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Infrastructure as a Driver for Growth

Dr Zuhair Allawi

President Dow Saudi Arabia Co.

Industrial Infrastructure Initiatives: Engines for Economic GrowthUS-Saudi Business Opportunities Forum

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What is Infrastructure?

• Underlying base or foundation of any given system:

• Basic facilities, services, and installations

- In the 80’s , a fundamental change : de-emphasis of manufacturing & Industrial Infrastructure, as the anchor of all advanced economies and the rapid rise of the services sector

- 2008 heralded a paradigm shift in focus back to manufacturing & Industrial Infrastructure

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Knowledge Based Economy

• Hydrocarbon economies have two choices:

• Merely extracting and selling

• Or Invest the returns to build necessary infrastructure to deliver economic growth & diversification.

• Education is a key component of the industrial infrastructural landscape

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Saudi – Quick Facts; government spending 2013

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Budget 2013: Spending by Sector 2009 - 2013

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Value Chain Opportunities- Saudi Arabia’s physical infrastructure has gradually developed to accommodate the growing

private/commercial sector (which accounts for 48 percent of the country’s GDP)

- The KSA government is creating the necessary Industrial Infrastructure through incentives such as:  

• long-term interest-free loans• policy shifts related to enhancing incentives and guarantees to foreign investors• The drive and plans for the development of free trade zones are under government consideration,

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Energy Driven Infrastructure- Competitive Advantage: Energy intensive industries in the Kingdom have flourished

- Attractive Investment Destination: The GCC has an average of five percent of the total production capacity of the world’s top six most energy intensive commodities

- Economic Cities: Supplementing cost advantages, the Saudi Arabia General Investment Authority (SAGIA) has also announced plans to build four economic cities expected to:

• generate USD $150bn of economic output annually; • promote balanced regional development; • create over a million new jobs; • diversify the economy; • and accommodate 4.5 million people.

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Cluster Programs

The National Industrial Clusters Program (NICP) seeks to further focus Saudi Arabia’s efforts at developing sustainable, high-value, export-led industry and growing rewarding, skilled employment opportunities:

• Optimize use of Saudi Arabia's abundant energy, natural resources and raw materials;

• Generate the fastest possible growth in exports; and

• Bring the greatest benefits in terms of technologies and skills development to Saudi Arabia.

• Examples: plastics and packaging; minerals and metals; automotive

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Dow’s Participation in Kingdom

The Dow Model – Partnership for a sustainable future :

– Sadara : A portfolio of Performance Chemicals– SAMCo : Acrylic Acid & Butyl Acrylate– EA Juffali : Styrofoam* & Latex– KAUST :

– Research Programs – R & D Center – KAUST Industrial Collaboration Programs

– RO/Film Membranes Manufacturing facility– PAA / Coatings

ThankYou

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