Saudi Arabia's Business SENSE by yourDragonXi Δ 4th of January 2014

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~ Construction on a petrochemicals quay in Jubail ~ Saudi Economy's Performance and Prospects for 2008-09 ~ Samba	~ Dell: Strong growth in net users in Saudi Arabia ~ Big oil demand from Asia ~ New Refineries	~ Saudi Arabia needs oil at $54 for budget balancing ~ Middle East ICT spend to surge to $73b in 2008 ~ IT Spending in Saudi Arabia
~ Banking Sector News ~ Advanced Electronics Company ~ ME super-rich assets	~ Pirates ~ sense for Ξ ~ Power Investments	~ sense for Ξ ~ sense for Ξ ~ sense for Ξ
~ sense for Ξ ~ sense for Ξ ~ sense for Ξ	~ sense for Ξ ~ sense for Ξ ~ sense for Ξ	~ sense for Ξ ~ sense for Ξ ~ sense for Ξ
~ sense for Ξ ~ sense for Ξ ~ sense for Ξ	~ sense for Ξ ~ sense for Ξ ~ sense for Ξ	ξ ξ ξ
«Business Sensing	ξ	ξ
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~ Construction on a petrochemicals quay in Jubail

Construction on a petrochemicals quay in Jubail
ξ even international and Saudi companies are expected to submit bids for two contracts
ξ worth more than $1 billion to start construction on a petrochemicals quay in Jubail, Saudi Arabia
ξ the quay at King Fahd Industrial Port is being developed to help cope with the massive amounts of petrochemical products
ξ due to come on stream nearby over the next three years
ξ the companies bidding for the quay's first-phase construction work, with an April 20 deadline, include
ξ China Harbour Engineering Co,
ξ Belgium's Jan de Nul and
ξ the Netherland's Van Oord and Royal Boskalis Westminster
ξ Geneva-registered Archirodon,
ξ Saudi Arabia's Huta and
ξ South Korea's Hyundai Engineering & Construction Co

More than $20 billion is being spent
ξ on expanding capacity in Jubail,
ξ including the production of more than 2 million tonnes a year of

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~ The Saudi Economy: Recent Performance and Prospects for 2008-09

»The Saudi Economy: Recent Performance and Prospects for 2008-09
»Full Report

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~ Samba

»Samba

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~ Dell: Strong growth in net users in Saudi Arabia

Dell: Strong growth in net users in Saudi Arabia
ξ there has been "a tremendous growth " in the number of people logging onto the Internet from Saudi Arabia
ξ according to Michael Dell, chairman and CEO of Dell Inc.
ξ 2,250 per cent of people coming online since the year 2000
ξ Dell addressed a round-table discussion in Riyadh
ξ the world was witnessing the most exciting and promising period for technology ever known, called "Connected Era. "
ξ there are more than one billion people online today
ξ 500,000 people coming online every single day for the first time in their lives
ξ By 2011, another billion are expected to join
ξ Dell Inc. was committed to developing the Kingdom's IT sector
ξ the company's sales in Saudi Arabia, in particular, and the Middle East, in general, were growing faster than any other region in the world
ξ business is moving at 70 per cent in unit terms, which looks to us to be roughly three times the rate of the industry
ξ one of the purposes of his visit to the Kingdom was to assess the situation
ξ and see how the company could improve in the area of corporate social responsibility activities in Saudi Arabia
ξ met with King Saud University
ξ there are many opportunities of collaboration and development of the IT sector and schools
ξ met with the ministry of education
ξ Dell Inc. is very involved in how to fully take advantage of IT in the public education system
ξ later on this year low-cost entry goods for computers that make it very easy for big ministry of education projects
ξ Dell Inc. generated revenues worth $61 billion in 2007
ξ It is strongly interested in developing IT infrastructure in the Kingdom's mega economic cities
ξ met senior officials from the Saudi Arabian General Investment Authority (SAGIA)
ξ discussions on how Saudi Arabia could be a hub for the region for large data centres
ξ and about power intensive industries that Dell Inc. uses in its supply chains
ξ according to a study by Madar Research, online advertisement spending in the Arab region is expected to grow in the next 5 years
ξ that would bring the total online ad value to about $142.08 million by end of 2011
ξ Online advertisement spending among the GCC-Levant countries remains below 1 per cent of the total globally,
ξ although Internet as a veritable marketing medium is building up in several sectors of the region.
ξ The growth rate averaged of more than 50 per cent took place over the past six years.
ξ However, by end of 2006, online ad spending in GCC-Levant raised 54.6 per cent from the previous year that cost $18.71 million.
ξ Marketers saw this development as a promising sign that will push online ad spending to break the 1 percent share in the overall advertising market in the upcoming years.

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~ Big oil demand from Asia

ξ Saudi Arabia's Petroleum and Mineral Resources Minister Ali Al-Naimi
ξ Asian oil consumption projected to increase by 20 million barrels per day by 2030, accounting for 60% growth in world demand
ξ 80% of increase in demand will be met by supplies from the Middle East
ξ Al-Naimi at Seoul National University, where he was awarded an honorary doctorate
ξ Saudi Arabia was carrying out investment projects, worth $90 billion
ξ to boost oil and gas production capacity as well as refining facilities
ξ the short-term oil price gyrations seen in recent years said to be more closely tied to the internal logic of the financial markets than to underlying supply/demand fundamentals
ξ consumer countries have called on OPEC to ramp up production to help ease the sting of high fuel prices
ξ a lack of spare crude output capacity
ξ tight refining capacity
ξ the world economies are more energy efficient than any time in history
ξ proven global oil reserves have risen from 667 billion in 1980 to 1.2 trillion barrels 2008
ξ even though the world has consumed some 700 billion barrels in the interim
ξ financial markets, rather than fundamentals, influencing current oil prices
ξ financial markets have a logic and mechanism of their own
ξ such markets are influenced by ever-changing factors and parameters that transcend markets and boundaries and are often unregulated
ξ the short-term oil prices more closely tied to the internal logic of the financial markets than to underlying supply and demand fundamentals
ξ the rising cost of oil and gas production, refining, and other related infrastructure bottlenecks,
ξ as well as the "rush into costly alternatives such as bio-fuels in some countries" increasing the cost of the marginal barrel worldwide
ξ Saudi Arabia to increase its sustainable production capacity to 12.5 million bpd by end-2009 through a succession of capacity increments
ξ the global economy expanded by 3.2 percent and emerging markets by 4.1 percent annually when oil prices averaged only $17/barrel
ξ at an average crude price of $30/barrel during 2000-2007, the global economy grew by 6.7 percent
ξ to meet its growing oil demand,
ξ Asia will need $150 billion investments in setting up new refineries and upgrading existing ones

The Seoul National University
ξ decided to award Al-Naimi the doctorate because he had served to "promote world peace and common wealth by efficient redistribution of energy"
ξ the minister had been instrumental in stabilizing South Korean oil imports from Saudi Arabia

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~ New Refineries

ξ Saudi Aramco along with Total to construct a 400,000-barrel-per-day refinery in the eastern Saudi city of Jubail on the Gulf coast
ξ to process Arabian Heavy crude oil, with operations expected to commence at the end of 2012
ξ a joint venture for the refinery to be formed in 2008
ξ Saudi Aramco will initially have a 62.5% stake and Total 37.5%
ξ 25% of the company to investors from the Saudi public, with Saudi Aramco and Total each retaining a 37.5%

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~ Saudi Arabia needs oil ONLY at $54 for budget balancing

Saudi Arabia needs oil at $54 for budget balancing
ξ Saudi Arabia needs to earn $54 per barrel of oil in 2008
ξ less than half of the current crude price
ξ to balance its budget
ξ spending to increse 7.1 percent in Saudi Arabia in 2008

The United Arab Emirates
ξ needs to earn $32.40 per barrel

Kuwait
ξ needs $45.70
ξ became the fourth Gulf states to report an inflation rate above 10 percent

Qatar
ξ price-growth of 14.8 percent
ξ spendind will increase 25.6 per cent in Qatar in 2008

UAE
ξ spending will increase 28.9 percent in the U.A.E. in 2008

Gulf states
ξ may post record fiscal surpluses 2008
ξ crude oil increased more than 90 percent in the past 12 months to $127 a barrel June 09,2008

Gulf Cooperation Council (GCC)
ξ includes Saudi Arabia and the UAE
ξ owns about 40 per cent of the world's proven oil reserves
ξ provides the GCC countries with a huge safety net to continue to spend, even if oil prices weaken
ξ as long as oil prices are between $55 and $60 per barrel the expansionary stance of the GCC countries will continue
ξ large budget surpluses make it difficult for Gulf states to curtail spending to help slow inflation,
ξ the six GCC states control as much as $1.5 trillion of assets
ξ through their sovereign wealth funds,
ξ about half the $2.9 trillion global total,
ξ according to the International Monetary Fund
ξ such funds may grow to $12 trillion by 2012

ξ the funds have invested at least $59 billion in the past year
ξ to shore up the balance sheets of Wall Street banks, including Citigroup Inc. and Merrill Lynch & Co.
ξ prompting calls from the U.S. Congress for more openness

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~ Middle East ICT spend to surge to $73b in 2008

ξ the total marketplace for information and communications technology (ICT) in the Middle East is predicted to surge in 2008 to $73 billion
ξ accounting for less than two per cent of the projected global spend exceeding $3.7 trillion
ξ the Middle East ICT spend, driven by mostly Saudi Arabia and the UAE, is poised to rise to more than $95 billion in the next three years
ξ the global marketplace will top $4 trillion by 2011
ξ the Middle East is one of the fastest growing ICT regions in the world
ξ during 2008, purchases of ICT products and services within Europe, the Middle East and Africa (EMEA) to overtake the US
ξ Saudi Arabia the biggest regional investor by spending over $20 billion per year in ICT investment
ξ businesses in the Middle East experiencing five per cent growth
ξ ICT spending in the Asia-Pacific region and the Europe, Africa and the Middle East region will grow annually at 10.5 per cent and 5.0 per cent, respectively

The top 10 ICT spending countries are
ξ the United States,
ξ Japan,
ξ China, <-- China jumps to third place from fifth place in 2006
ξ Germany,
ξ UK,
ξ France,
ξ Italy,
ξ Brazil,
ξ Canada,
ξ Spain

Industries
ξ communications sector $403.6 billion = 11.5%
ξ financial services $334.5 billion = 9.5%

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~ IT Spending in Saudi Arabia

IT Spending in Saudi Arabia

ξ The information technology industry welcomed as an excellent opportunity for their businesses a report that
ξ IT spending in the Gulf region is seen to hit Dh33 billion by end-2008 and Dh44 billion by 2011,
ξ crediting it mainly to the continuous government support of the sector

ξ The UAE is the second-biggest IT market in the region, with a 36 per cent share, after
ξ Saudi Arabia's 43 per cent
ξ Kuwait has a nine per cent share,
ξ Qatar has five per cent,
ξ Bahrain has four per cent and,
ξ Oman, three per cent

ξ BenQ is marketing there networking lifestyle devices
ξ according to IDC the projected revenue for IT spending is a 15 per cent rise from 2007
ξ the hardware market, which comprises 62.1 per cent of the entire industry,
ξ is the main driver of the growth in IT spending across the Gulf Co-operation Council member-states

ξ double-digit growth figures on categories such as laptops in a single household
ξ aside from government support, the industry growth has been attributed by Bakshi to
ξ tax benefits, excellent infrastructure facilities, the huge influx of foreign tourists and
ξ an excellent environment to set up a new business

ξ the GCC countries will account for 23 per cent of the total IT spending in the Middle East and Africa 2008
ξ with revenue exceeding Dh146.8 billion.

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~ Banking Sector News

Banking Sector News in saudi Arabia
ξ Saudi authorities have put 350 billion riyals (USD 93 billion) at disposal of the Saudi banks
ξ to cope with the financial crisis
ξ The Saudi Arabian Monetary Agency (SAMA), the kingdom's central bank,
ξ has earmarked this sum to be at the disposal of the national banks
ξ 200 billion riyals were already accessible for the banks
ξ 150 billion riyals would be made available upon request in the future
ξ the annual economic growth posted a hike by 21 percent 2008 compared to 18 percent 2007
ξ the annual average of liquidity amounted to more than 37 percent
ξ the capital basis of the banking sector rose 31 percent in the past three months
ξ in August alone, profits posted by the local banks grew by more than 40 percent
ξ assets in the banking sectors amounted to 809 billion riyals (USD 216 billion)
ξ the Saudi banks' loans amounted to 945 billion locally, and the domestic loans were higher than the assets by 16 percent

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~ Advanced Electronics Company

»Advanced Electronics Company
ξ Saudi Arabia air force as one customer
ξ R&D activities include remote monitoring systems
ξ big U.S. defense companies as partners Military Customers & Partners
ξ US Army CECOM, U.S. Navy, US Air force, Boeing, General Dynamics Land Systems
ξ Smiths Industries, Rockwell International, Lockheed Martin, Raytheon, Hughes, Northrop Grumman
ξ Loral, MOWAG, United Defense (FMC), ITT, Esterline, Thales

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~ ME super-rich assets

ξ wealth is set to double to 3.4 trillion dollars
ξ hedge funds performed well in 2007

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~ P:\DragonXi\PyDragonXi\WebSite\sense\biz\sa\en

ξ pirates tool control of Saudi Aramco's largest crude carrier Sirius Star off the east coast of Africa

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~ Power Investments

Power Investments

ξ Saudi Arabia will need to invest over SAR500bn (US$133bn) over the next ten years to meet rapidly rising power demand
ξ /Saudi Water and Electricity Minister Abdullah al-Hussayen/
ξ the country is the biggest Arab economy
ξ population has ballooned to over 27m
ξ it faces sporadic power cuts in summer when demand for air conditioning surges
ξ there is a need for projects over the next ten years with investments that exceed SAR500bn
ξ power consumption rose by 9 percent in the first half of 2012 from 2011
ξ peak demand in the summer was up 7 percent, or an increase of 3,500 megawatts

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