Remarks by Amin H. Nasser, Saudi Aramco President & CEO
As-Salam Alyekom Wa Rahmat Allah Wa Baraktu, and good morning.
Your Excellencies, distinguished guests, ladies and gentlemen, I am delighted to welcome you all to this two-day forum and exhibition.
Thank you for coming from near and far to show your interest in the tremendous business opportunities being unleashed by the historic transformation of Saudi Aramco and the Kingdom.
As you know, we are building a world-class supply chain ecosystem to service Saudi Aramco’s massive and growing needs.
Because an efficient and locally accessible ecosystem increases the reliability of our plants and operations; intensifies the management of our costs by optimizing inventories; and means even greater reliability for our customers around the world.
It will also increasingly service a wider range of industries being created by the Kingdom’s Vision 2030 – from chemicals and automotive to renewables and defense.
Driving that forward is iktva.
We are two years into the program, and tomorrow I will be reflecting on the significant progress we have achieved once again this year.
In short, we have reached a point where our strategic suppliers and partners understand what iktva is; their plans are firmly in place; the challenges they face are being addressed through continuous dialogue; and our joint efforts are now paying real dividends to both sides.
But we have always known that we will not reach our headline iktva target – of 70% oil and gas supply chain localization by 2021 – without an inspiring and involving an ambitious and innovative SME sector.
As the SMEs with us today know very well, you are the rock on which developed nations’ economies, industrial leadership, and competitive advantage is built.
You are also the engine of major innovation for economic growth and development, with your internal environment naturally better suited to creativity and translating it into value.
And you enjoy greater proximity to your customers, greater knowledge of your markets, and far greater agility to create differentiated products that best meet the needs of the oil and gas industry.
All of this gives you a distinct competitive advantage.
Yet, here in the Kingdom, SMEs currently contribute just 20% to our GDP, which is less than half of industrialized economies.
That is why Vision 2030 recognizes the huge potential of SMEs, and has set an initial target of moving their contribution from 20% to 35%.
Obviously, both large industrial enterprises and SMEs have a complementary role to play in getting us there.
And we at Saudi Aramco wanted to show that we are playing our part in promoting SMEs as part of taking iktva to the next level.
That’s why we moved to a bigger venue this year – Dhahran Expo – and added an additional day, dedicated to you: our suppliers’ suppliers.
We want to connect international SMEs with our strategic suppliers and local SMEs to create real business partnerships that support the goals of iktva, as well as deliver a well-earned return on your investments.
We have already identified 140 SME development opportunities, across 10 industrial segments, worth around 60 billion Saudi riyals.
These opportunities include growth within the chemicals conversion parks at Sadara on the Arabian Gulf and PetroRabigh on the Red Sea coast.
And they are expected to help create over 40,000 new jobs, and potentially add around 30 billion riyals to the Kingdom’s annual GDP.
Crucially, as I said when we launched iktva two years ago, Saudi Aramco is expected to spend more than 1 trillion Saudi riyals over the next decade.
That has not changed, and we still want to see 70 percent of those riyals being spent locally.
And we want a large portion of these opportunities to fall to locally-based SMEs who will power us towards our ultimate, shared iktva goals.
That’s the significant value proposition on offer from Saudi Aramco to international SMEs who choose to invest here in the Kingdom.
Of course, multiple Kingdom organizations like SAGIA and local Chambers of Commerce also stand ready to assist you in settling here and calling the Kingdom your second home.
And you only have to look at Vision 2030 to see that support for the SMEs comes from the highest levels in the Government.
But to create a truly thriving SME sector – that offers quality products as well as quantity – the Government recently established an exclusive General Authority for SMEs to enable their aggressive growth.
Their mission is to address concerns, facilitate investments and growth, and make it as easy as possible for SMEs like you to do business here so your full potential can be unleashed.
So please join me in welcoming our two keynote speakers:
- the Vice Governor of Strategy and Partnership at the General Authority for SMEs, Dr. Abdullah Alsagheir;
- and from the Council of Economic Development Affairs, the Director of Local Content and the Private Sector Development Unit, His Excellency Fahad Al-Sukait.