Private sector growth picks up pace
Firms in a diverse range of industries are embracing the aims of Vision 2030
One of the core ingredients of the kingdom’s long-term strategic development plan is the rapidly-expanding private sector. As His Excellency Mohammed Al-jadaan, Minister of Finance, said at the 2020 Annual Budget launch: “The government continues its steadfast commitment to empowering the private sector’s role in the economy, job creation and diversification of investment under the umbrella of Saudi Vision 2030 objectives.”
The minister reiterated the 22 private sector support initiatives targeting strategic sectors are bearing fruit as underlined by second quarter economic indicators. “We have adopted economic policies that target the growth of non-oil GDP, improving the quality of services for our citizens, and raising the efficiency and effectiveness of government spending, especially social spending.”
Such progress and pledges are music to the ears of firms like Kingdom Holding Company (KHC), a diversified group with interests in hospitality, media, healthcare, aviation, petrochemicals, and real estate, among others. KHC is fully committed to making Vision 2030 a success—both from a commercial perspective and in bringing international best practice and investment opportunities to a wider cross-section of stakeholder interests.
KHC consists of a select team of experienced investment specialists directed by its founder and chairman, Prince Al-waleed bin Talal and CEO, Talal I. Almaiman. In 2019, the company announced ambitious plans to invest more than $1 billion in the national market, with senior executives looking at potential openings in all sectors except finance and real estate, where KHC is already heavily invested. “We truly believe Saudi Arabia is one of the top countries to invest in, and once invested you shall be well rewarded,” Almaiman states. “There is no doubt that Saudi opportunities are huge. We are here to stay; we are a Saudi company that was established in Saudi Arabia, All our senior management team members are Saudi, and we are very proud of that.”
Founded 20 years ago the University of Business and Technology (UBT) is a Jeddah-based private university catering to male and female students seeking undergraduate and graduate programs, With an alumni of 5,800, UBT is famous for its “Education for Job Opportunities” slogan. When it comes to the employability of graduates, UBT is among the national leaders with 78 percent of its graduates employed within six months of graduation.
“Universities can prepare students for the jobs of today, but for the jobs of the future, they have yet to catch up. At UBT, we are focusing on the future,” says UBT CEO, Mohanad A. Dahlan. “Vision 2030 will require many new jobs—jobs not yet available here. Universities have yet to produce qualified individuals that can lead new industries such as robotics, and cyber security.”
Healthcare Sector in Excellent Shape
Established in 1922 as the first pharmacy in Jeddah, Tamer Group is now one of the leading Healthcare Groups in the Kingdom, operating in the fields of pharmaceuticals, manufacturing, logistics services, and the distribution of FMCG and prestige products. To be the partner of choice, Tamer Group has sustained solid partnerships with leading healthcare organization on a local and international level.
“We will continue to strengthen our leadership position through extending market reach, product portfolio enhancements and diver
sification of service offerings,” says Ayman M. Tamer, Chairman and Managing Partner. We support partners in achieving by providing them with an efficient, robust transactional platform, state-of-the-art operational infrastructure, a highly-skilled, professional team and the agility required to adopt customized solutions to run multiple business models”.
Designated by Vision 2030 as “one of the most significant economic sectors” for the kingdom, the social and healthcare industry will receive a staggering $167 billion in cumulative government expenditure in 2020.
Largely publicly financed, the healthcare sector has made major strides in the quality of its infrastructure and service provision, although 90 percent of all medical equipment and devices are imported. Now the largest pharmaceutical market in the region, Saudi Arabia has attracted substantial investment from industry giants like GSK.
A subsidiary of industrial titan Saudi Chemical, AJA Pharmaceutical Industries produces a wide range of pharmaceutical products in various finished dosage forms for different therapeutic classes. “We aim to form collaborations to co-develop, co-manufacture, co-market and widely sell and distribute, carefully selected range of products, as well as licensed products with technology transfer; relying on the huge capabilities, quality and technologies at our own plant,” affirms Mohammed Saud Abader, the successful group’s Managing Director.
The recent 2020 Budget Statement highlighted notable growth in various economic sectors during 2019, with that positive trend forecast to continue into 2020 and beyond. Progress towards the plethora of Vision 2030 goals is gathering speed, and the fusion of multiple strategic objectives for economic diversification with a stable economic framework and pro-business climate bodes very well for the kingdom’s future.
Glitzy shopping malls ensure retailers ring up decent returns
With large, modern and gleaming shopping malls springing up around the kingdom, the Saudi retail sector is forecast to repeat its recent double-digit annual percentage growth which has seen it become a major source of employment with more than 1.5 million workers.
The largest franchise retailer in the region, Alhokair Fashion Retail has more than 1,750 stores that offer the latest designs from over 75 brands. “The Saudi customer is significantly more sophisticated than before. They know exactly what they want.
They have international exposure, and they know the brands, which makes it interesting and more challenging for retailers,” states CEO, Marwan Moukarzel. “The malls here are impressive and better ones are coming. This is a welcome opportunity for retailers like us. We want to shift from being purely a fashion player, to more of a lifestyle player, so will take advantage of the opportunities ahead to transform this company into a lifestyle company.”