GCC prioritizes economic diversification for sustainable growth, says official /node/2508836/business-economy
GCC prioritizes economic diversification for sustainable growth, says official
During the Gulf Creatives Conference, organized by the Diwan at Harvard University in Cambridge, Massachusetts, Al-Budaiwi outlined a vision that embraces diverse sectoral reforms. SPA
GCC prioritizes economic diversification for sustainable growth, says official
Updated 12 May 2024
ARAB NEWS
RIYADH: The Gulf Cooperation Council aims to reduce reliance on oil revenues by implementing a comprehensive vision for economic diversification, as emphasized by its Secretary-General, Jasem Al-Budaiwi.
During the Gulf Creatives Conference, organized by the Diwan at Harvard University in Cambridge, Massachusetts, Al-Budaiwi outlined a vision that embraces diverse sectoral reforms. These initiatives are aimed at strengthening economic resilience and attracting foreign investments, the Saudi Press Agency reported.
He noted GCC countries have positioned themselves as competitive digital hubs on the global map, supported by their favorable geographic location and young population.
“The strategic location, coupled with robust infrastructure, paves the way for the council member states to attract international partnerships that support their long-term development goals,” Al-Budaiwi said.
He added: “This dynamic approach is vital for sustaining economic growth and ensuring the resilience of Gulf economies in the face of global economic fluctuations and regional challenges.”
Additionally, Al-Budaiwi emphasized the numbers and data supporting these plans and showcased the advancements made by GCC nations, including the establishment of the Customs Union, the GCC Common Market, and the Unified Economic Agreement. He cited Saudi Arabia’s NEOM project as an example of urban development initiatives within GCC nations.
He explained that smart cities are designed to reduce waste, enhance energy efficiency, and streamline urban management by leveraging artificial intelligence and the Internet of Things.
He continued by stating that this further underscores the GCC nations’ commitment to technologically advanced and environmentally friendly urban design, as well as the increased emphasis on cybersecurity to mitigate growing risks and maintain confidence in the digital economy.
Moreover, Al-Budaiwi emphasized the transition from oil-dependent to diversified economies and expressed satisfaction with the outstanding economic and integration achievements of the GCC countries.
In February, he held a series of meetings in Riyadh with foreign ambassadors to Saudi Arabia.
Al-Budaiwi met with the South Korean Ambassador to Saudi Arabia, Choi Byung Hyuk, at the general secretariat headquarters in Riyadh.
During the meeting, the secretary-general discussed the developments in the free trade agreement between the GCC countries and South Korea, which was signed in December 2023.
Both sides expressed their desire to enhance cooperation between nations and increase focus on mutual interests such as education, health, investment, and pharmaceuticals.
The meeting also reviewed relations between the GCC and South Korea, emphasizing the importance of enhancing strategic dialogue through the areas of cooperation outlined in the joint action plan.
PIF has kick started $3.2tn investment plan, but private sector now needed, economy minister says
Updated 7 sec ago
Nadin Hassan
RIYADH: Saudi Arabia is looking to secure SR9 trillion ($2.39 trillion) in investments from the private sector, following a SR3 trillion kick-start from the Public Investment Fund, according to a top official.
Speaking in a fireside chat at the PIF Private Sector 2025 in Riyadh, Saudi Minister of Economy and Planning Faisal Al-Ibrahim set out how the Kingdom’s sovereign wealth fund is playing a catalytic role in igniting private sector participation.
Saudi Arabia has set out an ambitious National Investment Strategy as part of its Vision 2030 economic diversification initiative, and Al-Ibrahim explained how PIF has a “big role” in setting an example for how the government-backed projects can partner with the private sector.
He added: “If you look at infrastructure mode, we expect the total required investment of the next seven to 10 years to be around $1 trillion so PIF can't do this on its own.
“ It will kick start, it will ignite, and it will set the example, set the tone, that will create a private sector that's more dynamic, a stronger partner that can help us achieve this.”
Oil Updates — prices fall as potential Ukraine peace deal may ease supply disruptions
Updated 13 February 2025
Reuters
SINGAPORE: Oil prices fell on Thursday on expectations that a potential peace deal between Ukraine and Russia would end sanctions that have disrupted supply flows, while crude inventories rose in top producer the US.
Brent futures were down 68 cents, or 0.9 percent, at $74.50 a barrel by 8:15 a.m, while US West Texas Intermediate crude dropped 65 cents, or 0.9 percent, to $70.72.
Brent and WTI fell more than 2 percent on Wednesday after US President Donald Trump said Russian President Vladimir Putin and Ukrainian President Volodymyr Zelensky expressed a desire for peace in separate phone calls with him, and Trump ordered top US officials to begin talks on ending the war in Ukraine.
Russia is the world’s third-largest oil producer and sanctions imposed on its crude exports as a result of its invasion of Ukraine nearly three years ago have supported higher prices.
In a note on Thursday, ANZ analysts said oil prices eased on news of the potential peace talks because of “optimism that risks to crude oil supplies would ease,” pointing to the US and EU sanctions that are pushing down Russia’s output.
“Signs of tightening supply have been pushing up oil prices in recent weeks,” they said. “US sanctions on Russian oil companies and vessels are said to have exacerbated the situation.”
A build in crude oil inventories in the US, the world’s biggest crude consumer, also weighed on the market. US crude stocks rose more than expected last week, data from the Energy Information Administration showed on Wednesday.
Crude inventories rose by 4.1 million barrels to 427.9 million barrels in the week ended Feb. 7, the EIA said, beating analysts’ expectations in a Reuters poll for a 3-million-barrel rise.
“This recent downturn in crude oil futures follows a period of consecutive inventory builds,” said Darren Lim, a commodities strategist at Phillip Nova.
“Geopolitical developments, such as proposals to end the conflict in Ukraine, could put crude oil prices under further pressure.”
Trump’s threat of additional tariffs against US trade partners also pressured prices, because of concerns that may reduce economic growth and therefore oil demand.
Trump said he would impose reciprocal tariffs as soon as Wednesday evening on every country that charges duties on US imports, in a move that ratchets up fears of a widening global trade war and threatens to accelerate US inflation.
NUPCO secures $667m in financing to boost Saudi healthcare supply chain
Updated 12 February 2025
Reina Takla Nadin Hassan
RIYADH: Saudi Arabia’s National Unified Procurement Co. has secured three significant financing agreements totaling SR2.5 billion ($666.6 million) to strengthen supply chain financing for healthcare suppliers.
In an interview with Arab News at the PIF Private Sector Forum, NUPCO’s Chief Commercial Officer Khalid Al-Ghamdi said that the agreements were made with prominent financial institutions, including Banque Saudi Fransi, Abu Dhabi First Bank, and Tameed. These partnerships are designed to provide suppliers with better access to capital, enabling them to meet the increasing demand for medical supplies across Saudi Arabia.
The company signed an agreement worth SR500 million with Banque Saudi Fransi to finance the supply chain in health care. “It’s for the suppliers,” Al-Ghamdi said.
Another agreement with Abu Dhabi First Bank is worth SR1 billion to enable “our suppliers to take financing throughout these agreements and making sure that they are really overcoming all the financing challenges that they might have.”
The agreement signed with Tameed is worth SR1 billion to support small and medium enterprises within the healthcare sector.
“Tameed is looking after the SMEs, where we are trying as much as we can to make them enabled and grow within the sector of the healthcare as well,” Al-Ghamdi explained.
NUPCO, formerly dedicated to serving public hospitals, is now expanding its services to the private healthcare sector.
Al-Ghamdi highlighted that the company’s healthcare logistics and digital solutions will now be available to private hospitals, clinics, and small and medium-sized enterprises.
“What we discovered is that, up until the post-COVID period, NUPCO was primarily focused on providing services to the public sector, as that was our main priority and mandate,” he said.
Al-Ghamdi added: “However, we soon realized that the private sector is an integral part of the healthcare ecosystem. The ongoing transformation in healthcare will eventually lead to a shift, with the privatization efforts making even the public sector more aligned with private sector dynamics.”
A central component of this expansion is the introduction of a new digital healthcare marketplace, scheduled to launch by the end of the first quarter of 2025—just one month away.
This innovative platform will enable private clinics and SMEs to purchase medical equipment and supplies seamlessly, while also offering tailored financing solutions. By doing so, it aims to simplify access to advanced medical infrastructure, empowering healthcare providers to enhance their capabilities and improve patient care.
“For example, a small clinic wants to buy a dental chair or a laser machine. They can go through the marketplace and find financing solutions over there, and instead putting their capital in one asset like one chair or one laser machine, they can go for five or six, as much as they can,” Al-Ghamdi stated.
Enhancing Kingdom’s healthcare logistics
The financing agreements are a key element of NUPCO’s comprehensive strategy to bolster the healthcare sector’s logistics and procurement infrastructure. As a wholly owned subsidiary of the Public Investment Fund, NUPCO is at the forefront of driving Vision 2030’s healthcare transformation by optimizing the distribution of medical supplies throughout the Kingdom.
In a significant move to further this mission, NUPCO unveiled five strategic partnerships with global logistics leaders—DHL, SMSA, and UPS—during the PIF Private Sector Forum.
These collaborations are designed to strengthen and expand medical supply distribution networks, ensuring efficient and reliable delivery of critical healthcare resources across Saudi Arabia.
This initiative underscores NUPCO’s commitment to advancing the Kingdom’s healthcare ecosystem and supporting its long-term economic and social goals.
“We are making sure that all of them is alliances that we build our relationship to make sure that we extend the services all the way to their businesses,” said Al-Ghamdi.
Additionally, NUPCO forged a strategic partnership with the Saudi Authority for Industrial Cities and Technology Zones, the Kingdom’s largest operator of industrial cities, to support future logistics expansion and enhance operational capabilities. This collaboration aims to leverage MODON’s extensive infrastructure and expertise to further streamline healthcare logistics.
Furthermore, NUPCO signed an agreement with Monsha’at, Saudi Arabia’s Small and Medium Enterprises General Authority, to integrate SMEs into its supply chain ecosystem.
This initiative is designed to empower smaller businesses by providing them with opportunities to contribute to the healthcare sector, fostering economic growth and aligning with Vision 2030’s goals of diversifying the economy and supporting local enterprises.
Preparing for the future
With Saudi Arabia’s healthcare sector experiencing rapid growth, NUPCO is strategically scaling its logistics network to keep pace with rising demand. The company plays a pivotal role in the Kingdom’s healthcare ecosystem, currently supporting over 300 hospitals and 2,500 clinics.
This extensive reach ensures that 97 percent of Saudi Arabia has access to essential medical supplies and services.
“We are forecasting that between now and 2030, there will be additional more than between 26,000 to 43,000 extra beds that’s going to be in the market,” said Al-Ghamdi, adding that major events such as the World Cup 2034 and Expo 2030 will further drive demand for healthcare services.
As part of its ambitious expansion strategy, NUPCO is investing heavily in advanced logistics infrastructure, including the development of two cutting-edge warehouses slated to become operational by 2026. These state-of-the-art facilities will further enhance the company’s capacity to meet the growing demands of Saudi Arabia’s healthcare sector.
NUPCO’s nationwide distribution network is already a cornerstone of its operations, boasting over 2,600 delivery points and ensuring an impressive 8-hour delivery window for medical supplies within a 100-km radius of its warehouses. This efficiency underscores NUPCO’s commitment to reliability and speed in serving healthcare providers across the Kingdom.
Through its latest strategic agreements and initiatives, NUPCO is solidifying its role as a critical enabler of Saudi Arabia’s healthcare transformation.
By supporting both public and private sector growth, the company is driving the development of a robust, efficient, and cost-effective medical supply distribution system.
Rocco Forte Hotels eyes strategic locations for expansion in Saudi Arabia
Updated 13 February 2025
Reina Takla Nour El-Shaeri
RIYADH: Rocco Forte Hotels is considering expansion into Saudi Arabia, eyeing potential locations along the Red Sea and in Riyadh, according to the company’s executive chairman.
In an interview with Arab News on the sidelines of the third PIF Private Sector Forum in Riyadh on Wednesday, Rocco Forte, who is also the company’s founder, confirmed that while details of the Red Sea project are still under wraps, the firm is actively evaluating opportunities in the Kingdom.
“Obviously, with PIF (Public Investment Fund) investing in us, we completed the deal last January and we’re starting to become active and looking seriously at things here (in Saudi Arabia),” Forte said.
Forte highlighted the company’s partnership with PIF, which began in 2023 and involved the acquisition of a 49 percent stake by the Saudi fund.
The luxury hotel group, renowned for its properties typically ranging from 80 to 120 rooms, is targeting strategic locations in the Kingdom that align with its brand values.
“For example, Diriyah would be an ideal place for us, and then one or two other areas in Riyadh,” Forte said. While the company’s current projects in Saudi Arabia are tied to PIF, he expressed openness to collaborating with private local investors in the future.
“We haven’t been here long enough to start talking to a lot of private investors, but it’s obviously something we’d like to do and explore the possibilities there,” he stated.
Forte emphasized that the investment from PIF has significantly raised the company’s global profile and strengthened its financial position.
“PIF made a large investment in my company, and it was a very high-profile deal, it raised our visibility around the world in a way that wasn’t the case before,” he said.
He also praised PIF’s long-term investment approach, aligning with Rocco Forte Hotels’ family-owned business model.
“Many funds who invest in hotel companies and so on have a very short vision,” he said, “PIF is a different type of investor, and it very much coincides with my vision,” he added.
In addition to its plans in Saudi Arabia, Rocco Forte Hotels is broadening its global footprint, with five new hotels currently under development in Italy, including an upcoming property in Milan scheduled to open in November.
The company is also exploring growth opportunities in Spain, Greece, and the US, driven by robust demand from American travelers.
Forte also noted emerging trends in Saudi Arabia that are shaping the luxury hospitality sector, such as the growing popularity of multi-generational family travel and the increasing convergence of business and leisure trips.
“There’s a lot of business travel where people are either adding a few days at the beginning or end for leisure. That’s very prevalent now,” he observed, underlining that while business travel has not fully returned to pre-pandemic levels, new patterns are emerging.
Reflecting on Saudi Arabia’s tourism transformation, Forte described the scale of development as unprecedented.
“If you’re outside Saudi Arabia, you don’t realize what is going on here,” he said. “Nothing like this has ever been attempted anywhere in the world. They’re developing 20 different destinations, and there’s an energy and dynamism which I think has captivated all the people.”
Ceer supercharges Saudi EV industry with $1.4bn in deals, gearing up for 2026 launch
More than 80% of the agreements involve Saudi companies, reinforcing Ceer’s commitment to its 45% localization target
Ceer’s business plan extends through 2034, with the KAEC plant set to ramp up production in phases
Updated 12 February 2025
Reina Takla Miguel Hadchity
RIYADH: Saudi Arabia’s first homegrown electric vehicle brand, Ceer, signed 11 deals worth SR5.5 billion ($1.4 billion) at a Public Investment Fund event ahead of its model launch in 2026
More than 80 percent of these agreements involve Saudi companies, reinforcing Ceer’s commitment to its 45 percent localization target and advancing the Kingdom’s Vision 2030’s economic diversification goals.
Among the key memorandums of understanding signed at the PIF Private Sector Forum are agreements related to heating and air conditioning, portable EV chargers and various manufacturing aspects, such as plastic injection parts.
In an interview with Arab News on the sidelines of the event, Jim DeLuca, CEO of the company, said: “At Ceer, we say we’re not just starting a car company. We are igniting the automotive industry,” he said.
DeLuca highlighted that Ceer is the only company in Saudi Arabia managing the entire process — from designing and engineering to manufacturing, selling, and servicing a portfolio of battery electric vehicles.
He highlighted the King Abdullah Economic City manufacturing plant, a cutting-edge facility capable of producing 38 jobs per hour with integrated shops for press, body paint, and general assembly. “You can’t have an automotive ecosystem without a local supply base, so we’ve attracted some of the best global tier-one suppliers, they too are joining us in KAEC, and so we’re developing this whole ecosystem.”
DeLuca outlined Ceer’s strategic supply chain approach, explaining how global tier-one suppliers produce key components and subassemblies that will be shipped into the plant on schedule.
“We’re talking about things like front-rear subframes, interiors, front-rear fascias, body components, but that’s only the beginning. Those tier ones need a tier-two supply base, and many of today’s announcements are tier-two suppliers who will provide smaller parts and components to the tier ones, who will then supply to us just in time,” he explained.
Ceer’s localization efforts ensure an efficient, cost-effective supply chain. “This is a capital-intensive, low-margin business, you need a laser-like focus on the strategic elimination of waste,” the top official said.
He added: “One of the ways you do that is by having your supply base right next to the plant. And because we’re in KAEC with Lucid and Hyundai, and hopefully one day others, that’s the type of volume these suppliers need to have a very positive business case.”
Ceer was announced in November 2022. File
Scaling up production and Saudi’s automotive future
Ceer’s business plan extends through 2034, with the KAEC plant set to ramp up production in phases. “In 2024, we started plant construction. In 2025, we will install process equipment — press, body paint, general assembly. Then, at the beginning of 2026, we start validation builds, moving from non-salable to salable.”
DeLuca revealed that by the last quarter of 2026, Ceer will be up and running, producing its first two aspirational vehicles for sale in Saudi Arabia.
The CEO also emphasized the importance of the King Salman Automotive Cluster, which serves as the industry umbrella for KAEC’s expanding automotive sector. Ceer has secured contracts with major tier-one suppliers, including Lear, Forvia, and Shinyoung, as well as Benteler, and JVIS, to localize key vehicle components.
“These are global tier-ones, and we already have contracts with them. They haven’t been formally announced yet, but we’re talking about front-rear subframes, interiors, exterior body components, and sheet metal components — all large, complicated, and expensive to ship, so co-locating with the assembly plants is the right strategy,” he added.
Advancing charging infrastructure and market adoption
Addressing adoption challenges facing the sector, DeLuca pointed to PIF’s EV infrastructure initiative, EVIQ, which is deploying charging stations across major Saudi cities.
“A lot of people have anxiety when considering a battery electric vehicle. What gives them comfort is a strong charging infrastructure. EVIQ is rolling out charging stations in Riyadh, Jeddah, Dammam, and beyond to ensure a seamless transition as we ramp up production,” he said.
Ceer plans to introduce seven vehicle models, spanning the E, D, and C segments, including sedans and SUVs, from 2026 to 2029.
Ceer’s growth strategy and future outlook
Ceer’s assembly complex is designed for an annual capacity of 240,000 units and is fully funded, according to the CEO.
“Our current business plan is fully funded through 2034 between our shareholders and other financial instruments. I think the vision of any company is eventually, potentially to have an IPO (initial public offering) where you can start to monetize all of the great work that has taken place, so I won’t say one day it’s not going to happen,” he added.
He acknowledged that global EV market adoption has been slower than anticipated, emphasizing that product quality, pricing, infrastructure, and incentives will drive Saudi Arabia’s transition. “The Ministry of Investment is working on ecosystem incentives to accelerate EV adoption. We see steady growth in the early days, but incentives will be key to making EVs the catalyst for Saudi Arabia’s automotive transformation.”
Ceer’s agreements and localization drive
According to a press release, agreements were signed at the event with Zamil Central Air Conditioners Co. for heating, ventilation, and air conditioning systems, Zamil Plastic Industrial Co. for plastic injection parts, Obeikan Glass Co. and Abdul Latif Jameel Enterprises for alloy wheels, and the Saudi Co. for Controls and Maintenance for portable EV chargers.
Additional deals include Arabian Plastic Industrial Co. for blow parts, Saudi Aluminum Casting Co. for aluminum casting, First Telecom Industries for small stampings, and CTR for localizing aluminum forged parts in Saudi Arabia.
Ceer has also partnered with 263 local companies, awarding businesses worth SR6.6 billion to firms such as Modern Building Leaders, Nahil Computer, and Bupa Arabia, as well as Atlas Industrial Equipment Co., Saudi Business Machines, and Liva Insurance.
Speaking at the forum, DeLuca underscored Ceer’s role in realizing Vision 2030’s industrial and economic diversification goals. “Over the next decade, we will attract more than $150 million in foreign direct investment, create up to 30,000 direct and indirect jobs, localize 45 percent of our product content or built material and contribute $8 billion directly to Saudi’s GDP by 2034,” he said.
The company’s manufacturing complex, a $1.3 billion facility spanning 1 million sq. meters in King Abdullah Economic City, is poised to become the largest and most technologically advanced automotive production hub in the Middle East and North Africa region.
As part of its expansion strategy, the automotive company is set to welcome six major partners to KAEC, collectively contributing over SR50 billion in value.
DeLuca highlighted Ceer’s commitment to localizing its supply chain, with 45 percent of its product content and built materials to be sourced within the Kingdom.
The company’s workforce has already grown to over 1,300 employees, according to the top official, with a team of global experts bringing extensive experience to drive innovation and competitiveness.
DeLuca emphasized that strategic collaborations with leading automotive players such as Hyundai and Rimac are ensuring Ceer’s electric vehicles are technologically advanced and globally competitive.
One of Ceer’s standout features will be its industry-leading paint shop, offering an extensive color palette with over 30 shades in gloss, matte, and satin finishes, setting a new benchmark in vehicle customization.
“We’re here today at this forum as a testament to the power of collaboration and to highlight the vital role that the private sector plays in achieving all elements of Vision 2030,” DeLuca said.
