Attractive Investment
In
Down Stream Business
Saudi Arabia
Presented by:
Ahmed Al-Rajhi
Vice Chairman
Al Rajhi Holding Company
USA April 2010
Advantages and Benefits for the investors in K.S.A ( I )
 Ownership
100% foreign ownership allowed
 Monetary policy
Since 1986 the Saudi Riyal is pegged against the US$ at a rate of SR 3.75
SR to US$ 1.00
No restriction on entry and repatriation of foreign capital & profits
 Funding
The Saudi Industrial Development Funds (SIDF) grants interest free loans
for industrial projects
up to 50% of its total costs including working capital
The loan is repayable in 5-7 years after grace period of 2-3 years
Advantages and Benefits for the investors in K.S.A ( II )
 Tax
Reduction of corporate tax from 45% to 20%
Tax is applicable to the foreign partner, Saudi partners are subject to 2.5% Zakat
on their net worth
No Personal Income Tax
 Duty
Duty exemption on plant & machinery not produced locally
 Law / labor
Excellent law & order situation
No labor unions
Low Manpower cost
Advantages and Benefits for the investors in K.S.A ( III )
 Infrastructure
Excellent road network links all cities within the Kingdom and
Huge investments in the infrastructures taking place in ports and
railways.
Land
Industrial land available at very low rates
 Raw materials
Access to advantageously priced raw materials (e.g. PP, PE)
CONTACT
INFORMATIOM
 Utilities Cost
Excellent infrastructure to supply utilities like water, gas & electricity at very
competitive rates
Electricity
Gas
Water
3.2 cents per kwh
$0.75 per MBTU
$1.60 per m3
Advantages and Benefits for the investors in K.S.A( IV )
 Logistic
costs
Competitive freight rates to local, regional and global markets
CONTACT
INFORMATIOM
Advantages and Benefits for the investors in K.S.A ( V )
 Supply Chain
Central location for participating in strongly growing GCC markets and
supplying goods to Europe,
Asia/Pacific and the Americas
Successful Investments in K.S.A
Example 1:
GPIL
 GPIL Ltd was established in 1989 with low production capacity
(3,000MT/YR) Of BOPP Film and current capacity is (73,000MT/Yr)
 The company is undergoing a major expansion project that will bring
total production capacity to 150,000 MT/year 2013.
 Offering packaging solutions to
customers in the Middle east/Africa,
Europe and the Americas.(more than 35
countries world wide ).
 Representative office in Italy to serve
Europe Customers
GPIL Sales History
250.000
Sale in Million Dollar
200.000
150.000
100.000
50.000
0.000
2001
1
Sale in Million Dollar 12.993
2002
2
2003
3
2004
4
2005
5
2006
6
2007
7
2008
8
2009
9
14.535
16.372
16.931
20.443
22.569
27.718
49.761
64.635
2010
10
2011
11
2012
12
139.812 181.167 220.955
Successful Investments in K.S.A
Example 2:
MATTEX COMPANY
 Mattex was established in 1996 in Dubai and Jeddah and produces
carpet backings, artificial grass backings and geotextiles with a total
production capacity of approx. 400 MM m2.
 The company is represented in the Americas, Europe, Africa/Middle
East and Asia/Pacific.
Mattex Fabrics Sales History
400.0
Sales in Million m2
350.0
300.0
250.0
200.0
150.0
100.0
50.0
Sales in Million m2
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
-
24.4
65.0
82.4
112.7
125.4
133.7
148.1
146.6
154.3
241.0
344.0
363.1
370.7
377.8
Mattex North American Exports
MFJ and MFD
Mattex USA
End customer
History
Business started early 2005 and continues to grow
Products
Primary, Secondary Backing & Woven Geotextiles
Mattex Local
Warehousing
Georgia: Calhoun + Chatsworth; California: Los Angeles;
Employs 6 people in the USA
Containerized Volumes
Figures in
FFE
Origins : Jeddah (KSA) and Dubai (UAE)
Destinations: USA West and East Coast plus
Canada
Year
FFE
2005
2006
2007
2008
2009
*2010
111
186
384
442
391
485
Quantity (M2) Turnover (USD)
* 2010 Figures Are Forecasted
16.70
41.86
63.81
65.14
59.18
67.80
4.84
11.01
19.03
23.54
17.26
20.46
Thank You…