Korea, Saudi Arabia bolster ties in construction, clean energy
Korea’s 62-year-old business relationship with Saudi Arabia is expanding beyond the traditional sectors of construction and petrochemicals. Bilateral efforts are now underway to develop new projects in areas such as smart cities, clean energy, and future mobility.
Following President Yoon Suk Yeol’s state visit to Riyadh last October, numerous bilateral deals were struck, elevating the atmosphere for exchanges. These agreements paired Korean firms with technological expertise with urban development projects in the desert country, aiming to enhance local infrastructure and digital platforms for optimal efficiency amid the kingdom’s challenging climate conditions. Notably, NEOM, the world’s largest city development project, serves as a prime example of where these exchanges are unfolding.
Capitalizing on the burgeoning bilateral relationship, a group of Korean entrepreneurs recently inaugurated a new organized body named the Korea-Saudi Arabia Industry and Trade Association (KOSAA). Led by Korea Petroleum Association Chairman Park Joo-sun, KOSAA seeks to bolster the Korean government’s trade initiatives concerning Riyadh.
With congratulatory remarks from Yoon and NEOM’s CEO Meshari Almutairi during its founding ceremony in Seoul on March 5, KOSAA has heightened expectations that Korean companies will encounter more investment opportunities and reap increased benefits. KOSAA intends to send officials to Riyadh in May to sign additional NEOM development deals.
“Before the organization’s launch, we dedicated a year to visiting Riyadh and engaging with local authorities to confirm the sincerity of our commitment,” a KOSAA official said. “CEO Meshari’s greeting at the ceremony reflected Saudi Arabia is betting big on Korean firms and entrepreneurs.”
During Yoon’s recent visit to Riyadh, a remarkable 51 business deals and MOUs were secured, amounting to a total of $15.6 billion. Notably, Hyundai Motor Company inked an agreement with Saudi Arabia’s Public Investment Fund (PIF), under the leadership of Crown Prince Mohammed bin Salman, to invest $400 million in constructing an assembly plant in Saudi Arabia. Additionally, Korea Electric Power Corp, POSCO Holdings, and Lotte Chemical signed agreements with Saudi state-run petroleum and natural gas company Aramco for blue ammonia production projects.
The comprehensive deals follow the crown prince’s high-profile visit to Seoul in November 2022, which prompted the heads of major Korean conglomerates to converge at Lotte Hotel Seoul, where a series of meetings culminated in the signing of trade deals worth $29 billion.
Major Korean firms are actively expanding their presence in Riyadh. Naver, South Korea’s largest online search engine and IT powerhouse, recently exhibited its latest technologies at LEAP 2024 in Riyadh, a global IT exhibition.
Under the concept of a “global tech convergence company,” Naver showcased its generative artificial intelligence (AI) HyperCLOVA X, alongside its cloud computing, robotics, autonomous driving, and digital twin technologies. Additionally, Naver signed an MOU with Aramco Digital to promote digitalization across the Middle East and another MOU with Saudi Public Transport Company to introduce an AI traffic control system.
In overall bilateral trade, Korea’s imports surpass exports. Despite a bilateral trade volume of $38 billion last year, Korea exported $5.3 billion while importing $33 billion. Mineral fuels, mineral oils, and products of their distillation constitute the largest portion of imports, with inorganic and organic chemicals, aluminum, and copper following in smaller volumes.