreaggressive marketing approachthere.”

Distributed by USA TODAY13 Wednesday, March 29, 2006 Our World


For more information contact: SAUDI GEOLOGICAL SURVEYP.O. Box 54141, Jeddah 21514 P.O. Box 6955, Riyadh 11452Tel: (966-2) 619 5000 Fax: (966-2) 619 6000 Tel: (966-1) 476 5000 Fax: (966-1) 476 6000Website: www.sgs.org.sa E-mail: [email protected]

The Saudi Geological Survey (SGS) was established following a Council of Ministers’ decision in 1999. The tasks and duties of the SGS are those of most geological surveys worldwide, and include geological mapping, grass-roots mineral exploration, geohazard

and geoenvironmental studies, hydrogeological studies, earthquake monitoring activities, and services to the community. The SGS maintains support teams of geophysicists,

remote sensors, GIS and database specialists, as well as laboratory and publications arms, that enable it to provide a full range of earth-science information, services and consultation skills to the public and private sectors in the Kingdom. Under the terms of its establishment,

the SGS is able, on a contract basis, to operate abroad and can form partnerships with private companies or with other earth-science agencies.

Mapping out the bedrock of solid partnerships

ter World War II. It wasn’t un-til the 1960s, however, that thecountry began to see tangibleresults from its oil wealth, whichbegan to transform the desertkingdom. Due to a boom in glob-al prices in the 1970s, Saudi

Arabia becameone of the fastest-g r o w i n geconomies in theworld. Throughoutthe eighties, re-duced global con-sumption and the

development of fields in othercountries led the kingdom tolower its production from 10million bpd to 2 million bpd,and to accept a production quo-ta within OPEC.

Since then Saudi oil policyhas been guided by a desire tomaintain market and quotashares, and to act as a moder-

ating force in global supply. Af-ter September 11, the kingdomsent nine million additional bar-rels of oil to the U.S. in orderto counteract market volatility.In 2002, Saudi Arabia height-ened production to compensatefor a fall in Venezuelan pro-duction. In 2003, it boosted out-put to compensate for the lossof Iraqi production, and in 2004,it increased production againto prevent oil prices from es-calating so dramatically that

they would threaten the worldeconomy.

The national petroleum com-pany, Saudi Aramco, producesmore than 95 percent of all Sau-di oil on behalf of the Saudi gov-ernment. Not surprisingly, SaudiAramco is the world’s largestproducer of crude oil and nat-ural gas liquids. It has more than90 onshore and offshore fieldswith 2,200 producing oil wells,as well as eight wholly or par-tially owned and operated oil

refineries. Saudi Arabia also hasthe fourth largest natural gas re-serves in the world. Its 225 tril-lion cubic feet of gas comprisefive percent of the global total.Saudi Aramco has undertaken anew and promising gas initiative.As part of the new gas strategy,the company has signed two ma-jor agreements with internationalcompanies in the last few yearsto develop the country’s non-associated gas resources in threeseparate areas in the country.

■ IN 2004, Saudi Arabia earnedabout $115 billion in net oil ex-port revenue. The country hasmore than a quarter of theworld’s total proven reserves,over 264 billion barrels, and isalso the largest producer and ex-porter on the plan-et. Currentlyproducing some11 million barrelsa day (bpd), ornearly 15 percentof the global total,Saudi Arabia isundoubtedly the world heavy-weight in the global black goldindustry, and its economic well-being over the last 40 years hasbeen closely tied to fluctuationsin world petroleum prices.

The country’s first oil dis-covery was made in the early1930s by U.S. geologists, andlarge-scale production began af-

As the world’s greatest oil producer,Saudi Arabia has always played animportant role in the world economyand in global oil collaborations

As the kingdom’s leading company in itsfield, Petrolube is capitalizing on their suc-cess and going global

Their vast resources make them a “swing producer”, balancing international supply and demand.

Saudi Arabia is one of the most important members of OPEC.

THE WORLD leader in the black gold market

Saudi Arabia: ruling the oil empirewith a fair and firm hand

The nation iscurrently responsible

for producing 11million barrels a day,nearly 15% of the

world’s total

Gas reserves,still growing■ WITH 225 trillion cubicfeet of natural gas reserves in2002, the kingdom has thefourth largest non-associatedgas reserves in the world, andthey are still growing. Part ofthe government’s gas and oilstrategy includes expandingthe capacity of the gas net-work from three billion to sev-en billion cubic feet. InNovember 2003, Saudi Aram-co signed a $4 billion jointventure with a consortium ledby Royal Dutch Shell and To-tal to develop non-associatedgas resources in the nation’ssoutheast Empty Quarter. InJanuary 2004, Saudi Aramcosigned further agreements withLukoil, Sinopec, and Eni-Rep-sol to explore and develop thenon-associated natural gas re-sources of the massive Ghawarfield area, also in the EmptyQuarter.

Expanding oilproduction■ WITH one-quarter of theworld's proven oil reservesand some of the lowest pro-duction costs, Saudi Arabia’sposition as the world’s largestnet oil exporter is not likely tochange in the foreseeable fu-ture. The International Ener-gy Agency reported thatcurrent production levels can-not only be sustained but canbe expanded to 18 million bar-rels per day by 2030. AlthoughSaudi Arabia has more than 90fields, most of its oil is pro-duced at eight main areas, in-cluding Ghawar, the world’slargest oil field. With estimat-ed reserves of 70 billion bar-rels, Ghawar alone accountsfor about half of Saudi Arabia’scurrent total production.

IN BRIEF

PETROLEUM-RELATED industry expands

Lubricant sector provesimmensely lucrative

SALEM H. SHAHEENPresident and CEO

of Saudi Arabian LubricatingOil Company (Petromin Oils)




■ BASIC geological mappingof Saudi Arabia began in themid-60s. In 1999, this and allother tasks related to geophys-ical studies and explorationwere given to the Saudi Geo-logical Survey (SGS). Today,this organization’s activities in-clude, in addition to geologicalmapping, grass-roots mineralexploration, geo-hazard andgeo-environmental studies, hy-dro-geological studies, earth-quake monitoring activities, andmarine geology studies.

The organization relies onthe latest technology to ac-complish its work, and isequipped with modern labora-tories, computerized geo-graphic information systems(GIS) and remote sensors. Ac-cording to Mohammed Tawfq,the organization’s president,80 percent of work is alreadydigitalized. Cooperation withsimilar agencies worldwide isvital to the organization’s work,and it currently has technicalagreements with similar bod-ies in the U.S., France, U.K.,South Africa and Germany,with which it exchanges in-formation and expertise. Pro-jections for the end of 2005included going fully electron-ic and completing the digitalmapping of the country as wellas a national database on wa-ter resources and geographicalfeatures.

One of the organization’smain areas of operation is min-eral exploration. The countryis rich in mineral deposits, rang-ing from gold to lightweightaggregate, and the SGS as-sesses and develops each newsite using modern methods andtechnology. An important as-pect of this work is to conductpre-feasibility studies on theextraction possibilities for suchdeposits, with the aim of en-

couraging investment in theSaudi mining sector.

The organization has creat-ed a marine geology division,which surveys shorelines look-ing for water intrusion, erosionactivities and the effects of in-dustrial cities on the Red Seaenvironment. More than 50 per-cent of the population of Sau-di Arabia lives within 100 kmof the Saudi coastline. Alsoalong the coast lie the desali-nation plants that supply mostof the country’s drinking wa-ter. In Makkah, where 95 per-

cent of the water is producedby desalination, studies havebeen carried out on potentialwater shortages given the largeinflux of pilgrims each year.“According to Unesco, the fi-nal report from our Makkahwater strategic studies is one ofthe best reports on the watersector,” says Dr. Tawfq.

Under the terms of its estab-lishment, the SGS provides ad-visory and consulting services,analytic facilities, and a rangeof products for clients in gov-ernment, industry and the pub-lic. It also provides a series oftechnical support services infive main areas: environmentand hazards, minerals, map-ping and surveys, laboratoryand logistical services, and pub-lications and library services.

Under Dr. Tawfq’s presi-dency, the SGS has witnessedrapid growth, and is now usingan updated organizational struc-ture headed by the Ministry ofPetroleum and Mineral Re-sources. Although the SGS isgovernment-run, it can oper-ate abroad on a contract basisand can enter into partnershipswith private companies.

DR. MOHAMMED A.TAWFQ

President of SaudiGeological Survey (SGS)

SAUDI GEOLOGICAL SURVEY

Cutting edge organization mines a rich source of profits

THE SEARCH FOR OIL

Increasing global demand for oil turnsto Argas, a leader in exploration

Exploring new areas: in 2005 the Saudi Geological Survey(SGS) completed the geological mapping of the country.

■ CELEBRATING its 40th anniversary thisyear, the Arabian Geophysical and SurveyingCompany (Argas) specializes in the study andexploration of natural resources using state-of-the-art geophysical methods. Likewise theyuse sophisticated types of surveying such as ge-odesy and topography, aerial magnetics andradiometry, and digital map-ping for civil and military pur-poses. Argas was establishedin 1966 as a partnership be-tween the Saudi companyPetromin and the French Com-pagnie Générale de Géo-physique (CGG), and is amajor player in the kingdom’ssearch for new oil and gasfields.

Although the company’smain client is the Saudi oil gi-ant Aramco, Argas has carriedout tens of thousands of pro-jects for different ministriesand governmental departmentssince its inception. It is cur-rently involved in several large-scale projects for Aramco, andhas been contracted to participate in the coun-try’s promising new gas initiative.

“Since I started managing Argas twelveyears ago, we have grown from a staff of 300people to 1800 people, and we have managedto position Argas in the top 100 companies inSaudi Arabia for the past four consecutiveyears,” comments Managing Director HabibMerghelani. “On top of that, we have activelyrecruited Saudi nationals and they now make

up 42 percent of our employees. When I firstarrived, there were only five Saudi nationalsworking here. Now there are 760, and my ul-timate goal is to have a crew that is fully op-erated from A to Z by Saudi nationals.”

Argas’ field crews, which can number up to500 people, work around-the-clock 365 days

a year in seismic pre-survey-ing and two- and three-di-mensional profiling. Thecompany invests heavily intechnical training, and all staffis provided with a two-yearprogram in order to ensure thehighest quality of work. Argas’safety record is also the bestin the business. “We take careof our people,” states Mr.Merghelani. “With one of ourworking groups, we haveachieved six million hourswithout any lost time for in-juries. Our safety recordspeaks for itself.”

With global demand for oilnot showing any signs of slow-ing, and Aramco pushing for

new gas exploration, Mr. Merghelani believesthat Argas will continue to grow, and regionalexpansion will play a part in this. “Today theworld wants oil so we will concentrate on Aram-co and the oil sector, but we are not going toforego any chance to gain in gas as well. Ar-gas will also expand within the Gulf region.We want to use the know-how that we havegained through our partnership with CGGthroughout the Gulf States.”

HABIB MUZAFFARMERGHELANI

Managing Director ofArabian Geophysical and

Surveying Co. (Argas)

■ LEADING suppliers of spe-cialized technical services andproducts to the oil, gas and petro-chemical industries, Rawabi Hold-ing is one of the fastest growingcompanies in Saudi Arabia. Oneof the main industrial players inthe region, the Rawabi group en-compasses activities in construc-tion and engineering, oil and gas,petrochemicals, utilities, powerand electricity, telecommunica-tions and IT, freight forwarding,marine operations, trading andmanufacturing.

Rawabi’s flagship company,Rawabi Trading and Contract-ing (RTC), was established in1980 and is the exclusive providerof a range of industrial productsto numerous international busi-nesses, including U.S. compa-nies Petrotech, Varco, GE Betz,3M, Kemp and Messina. RTC’smain product line includes chem-icals, lubricants, electrical ca-bles, and mechanical and controlequipment for oil and gas pro-duction and processing. RTC al-so provides maintenance servicesfor rigs and petrochemical plants,and through its contracting armis involved in various joint ven-tures that provide drilling, pipeinspection, mud engineering,tubular casing, wire line/slickline, heat treatment and other oiland gas industry services.

Other companies in the groupinclude Rawabi Frank’s, a jointventure operating in the king-dom since 1993, and ranked asthe largest oil service hammer

operation in the world. Rawabi’sEssar provides oil drilling ser-vices and exploration support aswell as platform modificationand submarine pipe laying. Es-sar owns and operates a fleet ofonshore drilling rigs and has con-tracts in Saudi Arabia, Qatar,Oman, the Philippines and In-donesia. Rawabi Emec providesmud engineering services in

Libya, Egypt, Qatar and Syria inaddition to its operations at home.

Rawabi Holding’s non-oil andgas companies are involved in avariety of activities including in-dustrial and specialty contracting,manufacturing, technology, safe-ty and environmental services,and cargo and logistics. RemalElectric Factory produces elec-tronic panel boards and compactsubstations, for instance, whileRemal Telecom manufacturesshelters for the telecommunica-

tions and power generation in-dustries. Rawabi United Tele-com provides wireless solutions,and Rawabi United Safety Ser-vices, a joint venture with Cana-da’s United Safety, provides gassafety equipment and technicalservices.

Rawabi’s core business, how-ever, is likely to remain in oiland gas, where the company hasover 30 years of experience inSaudi Arabia’s eastern province.Moreover, while high global oildemand continues to bolster thebooming economy, Saudi Arabiais the place to be. According toSheikh Abdul Aziz Al Turki, pres-ident of Rawabi Holding, says thecountry’s industrial sector is setto take off and the easternprovince will not only be the en-ergy capital of the world but al-so its industrial heart. “SaudiArabia is planning a huge in-vestment of $620 billion in thenext few years. This is not justin the oil and gas sectors but inthe entire infrastructure of thecountry- in ports, in industrialcities, in petrochemicals, and wa-ter and electricity,” he states.

Rawabi is looking forward totaking advantage of these newopportunities. For Americancompanies looking to move in-to Saudi Arabia, finding the rightpartner is a smart first move,says Sheikh Al Turki. Rawabi’sextensive experience as well asits long tradition of formingstrategic partnerships makes it agood choice. “You need a com-pany like Rawabi Holding be-cause we know the ins and theouts of the arena. It adds valuefor the company to work withus,” he comments.

While their core business is the oil and gassector, Rawabi Holding is also the distributorfor more that 40 international companies

A DIVERSIFIED ENTERPRISE with further plans for expansion

Rawabi Holding: skilled andextremely fast growing

ABDUL AZIZ A. AL TURKIPresident

Rawabi Holding Company




Saudi Arabia invested over$725 billion in infrastructureprojects between 1970 and2003, and is planning to in-vest a further $600 billion intotal over the next two decades.In construction, the large num-

ber of build-oper-ate-transfer projectson offer by the gov-ernment continuesto draw interna-tional contractingfirms who formjoint ventures withlocal partners.

American companies with apresence in the Saudi marketfor construction services orbuilding products includeBechtel, Chicago Bridge and

Iron Company, Black andDecker, Sherwin Williams,ACE and True Value.

Boeing and United Technolo-gies have invested in the con-struction of the kingdom’s firstprivate higher learning institu-tion, the Dar Al Faisal Universi-ty, and the number of U.S.companies involved in similarventures is on the rise, reflectingthe global optimism in the coun-try’s economy. “Saudi Arabia’sboom in real estate and con-

struction indicates full confidencein the economic and political sit-uation,” says Sheikh Abdurah-man Al-Jeraisy, Chairman of theRiyadh Chamber of Commerceand Industry.

Riyadh is expected to morethan double in size over the next20 years as an increasingly ur-ban and fast-growing populationcontinues to exert pressure onthe infrastructure of the majorcities and towns in the kingdom.It is estimated that 1.5 million ad-

ditional housing units will beneeded in the capital by 2022, andthe trend towards large private de-velopments presents additionalopportunities for interested in-vestors. Moreover, the 2006 bud-get has earmarked $2.4 billion fornew municipal projects.

Also contributing to the risein private investment in infra-structure is the government’s on-going privatization process, nowin full steam. Three new rail pro-jects were offered in tender to theprivate sector in 2004, whilemanagement and operation ofthe country’s 24 domestic air-ports and three international air-ports are next up, according tothe government.

The privatization of SaudiArabian Airlines is approach-ing its final stages and theSaudi aviation sector has beenopen to private enterprises fordomestic flights since June of2003. Not to be left out, thePorts Authority has assignedseveral projects to the privatesector to expedite the han-dling of goods and maritimeservices at the kingdom’seight ports, which representthe largest seaport network inthe Middle East. Additional-ly, more than $8 billion in wa-ter desalination and electricityprojects have been offered tothe private sector in the lasttwo years.

■ INFRASTRUCTURE, and inparticular, transport in the King-dom of Saudi Arabia, is set tobenefit from a double boost. Thegovernment has tagged its sur-plus from higher oil prices forhealth, education and infra-structure develop-ment. At the sametime, it has said thatdiversification of itseconomy, a main fo-cus, will be concen-trated in threesectors: energy, in-formation technolo-gy and transportation. A stareconomic performance in 2005has left the budgetary coffersbrimming over for the next fis-cal year, and the 2006 budgetearmarks $33.6 billion for cap-ital projects, focusing on capi-tal expenditures that willenhance economic growth andjob creation, as well as buildingin rural areas.

In line with the country’s fo-cus on education and healthcare,more than 2,500 new schoolswill be built in addition to the3,000-plus already under con-struction. There are also plansto construct 440 primary carecenters, and to add 24 new hos-pitals to the 89 which are cur-rently being built. Publichousing, water, sewerage anddesalination projects are all al-located substantial sums, as aretransportation and communica-tions.

New projects to the tune of$2.5 billion are planned for ports,airports, railroad developmentand for the construction of 3,500miles of roads, in addition to the7,500 miles now under con-struction. The industrial cities ofJubail and Yanbu will be ex-panded under the $3.5 billionallocated for infrastructure de-velopment, which includes newwater, wastewater and desali-nation projects.

■ SAUDI Arabia Public Trans-port Company (Saptco), wasestablished in 1979 to offer pub-lic bus transport throughout theSaudi Kingdom. It offersaround-the-clock terminals inthe country’s major cities andhas an extensive network of lo-cal and international agents.The Saptco fleet is comprisedof more than 2,700 buses thatrun 623 daily scheduled tripsnationwide connecting 359cities, towns and villagesthroughout the country, and op-erate daily international routes

to Kuwait, Bahrain, Qatar,UAE, Yemen, Egypt, Jordan,Syria and Sudan. Saptco’s in-tra-city arm oversees munici-pal services in ten major citiesin Saudi Arabia, as well as trans-portation to the Holy Shrinesduring Hajj and Umrah.

As the leading bus transportcompany in the Arab world,Saptco transported nearly 32million passengers in 2005. At-tracted by the lower costs ofbus transport, as well as im-provements in the sector’s ser-vices and the ever greaternumber of routes on offer, cus-tomers are increasingly choos-ing this means of transport tocross the vast distances thatSaudi Arabia encompasses.

Saptco’s VIP service, orig-inally launched as a non-stoproute between Riyadh and AlKhobar, uses luxury buses run-ning between hotels and offersa meal served en route. TheMercedes buses have 22leather-upholstered seatsarranged around tables, and arepopular with Saudi families andWestern expatriates. The Jetlinkservice has recently been start-ed up between Dammam andthe new King Fahd RegionalAirport.

“Our customers prefer ourservice because we care aboutsafety and time,” says Saptcochairman and Deputy Ministerof Transport for Roads Abdul-lah Al-Mogbel. “We feel thatcomfort and safety are vital toour passengers, so we have a

Surpluses in capital and global optimismset the stage for construction ventures

Above: New factories, schools, hospitals, clinics and housingprojects are part of the new construction plans. Left: The Railway Expansion Program will add 2200 miles of new tracks.

INFRASTRUCTURE The nation’s economic confidence and increase in population transform skyline

Real estate and infrastructuresectors experience a great boom

It is estimatedthat 1.5 million

additionalhousing unitswill be neededin the capital

by 2022

Updating therail system■ SAUDI Arabia is the onlycountry in the Arabian Penin-sula with a railway. A plan isunderway to extend the railsystem and link the mining re-gions to the processing facil-ities and exporting ports. The‘Landbridge’ will link SaudiArabia’s east and west coastsby rail for the first time, pass-ing through Jubail industrialcity and Riyadh dry port, toJeddah Islamic port on the RedSea. Masterminded by the Sau-di Railways Organization, the600-mile railroad link, withan estimated cost of $2.5 bil-lion, will reduce transit timefrom the current seven days bysea to less than 48 hours bytrain. The government alsohopes to privatize the SaudiRailways Organization.

Investing in education■ THERE are eight publicuniversities in the kingdom,and more than 100 collegesand 5,000 schools. A2002 re-port from the Department ofStatistics found that 93.2 per-cent of women and 89.2 per-cent of men in the country areliterate. Five million studentsare enrolled in the educationsystem, which boasts one ofthe lowest student-teacher ra-tios in the world. Female stu-dents make up 50 percent ofthe student body in all levelsof the education system. Al-though 25 percent of the statebudget is normally dedicatedto education, recent surpluseswill be spent in the sector aswell. For 2006, the govern-ment has allocated $23 billionfor education, an increase of$4.7 billion over the previousyear to build new schools, uni-versities, technical collegesand vocational training centers.

Airportupgrades■ THE King Abdul Aziz In-ternational Airport in Jeddah,a main gateway for Muslimpilgrims, is benefiting from a$1.5 billion expansion that willincrease its annual capacityfrom its current 13 million to21 million passengers by 2010.The contract was awarded tothe U.S. company Bechtel ina joint venture with the localcompany Dar Al-Riyadh. Theexpansion will also allow theairport to accommodate thenew double-decker Airbus380. The Airbus has a capac-ity for 555 passengers in athree-class configuration, orup to 800 passengers in a sin-gle-class configuration. Theproject includes the construc-tion of two new terminals, theextension of an existing ter-minal, and the building of anew 25-gate concourse.

IN BRIEF

THE RAILWAY EXPANSION PROGRAM

TRAVEL Luxury bus transportation in the kingdom reinvents the sector

Saptco’s extensive services: the wheel dealsatellite system to track our en-tire operational network, as wellas a black box.”

Originally founded to pro-vide urban transport in thecountry, Saptco was managedby American firms ATE andDMJM for the first five years.Now undergoing restructuring,business activity has been di-vided into four main units: Ha-jj and Umrah, urban, intercity,and contractual transport. Hop-ing to enter a joint ventureagreement with an internation-

al firm, Saptco sees it as a pos-sibility to grow. “We are opento working with other compa-nies. We could learn from eachother and share valuable knowl-edge and experience,” says Mr.Al-Mogbel. In order to furtherdevelop its capabilities the com-pany is also considering fullprivatization. While it is cur-rently 85 percent privatelyowned, the remaining 15 per-cent belongs to the government.

With a massive fleet and hundreds of trips daily, it’s no surprisethat Saptco is the transport company of choice in the Middle East

SAPTCO busses offer food and beverage services as well asoutlets for mobile phones and laptops.

Continued on page 16

ABDULLAH AL-MOGBELCEO of Saptco &

Deputy Minister forTransport and Roads




SHIPPING AND TRANSPORT Making the most out of a strategic location which links east and west

NSCSA’s profits on the rise, hit $117 million

■ ONE of the leading Gulf trans-porters of crude oil and petro-chemicals, the NationalShipping Company of SaudiArabia (NSCSA) has a strategicplan to double its number of ves-sels by 2010, matching SaudiArabia’s oil production and ex-port growth, and to become amajor global player. With over25 years experience in the ship-ping industry and three mainshipping lines: oil, petrochem-icals and RoRo (Roll-on Roll-off, or conventional carriage),NSCSA is gearing up to be notonly the first name in shippingin Saudi Arabia’s growing econ-omy, but also throughout theGulf and beyond.

“We have been looking intothe strategic plan for the lastcouple of years, as the compa-ny has been planning its growth

objectives in parallel with thegrowth in the hydrocarbon re-sources of the kingdom,” saysKhalil Al Gannas, NSCSApres-ident, who adds that the com-pany’s ambitions definitelyexceed the Gulf area. “Our re-sources have been aligned withthe possible demand of SaudiArabia and the GCC (Gulf Co-operation Council) countries.By taking this into account, weaim to be a major transport agentfor the international markets aswell as a strategic transport con-tributor for the whole world.”

Last year was an importantone for NSCSA. The companyfinalized its strategic four-yearplan (2006-2010) with the helpof New York consultants, Mc-Quilling Services, which in-cluded a management andbusiness restructuring as well

as a fleet expansion. Further-more, NSCSA saw its 2005profits rise by 34 percent to SR438 million ($117 million), andmade its first major acquisitionoutside of the Gulf area with the$50 million purchase of 30.3percent of Petredec. A Bermu-da-based liquefied petroleumgas company, Petredec has acontrolled fleet of 53 vessels de-livered and on order, including

two VLGCs (Very Large GasCarriers). The acquisition rep-resents NSCSA’s first venture in-to the gas shipping business andreflects a diversification processthat began in 1979 when thecompany started up operationswith just two RoRo vessels.

NSCSAdiversified into petro-chemical transportation in 1985and continued to intensify its ef-forts in this sector throughout the

eighties and the early part of thenineties as the kingdom’s petro-chemical industry and exportsexpanded rapidly. In 1996, NSC-SAbegan transporting crude oil,and the following year it estab-lished its own ship managementcompany in Dubai, and a con-tainer services yard at Jeddah Is-lamic port. In 2002, NSCSAentered the global freight for-warding and NVOCC (Non-Ves-sel Operating Common Carrier)business and began providingcustomers with a comprehensivelogistical and distribution net-work that includes packaging,warehousing, land and sea trans-port, documentation and customsclearance.

Originally established as ajoint stock company, todayNSCSA is publicly traded onthe Saudi stock exchange. Themajority of its shares are pri-vately owned, with 28.2 percentowned by the Saudi government.NSCSA has a paid up capital of$533 million, and a fleet com-prised of 11 crude carriers, whichincludes two new buildings onorder, 22 petrochemical tankers,ten of which are under con-struction, and 4 multi-purposeRoRo vessels. Oil and petro-chemical transport generate 80percent of the company’s rev-enues, and it provides servicesfor some of the biggest namesin the business, including Sau-di Aramco, Chevron, Shell, andExxonMobil.

“We consider ourselves Sau-di Arabia’s flagship carrier whenit comes to RoRo, and with oiland petrochemicals, we are aninternational organization,” com-ments Mr. Al Gannas. He adds,“Generally our ships are the bestdesigned in the market, built tothe latest specifications, and thiscoupled with our ship operationsand management, as well as ourgood customer relations, makesus fully competitive.”

As Saudi Arabia’s premiere shipping company,NSCSA is capitalizing on their success andmanagement to expand abroad

The plan for 2010 includes expanding the fleet in oil, petrochemical and normal shipping services due to its extremely rapid growth.

KHALIL AL GANNASPresident NSCSA

“We are reorganizing and be-coming more business-ori-ented,” says Mr. Al-Mogbel.“We are cutting losses in somesectors, and raising net prof-its in others. Now we are go-ing to the customers, insteadof waiting for them to cometo us. We are expanding. Even-tually, I would like to see Sapt-co taking passengers all theway from Riyadh to Paris, ei-ther on its own or through analliance. I would also like tosee people booking their Sapt-co reservations from Europebefore they begin their trip toSaudi Arabia.”

It is definitely a possibil-ity. Saptco has a modernfleet, as over 90 percent ofthe buses are less than fouryears old. They provide re-frigerators, advanced enter-tainment systems, restroomsand kitchens on all long dis-tance buses, and offer a rangeof models for a myriad oftransport needs, such asschool transport, charters,urban transport, long dis-tance travel, commuting andshuttles. All models are ful-ly air-conditioned and offerthe highest levels of qualityand comfort.

The Mercedes VIP bussesare equipped with 22 seatswith coffee tables.


Saptco’sextensiveservices

ABDULLAH S. NOJAIDIChairman NSCSA




■ The year 1945 was extreme-ly important in the history ofSaudi air transport. That year,U.S. President Franklin DelanoRoosevelt met with the Saudifounder and King Abdul Azzizaboard the USS Quincy on theSuez Canal. During that meet-ing, FDR gave Saudi Arabia asingle twin-engine DC-3 air-plane as a gift, which was thecompany’s first aircraft and ledto the inception of Saudi Ara-bian Airlines (SV).

In 2005, SV celebrated its60th birthday and reached arecord-breaking 16 million-pas-senger milestone. The MiddleEast’s largest airline has pulledoff an extensive restructuringin the last few years, upgradingits corporate identity and pol-ishing its image for passengerswho are treated to new airplaneswith new features, and the sametop quality service as always.

In December of 1997, SV re-ceived a new fleet, comprising61 of the most modern aircraftin the world from Boeing andMcDonnell Douglas of the U.S.The purchase, which was thelargest in the history of the air-line industry at that time, con-sisted of five Boeing 747-400s,23 Boeing 777-200s, 29 MD-90s and four MD-11 freighters.By 2001, the airline had re-ceived the last of its order andSV had one of the most mod-ern fleets on the planet.

With some of the top aircraftin the world, SV sought to re-vamp its image. There was abroad management restructur-ing to improve business atti-tude and philosophy as well asperformance quality, and a com-prehensive re-branding aimed atboosting global competitive-ness and contributing to SV’smission of becoming a worldclass airline with a distinctiveSaudi touch. A new logo andcolor scheme have been de-

signed to reflect Saudi Arabia’scultural heritage, and its natur-al colors – hues of gold, dunebeige, turquoise and dark blue,are now incorporated in the air-line’s interior decoration anduniforms.

SV continues to acquire mod-ern aircraft to add to its fleet,with 15 currently on order, asthey set the pace with the mostmodern planes in the business.In December of last year thecompany received its first Em-braer plane and each month af-ter that another aircraft wasdelivered. While these modelsare generally used on domesticand regional routes, the 66-seater aircraft has advanced cab-in design for short-rangeairplanes, including exception-ally wide aisles and high ceil-ings. The cabin’s unique doublebubble cross-section providesmore spacious storage areas un-der the seats and in the largeoverhead bins so carry-on lug-gage can be easily stowed. Sau-di Airlines has renamed theeconomy section as ‘GuestClass’ to express the concept ofArab hospitality. New featuresinclude individual video screensand more ample seating space.

■ SAUDI Arabian Airlines(SV) prides itself on its com-mitment to technology, cus-tomer service and innovation.The airline is continuallystriving to refine its services,and developed a strategy inearly 2000 to advance cus-tomer service options andbuild an e-business platform.Their goal is to improve thecustomer’s experience, re-duce operational costs andimprove the processes relat-ed to reservations, ticketingand check-in. SV’s move to-wards e-services is a wiseone, as it anticipates an in-creasing demand in the cus-tomer services sectors and alimited availability of salesand distribution channels.

Its e-business related pro-jects seek to expand airlinedistribution channels with anemphasis on direct sales andservices. The boom in tech-nology related to the travel in-dustry has helped align theSaudi airlines e-businessroadmap with a specific con-centration on electronic andself-service options.

Online booking is one oftheir initial ventures, which

has proven to be a strong salesand service tool, allowing cus-tomers to book their trips con-veniently from any where inthe world and at any time.The service will include fea-tures to personalize their pro-files such as seat selection,meal preferences and flightinformation. The service wasinitially introduced in Janu-ary of 2003.

The online booking serviceis accompanied by an onlinepayment engine enabling cus-

tomers to book and pay fortheir bookings via a securedpayment gateway using cred-it cards or direct debit facil-ities with one of the leadingbanks in Saudi Arabia.

SV is now also in theprocess of introducing self-ticketing machines in airportsand ticket offices to enablecustomers to print their owntickets. The airline’s e-tick-eting service, a much-await-ed enhancement, will be fullyoperational by 2007.

The company brokemany records lastyear- in profits,overall revenuesand passengernumbers- and 2006looks even morepromising

KHALED A. BEN-BAKRDirector General

Saudi Arabia Airlines

YOUSEF A. ATTIAHVice President

Customer ServicesSaudi Arabia Airlines

TRANSPORT The largest and most reliable airline in the Middle East continues to exceed expectations

Saudi Arabian Airlines’ internal revampingproves a profitable and successful venture

Prior to this, SV had introduced‘Business Class’ for businesstravelers, which offers tailor-made services such as greaterfrequent flyer options and moreexclusive and luxu-rious cabin sur-roundings.

In addition to anextraordinary up-grade of both im-age and facilities,SV is also upgrad-ing services. The airline is nowoffering a wide range of optionsfor travelers with a focus onconvenience, which include areservation and client service

call center, e-booking, e-pay-ment, self-check-in and self tick-eting (See box below).

Economic results of thechanges have been immediate.

Profits doubled be-tween 2002 and2004, reaching a2005 high of $133million. Passengernumbers have risenby an average 1 mil-lion per year through-

out the last few years, andoverall revenues have been in-creasing by $260 million eachyear. Flush with its new prof-itability, SV was able, for the

The recent acquisition of almost 70 new, modern aircraft will help launch SV into the arena with other major global airlines.

A full range of new Internet services makes air travel easier.

INTERNET FEATURES

New services geared towardscustomer convenience

first time in its history, to self-finance the purchase of its newaircraft last year, estimated at atotal cost of $400 million.

Amember of the InternationalAir Transport Association since1967, SV currently employsmore than 24,000 people andhas routes linking 26 citiesacross Saudi Arabia with 56 ofthe world’s major cities. In ad-dition, the airline has 13 cargoroutes, including New York andHouston, transports more than620 million pounds of cargo peryear and its freight services areunrivalled in the Middle East.The airline’s cargo developmentstrategy includes increasing itsdistribution points in the U.S.to include Los Angeles, Chica-go, San Francisco, Atlanta,Charlotte and Orlando, as wellas opening new markets in Chi-na.

SV’s catering division, whichdelivers 10 million meals a yearto SV and another 50 airlines op-erating in the kingdom, has wonmany international awards, in-cluding the International FlightCatering Association’s covetedMercury Prize, in recognition ofspecial meal presentations forthe blind. SV also has its ownflight-training academy, the firstof its kind in the Middle East,with its own technical basemaintenance facilities, whichhave consistently been rankedfourth in the world for size andefficiency by the U.S. FederalAviation Administration. Ef-forts are underway to increasethe profitability of these variousdepartments as part of the air-line’s privatization plan, whichincludes separating the compa-ny into six or seven strategicbusiness units.

Profits doubledbetween

2002 and 2005, reaching

a high of $133 million


Our World

■ SEVEN thousand peopleworked on the National MasterPlan for Tourism in Saudi Ara-bia, an in-depth developmentdocument that aims to create asustainable tourism sector in thekingdom and raise the numberof domestic tourists to 128 mil-lion by 2020. The governmenthopes to create 1.5 million newjobs with the initiative, whilediversifying the kingdom’s rev-enue sources, attracting new for-eign investment, andencouraging Saudi citizens toreinvest their money fromabroad. Approved by the Coun-cil of Ministers in 2004, phase2 of the development initiative

is now underway. It is a leadand recede five-year transitionperiod to be followed by mas-ter planning for 13 regions inphase 3, and implementation ofthose regional plans in the fourthand final phase.

Leading the development planis the Supreme Commission ofTourism (SCT), a governmentagency established in 2000 to“reorganize the industry, createnew investment opportunities,and energize the creation of newsectors,” states SCT general sec-retary Prince Sultan Bin Salman.Under the new master plan, SCTis responsible for reviewing thecountry’s current attractions and

assets in tourism as well as ac-commodation and travel facili-ties. It is also in charge ofdrawing up a new major desti-nation program ands restruc-turing the investment process.According to Prince Sultan, “itwas crucial to createa new investmentmodel for tourism.”

Although tourismmay not be the firstthing that comes tomind when one en-visions Saudi Ara-bia, the fact is thatthe country is already the largesttourist destination in the Mid-dle East, with some seven mil-lion visitors from abroad eachyear, as well as 50 million do-mestic tourists. As the cradle ofIslam, the kingdom is an im-portant destination for Muslim

pilgrims from all over the worldwho converge at the Holy Citiesof Mecca and Medina each year.Saudi Arabia also already hassignificant tourism infrastruc-ture, and nearly two milliontourists from the Gulf region

visit the country’sAsir region in theSarawat Mountainsevery year.

Still, with its as-tonishing diversity oflandscapes and richcultural heritage, thecountry has a great

deal of untapped tourism po-tential. From the majestic dunesof the vast Empty Quarter, whichcontains more sand than anyother place on earth, to the greenand soaring peaks of the Asirregion, and from the dazzlingcoral of the Red Sea reefs to the

crystalline waters of the FarasanIsland archipelago, the kingdomis a treasure trove of beautifuldestinations.

“Saud Arabia is unmatchedin the Arab world in terms of di-versity,” comments Prince Sul-tan, who says that most of thecountry’s assets have not beenwell presented in the past. Med-ina, for example, is just 60 milesaway from one of the most beau-tiful sea towns in the country.The possibilities are many, ac-cording to the Prince, who adds,“Imagine connecting a beautifulvalley of palm trees with volca-noes in a fantastic desert settingwith the Hajaz railway, whichalso goes to Syria and Jordan.All the richness of culture con-nected to these new resorts willbe incredible. Really, I cannotwait for this to happen.”



USEFULWEBSITES

● Saudi Commercial Guidewww.buyusa.gov/saudiarabia/en/130.html● Commercial Office of SaudiArabia in Washington D.C.www.saudicommercialoffice.com/● US-Saudi Arabian Business Councilwww.us-saudi-business.org/ ● Saudi Arabian Monetary Agency www.sama.gov.sa/indexe.htm● U.S. Embassy in Saudi Arabiariyadh.usembassy.gov/● Permanent Mission of Kingdomof Saudi Arabia to the United Nationswww.saudi-un-ny.org/● Royal Embassy of Saudi Arabiain Washington D.C.www.saudiembassy.net/ ● Arabic Newspaperswww.saudia-online.com/arabic_newspapers.htm● Saudi Arabia Government Linkswww.gksoft.com/govt/en/sa.html ● Saudia Onlinewww.saudia-online.com/ ● Saudi Arabia Top 100 Saudi companieswww.arabnews.com/top100/index.asp ● The Country & People of SaudiArabiawww.hejleh.com/countries/saudi.html● Virtual Tour of Saudi Arabiawww.toursaudiarabia.com/ ● The Saudi Arabia Information Resourcewww.toursaudiarabia.com/ ● U. S.-Saudi Arabian Joint ProjectsOperating in the Kingdom of SaudiArabia Industrial Projects www.saudicommercialoffice.com/ap-pendix_xiu.html ● Library of Congress - Country Studylcweb2.loc.gov/frd/cs/satoc.html● Saudi Arabia Press Agencywww.spa.gov.sa/newsar.htm ● TADAWUL – Saudi Stock Marketwww.tadawul.com.sa/wps/portal/.cmd/ChangeLanguage/.l/en ● Saudi Arabia Supreme EconomicCouncilwww.sec.gov.sa/

TRAVEL New plan hopes to attract 128 million visitors by the year 2020

Tapping into the extraordinarytourist potential of Saudi Arabia

From Mecca to Medina, the country offersan extremely diverse tourist package whichwill amaze travelers from all over

Tourists can discover the ancient site of Madain Saleh and its Nabatean Tombs or the breathtaking sea front which lies between Dammam and Al Khobar.

● SHEIKHABDULRAHMAN ALJERAISYChairman Riyadh Chamberof Commerce & Industry

● H.E. ABDULLAH ALMOGBELAl Mogbel Family

● DR. MOHAMMEDSALEH BENTENPresident Saudi Post

● MR. HUSSEIN AL-ATHEL Secretary GeneralRiyadh Chamber ofCommerce & Industry

● MR. USAMAH AL-KURDIHon. Member of the ShuraCouncil & PresidentExecutive Alagat

● MR. OMAR BAHLAIWASecretary GeneralCommittee for InternationalTrade

● MR. ABDULAZIZ K.AL-AYAFSecretary General Eastern Province Chamber of Commerce &Industry

● DRA. HAIFA JAMALAL-LAILDean Effat College

● MR. MOHAMMED AL-ABDULHADIPublic Relations ManagerEastern Province Chamberof Commerce & Industry

● MR. FAHAD A. AL-DOWSARI Secretary of theBoard of Directors, Director Chairman OfficeRiyadh Chamber ofCommerce & Industry

● MR. MANSOUR SH. AL-AJMIMedia & Public RelationsRiyadh Chamber ofCommerce & Industry

● MR. FAHAD A.BAHDAILAHCoordinator for ForeignAffairs Council of SaudiChambers of Commerce & Industry

● MR. SAEED K. AL-ABDULLAH Public RelationsCoordinator EasternProvince Chamber ofCommerce & Industry

● MR. JOHN MCSTAYVice President TamimiGroup

● MR. STUARTSMITH, MR. MICHAELBECKLEY and MRS.CHRISTINE BAILLIESaad Group

● MR. SALMAN, MR.BADER BIN SAEDANOlaya Real State

● DR. ZOHAIR A. NAWABFormer Deputy Minister forMineral Resources, BoardMember MAADEN, SGSand Steering Committee forRailway Expansion

RAISING awareness of fragile undersea ecosystems

Reef protection, chief priority■ CEO of Aal Taher Group, Tarek AbdulhadiTaher, is founder of an environmental organi-zation for the protection of Red Sea marine lifeand coral reefs. Reef Chief aims to increaseawareness of the dangers threatening the frag-ile aquatic system of the Red Sea due to activ-ities such as commercial fishing, coastaldevelopments and urban waste dumping. Theorganization produces documentaries, holdslectures, and participates in educational forumsfor children, students and society in general.

The Red Sea contains some of the world’s mostunique and diverse marine and coastal habitats.The natural coastal resources have supportedhumans for thousands of years, and nourishedthe development of a maritime and trading cul-ture linking Arabia and Africa with Europe andAsia. As one of the most important repositoriesof marine biodiversity in the world, the relativeisolation of the Red Sea has given it an extra-

ordinary range of eco-systems, particularlyamong reef fishes and reef-associated organisms.

The coral reefs of the Red Sea are comprisedof more than 200 species of scleractinian corals.The warm water and absence of fresh waterrunoff provide suitable conditions for coral reefformation close to the coastline. In the north-ern Red Sea, the coast is fringed by an almostcontinuous bank of coral reef, which physical-ly protects the shoreline.

Although many reef areas in the Red Sea arestill in a pristine state, threats are increasingrapidly. Experts refer to coral reefs as the rain-forests of the sea, and without them, our seaswould be virtually empty. To work against theirdestruction, Reef Chief aims to increase aware-ness of these threats through public educationcampaigns with the overall goal of encourag-ing greater understanding, appreciation and ac-tivism through knowledge of the Red Sea.

Each year SaudiArabia has some

7 millionvisitors from

abroad, and 50million domestic

tourists

United Worldwould like to givespecial thanks tothe followingpeople for theirhelp andcollaboration


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