What is your analysis of the significance of Vision 2030 for the economy?
Vision 2030 will bring major changes across the whole economic spectrum, from how businesses will be conducted to how the government will be run, and even to how international investors will look at the country. This shift has concrete and impactful consequences, as we are starting to see a more modern and dynamic economy that is also able to look at the challenges it meets on its way and deal with them. Within this push for modernization, the government is adopting an even-more proactive stance compared to the private sector, while at the same time laying the foundations for a long-term perspective.
What does this mean for family businesses in Saudi Arabia, and where do you see the greatest potential?
Family businesses are faced with unique challenges and need to adapt. Some sectors will no longer exist while others will gain importance. As such, government programs and global trends are the key to remaining profitable and competitive. One of the main programs is the National Industrial Development and Logistics Program (NIDLP), which will allow the country to capture the opportunity and synergies between some of the most important sectors, such as energy mining, industry, and logistics, and tap its potential.
What does this economic transition mean for Alkhorayef and ARASCO?
This atmosphere is helping companies like Alkhorayef and ARASCO to see the future in a more visible way. Alkhorayef is a 62-year-old company; we started in agriculture and moved to other sectors gradually. Our first phase was agriculture, the second was diversification, the third is to focus, and the fourth and current phase consists of looking for investments. That is why we decided to have a separate company for operating businesses, while always trying to look at the business from a family point of view, which is why we are focusing on ARASCO as an investment. We see potential in the tourism, entertainment, healthcare, education, and infrastructure sectors. Our existing businesses are aligned with what is going on in the country's oil, water, energy, and industrial spaces. We are in the right place at the right time; we just need to make sure we are addressing the market in the right way with the right products. ARASCO's growth is due to its ability to address the changing needs of the economy. ARASCO has always worked hard to build a sustainable model for food security with animal feed, its main product, poultry feed, and other food products. For the last four to five years, we have invested about SAR2 billion in different projects in the manufacturing and logistics sectors. The next step will probably be setting up an independent logistics arm; we have great potential in the logistics sector, and with the announcement of NIDLP, we are ready to capture the opportunity and add value across the whole supply-chain.
What role does technology play in maintaining competitiveness?
It is safe to say that Saudis are among the most avid users of all the latest technologies. New laws and regulations—in the spirit of these modern times—are propelling people to automatize more extensively. Cheap labor used to compete with automation, but labor is getting more and more expensive. The clients are always asking for automation, too, and the Saudi government has put in place very encouraging policies to increase investment in new technologies, especially in the manufacturing sector. At Alkhorayef, we are investing heavily in automation and smart business solutions.