GDP CENTERS

Saudi Arabia 2014 | INDUSTRY & MINING | VIP INTERVIEW

TBY talks to HH Saud Bin Abdullah Bin Thonayan Al-Saud, Chairman of the Royal Commission for Jubail and Yanbu and Chairman of SABIC, on the contribution the two cities are making to industrial development in the Kingdom.

Jubail and Yanbu are now responsible for 12% of the Kingdom's GDP, two-thirds of its industrial output, and 10% of the world's petrochemical production. The area is perhaps one of the world's best examples of an industrial zone. To what policies do you attribute this success?

The success of Jubail and Yanbu as examples of some of the best industrial zones in the whole world can be attributed to many factors, among which are: unique government commitment and support; the application of state-of-the-art international construction and project management methods; excellent co-operation and integration with our strategic partners, such as SABIC, ARAMCO, and the Ministry of Finance, which ties us together toward one unified objective; the implementation of the city management concept; and the dedication of our professional staff. All the above factors made our mission possible. The mission is to diversify the economic base of Saudi Arabia.

The Saudi economy is projected to continue growing at 5% and, in 2013, the non-oil sector grew at 9%. What growth do you expect at Jubail and Yanbu, especially in exports, since nearly 85% of products manufactured in the two cities are exported?

As stated, we are now responsible for 12% of the Kingdom's GDP. We shall continue to be influenced by changes in the economy and we shall continue to influence this economy through increasing our share in GDP, and I am glad to inform you that we are moving toward a new stage of industrial development through the Yanbu Economic Plan, whereby the emphasis will be on downstream industries, especially non-oil products. This shall include, but not be limited to, iron, services, and manufacturing products.

“Jubail and Yanbu are, no doubt, shrines of industrial development in Saudi Arabia."

The average growth rate in annual FDI at Jubail and Yanbu reached 20.2% in 2013. With infrastructure projects such as transnational rail, a major phosphate mine, and a large port maturing in the next five years, what opportunities do you expect to emerge for domestic and foreign companies in Jubail and Yanbu?

Jubail and Yanbu are, no doubt, shrines of industrial development in Saudi Arabia. They both offer a complete platform of infrastructure and service, second to none, with very competitive land-use prices and excellent links to international markets. Jubail and Yanbu are very safe working environments, in a very stable country. What else could you ask for? This is, to say the least, what brought multinational companies like ExxonMobil and Dow to this land of opportunities. However, with our forthcoming economic plans, we hope to diversify our economic base in the two cities to include investment opportunities, especially in downstream industries. We shall be introducing new opportunities in the field of marine, shipment, packaging, iron, and spare parts, especially for power and desalination.

In late 2013, the government announced $109 billion in alternative energy spending and, recently, Sun Edison signed a deal to undertake a feasibility study for a photovoltaic power plant in Wa'ad al Shamal. As energy demands rise across the nation and the region, how will the Commission fuel the development of alternative energy technologies?

The Royal Commission is working with its strategic partners to meet this growing energy demand in several areas. The first area is optimizing energy consumption by using modern techniques such as district cooling systems and smart buildings. The second is utilizing state-of-the-art technology for industrial waste recycling such as plasma reactors, which produce hydrogen and electricity. The third is building photovoltaic power stations, and the fourth is concentrating on secondary industries, thus utilizing the outcome of primary industries as feedstock.

Employment is one of the major challenges facing the Saudi youth, and when we spoke to Sheikh Saleh Kamel of the Jeddah Chamber of Commerce and Dallah Al Baraka, he cited it among the Chamber's largest concerns. As the Saudi economy diversifies, how will you ensure that Jubail and Yanbu provide as many jobs as possible?

In two months, the Royal Commission for Jubail and Yanbu will be celebrating its 40th anniversary. Over four decades, the two cities have created quality jobs. We have also created a cluster of technical education colleges and institutions. Most of the process operators and lab technicians in the primary industries are our graduates. With every project expansion, and with every business opportunity, new jobs are created. Our concern at this stage is to increase the participation of women in the workforce to ensure better performance output. Moreover, we want achieve an 80% Saudization rate, at least in jobs related to operations and maintenance.

By 2020, Saudi Arabia will have completed many of the megaprojects that it has undertaken. Where do you hope to see Jubail and Yanbu by that time?

We have committed ourselves as per our strategic vision to be the major contributor to the Kingdom's development. This is a dream, and we like to follow our dreams and make them realities. I hope to see Jubail and Yanbu as a leading international example of how to transform a developing country into one of the top industrial nations, but with a human touch, care, and concern for welfare, not only for Saudis, but for the whole international community.

© The Business Year - June 2014