Doing Business in Saudi Arabia

Khalid Al-AbdulKarimChief Executive OfficerAl-AbdulKarim Holding Company

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1932 Saudi Arabia became a unified country1930’s Oil discovered - first oil shipment1950’s Major oil fields discovered 1960’s Crude oil facilities expanded 1970’s Major gas projects undertaken1970’s Public infrastructure projects initiated 1970’s Petrochemical expansion begins1980’s Continued infrastructure development2000 Crude Increments, offshore Gas Programs2011 Major petrochemical expansion

Saudi Arabia 80+ Years of Economic Development

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Coming Soon - $625 Billion Expansion

Market Segment US$Physical infrastructure 140 billionPetrochemical Expansion 92 billionElectric Power Generation 91 billionWater Desalination 88 billionTelecom & IT 71 billionTourism & Leisure 54 billionNatural Gas Production 50 billionAgricultural Expansion 28 billion Education & Training 11 billion

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Saudi Infrastructure Market

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Examples of U.S./Saudi Joint Ventures

Local Manufacturer Name Primary ProductsJubail Petrochemicals Polyethylene, EthyleneSaudi Petrochemicals Styrene, Caustic SodaNalco Petroleum, N-Gas, ChemicalsArabian Minerals & Chemicals Bentonite, Barite, Mica, SilicaArabian Gaskets GasketsAmeron Saudi Arabia Concrete Pipes & Fiber Glass Al Olayan Kimberly Clark Consumer Paper ProductsISCOSA Control Panels, Gas Turbines

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SADARADow Chemical / Saudi Aramco Joint Venture

2011 Dow Chemical and Saudi Aramco formally established SADARA which is slated to become one of the largest Integrated Petrochemical complex in the world 6

Current Business Environment

Land of economic opportunityMost favorable “ease of doing business” rating in the region (per World Bank) Currency (Saudi Riyal) tied to the U.S. dollar Stable, pro-business governmentLocal manufacturing incentivesHigh income, conservative population High English language literacy rateLow taxes

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Typical Business Development ModelsDescription

1 U.S. company can open their own subsidiary or local manufacturing in Saudi Arabia with 100% direct investment.

2 U.S. company establishes an agency agreement with a Saudi company. Saudi company sells products on a direct delivery basis (no warehousing). Saudi company provides local warehousing and distribution services

3 Saudi company provides product installation, warranty, maintenance and training services

4 U.S. company and Saudi company enter into a joint venture manufacturing partnership

5 Saudi company provides manufacturing and licensing agreement

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U.S./Saudi Partnership Success FactorsSupply defect-free productsDevelop effective marketing strategies Maintain competitive pricing structuresEstablish reliable supply chainsConsistently meet Saudi Customs requirements Install effective communications, reporting and process control mechanismsResolve customer issues and claims quicklyDevelop long-term business strategiesBe flexible, open and transparent

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About Al-Abdulkarim Holdingsvisit us at www.akh.com.sa

Family owned business with trading experience for generationEvolved into manufacturing and servicesCore competencies

Industrial systems and automationCommunications systemsLaboratory systems, chemicals and servicesIT consultation, enterprise applications, servicesElectrical supplies and power transmission

Local manufacturing and assembly facilities and over 1 MM sq. ft. of warehousing in Saudi Arabia

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About Al-Abdulkarim Holdingsvisit us at www.akh.com.sa

Supply Chain Agreement with Saudi Aramco, SABIC, Power and Water Utilities 36 sales and distribution centers serving customers in Saudi Arabia, Kuwait, Bahrain, Qatar and United Arab EmiratesFrequently recognized as a top-tier supplier and service providerStrong commitment to excellence

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In Summary. . .

Saudi Arabia’s economic development has been strong and steady and will continue to be soSaudi Arabia offers long-term growth opportunities for companies with the right products and servicesAl-Abdulkarim Holdings is available to help U.S. companies market, sell and manufacture their productsAttractive economic incentives are available when products are manufactured in Saudi

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Thank You

Khalid Al-AbdulKarimChief Executive OfficerAl-AbdulKarim Holding Company

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