National Industrial Clusters Development Program

Transcription

1 Ministry of Commerce & Industry National Industrial Clusters Development Program Shining Perspectives for Solar Industry in Saudi Arabia Solar Energy in the MENA Region Erfurt October 7, 2009

2 Presentation Outline Saudi Arabia Economy Comparative advantages of Saudi Arabia Introduction to the Solar Cluster 2 NICDP - National Industrial Clusters Development Program

3 Saudi Arabia Economy A growing country Population in millions Population growth % Real GDP CAGR % GDP per Capita 2008 $18,774 Real domestic demand growth 8.0% Source: Central Department of Statistics & Information, MEP/macroeconomic calculations; SAMA -45th Annual Report, & 4 th Quarterly Statistical Bulletin -2008; and Ministry of Finance budget statement. 3 NICDP - National Industrial Clusters Development Program

4 Saudi Arabia Economy A trading country Petroleum the leading export commodity of Saudi Arabia Major exports 2008 Leading markets 2008 Petroleum Chemicals Plastics $34.9 B $71.6 B $39.2 B $63.8 B US Japan China South Korea Source: Saudi Arabian Monetary Agency, Forty Fourth Annual Report. 4 NICDP - National Industrial Clusters Development Program

5 Saudi Arabia Economy A trading country Germany is one of the leading providers of manufacturing goods to Saudi Arabia Major Imports 2008 Major Suppliers 2008 Machinery & Transport Equip. Foodstuffs Chemical & Metal products US China Japan Germany $ 15.8 billion $ 11.2 billion $ 9.4 billion $ 8.5 billion Source: Saudi Arabian Monetary Agency, Forty Fifth Annual Report. 5 NICDP - National Industrial Clusters Development Program

6 Saudi Arabia Economy World Class Infrastructure Railway Projects The Saudi Land-bridge Project 1065 Km Completed in TBD* The Mecca-Medina High-Speed rail link 440 Km Completed in 2012 The North-South Railway 2,400 Km Completed in 2012 Note: *TBD, to be determined 6 NICDP - National Industrial Clusters Development Program

7 Saudi Arabia Economy World Class Infrastructure Electricity (2008) Consumption 181,000 million KWH Growth 4.7% Capacity 39,200 MW Subscribers 5.4 millions Growth 4.6% Water Desalination (2008) Saudi Arabia produces 24% of the total world capacity of freshwater by desalination process Production 1,066 million cubic meters Growth 3.3% Shuaiba Desalination Plant, Jubail, Kingdom of Saudi Arabia 7 NICDP - National Industrial Clusters Development Program

8 Saudi Arabia s Comparative Advantages 8 NICDP - National Industrial Clusters Development Program

9 Key to facilitate investment in manufacturing Low tax Market One Step Shop Technical Training Business SIDF Product Development Centers Human Capital Investors Financial PIF HR Fund Industrial Export Program Materials Infrastructure 9 NICDP - National Industrial Clusters Development Program

10 Key to facilitate investment in manufacturing Low tax Market One Step Shop Technical Training Business SIDF Product Development Centers Human Capital Investors Financial PIF HR Fund Industrial Export Program Materials Infrastructure 10 NICDP - National Industrial Clusters Development Program

11 The Market Saudi is in the center of a developing market of ~ 400 million people Plus has logistics advantages to reach regional markets such as EU, CIS and SA European Union m GDPPC ($k) 32.4 Main CIS m GDPPC ($k) 11.8 South Asia m GDPPC ($k) 2.9 Notes: 2010f Population in millions; 2010f Gross Domestic Product per capita in US$ thousands; MENA=Middle East and North Africa; CIS- Commonwealth of Independent States;.South Asia=Bangladesh, India, Sri Lanka including Pakistan Source: The Economist Intelligence Unit, EIU, July NICDP - National Industrial Clusters Development Program

12 Unlimited Export to the Arab World (Greater Arab Free Trade Area) Since 2005, all member countries (dark green) forming GAFTA have implemented full customs exemption (100%) on goods on Arab origin exported from member Arab countries. From To UAE* Saudi Arabia* Iran Egypt Tunisia Morocco Europe 5% 5% Varies by Brand Value 30% 0% 7.25%** Turkey 5% 5% Varies by Brand Value 30% 43% 12.55%*** Non EU 5% 5% Varies by Brand Value 30% 43% 17.75% USA 5% 5% Varies by Brand Value 30% 43% 22.00% Saudi Arabia 0% 0% * Handling Charges 2% on Top ** Will Drop to 0% in 2010 *** Will Drop to 0% in 2011 Most Consumer Goods Inccur 30-50% Trade Tariffs 0% 0% 0% 0-5% 5-20% >20 %

13 Low Tax Regime Ranked 6 out of 182 countries for best tax environment in the World Bank survey No value-added tax or sale tax No personnel income tax No property tax 20% corporation tax on profit* Carry forward losses to offset future taxes Note: * For non Saudi firms 13 NICDP - National Industrial Clusters Development Program

14 Key to facilitate investment in manufacturing Low tax Market One Step Shop Technical Training Business SIDF Product Development Centers Human Capital Investors Financial PIF HR Fund Industrial Export Program Materials Infrastructure 14 NICDP - National Industrial Clusters Development Program

15 Saudi Industrial Development Fund (SIDF) Provides medium and long-term interest free loans for industrial projects. Service charge of 2.5% annually Finances up to 50% of the fixed assets, pre-operating expenses and start-up working capital. Offer administrative, financial, technical, and marketing consultancy services. 15 NICDP - National Industrial Clusters Development Program

16 Public Investment Fund (PIF) Provides loans or guarantees for major commercial or industrial projects More than $ 20 billion of loans committed Example of lending activities Local refineries Iron and steel factories Fertilizer factories Petrochemical factories The Saudi International Petrochemical Company (Sipchem) Acetyls Complex project in the Industrial City of Jubail supported by $0.93 billion provided by the Public Investment Fund (PIF) 16 NICDP - National Industrial Clusters Development Program

17 Saudi Export Program (SEP) SEP provides export credit, pre- and post shipment financing, guarantee and insurance of Saudi exports The Program s financial resources has increased to $ 5 billions to support exports SEP objective is to increase non-oil exports 17 NICDP - National Industrial Clusters Development Program

18 Key to facilitate investment in manufacturing Low tax Market One Step Shop Technical Training Business SIDF Product Development Centers Human Capital Investors Financial PIF HR Fund Industrial Export Program Materials Infrastructure 18 NICDP - National Industrial Clusters Development Program

19 Key Materials for Manufacturing Industries Major projects to expand steel and aluminum production Steel & Iron Products Aluminum Products World Class Flat Rolling Mill 1. Class 1 automotive sheet products 2. Appliance quality grades and finishes 3. High strength sheet products Iron Foundry Development 1. Manufacture large industrial castings 2. Automotive cast iron products Capacity 730 K tons in 2013 World Class Flat Rolling Mill 1. Manufacture can body stock, end cap stock 2. Construction sheet products 3. Automotive sheet products 4. Foil stock Aluminum Foundry Development 1. Cast wheels 2. Automotive power train castings 3. Light industrial castings 19 NICDP - National Industrial Clusters Development Program

20 Key Materials for Manufacturing Industries Polymer Manufacturing capacity will double by 2012 SAUDI ARABIA POLYMER FORECAST (thousand tons per year) SAUDI ARABIA POLYMER CAPACITY FORECAST (2008, thousand tons per year) 25,000 20,000 15,000 10,000 production 5,000 0 Note: In the right-hand chart, Others represent a number of new products such as : SBR, EPR, PBR, Carbon Black, EPDM, PPMA, PA, EVOH, PACN, POM, Carbon Fibers, etc 20 NICDP - National Industrial Clusters Development Program

21 Global Competitive Infrastructure Low energy costs and world class industrial infrastructure MODON cities Land Leasing rate (25 year term) Land development charge (one time) Industrial Electricity rate $ m2 $ m2 $0.032 kw KSA gas prices are the lowest of the world 2006, $ per MM Btu Water (over 301 m3) $1.06 per m3 Royal Commission cities KSA India France KSA electricity cost is one of the lowest 2006, $ cent per KWh Land Leasing rate (20 year term) Electricity charge $1.06 per m2 $0.032 kw Water (over 301 m3) $1.06 per m3 KSA France Thailand India Japan Source: Modon charges Saudi Arabia Information; EIA 2006; Gulf News; Gov of India Ministry of Petroleum; Tamil Nadu Electricity Board (Chennai region); CRA Analysis; Team analysis 21 NICDP - National Industrial Clusters Development Program

22 Industrial Infrastructure The Royal Commission s two major Industrial Cities of Jubail (East Coast) & Yanbu (West Coast) integrated with the Industrial Clusters Projects offer exceptional market reach and concentration of services and resources Yanbu Jubail Y J 22 NICDP - National Industrial Clusters Development Program

23 Industrial Infrastructure Modon s fourteen Industrial Cities in the Kingdom 23 NICDP - National Industrial Clusters Development Program

24 Industrial Infrastructure New Economic Cities in the Kingdom 24 NICDP - National Industrial Clusters Development Program

25 Industrial Infrastructure PetroRabigh Conversion industrial Park Hectares Adjacent to PetroRabigh refinery and petrochemical complex Land Leasing rate (30 year term) Industrial Electricity rate Water rate $ 1.6 m2 $0.027 kw $1.2 m3 Resin prices Competitive net back based pricing 25 NICDP - National Industrial Clusters Development Program

26 Key to facilitate investment in manufacturing Low tax Market One Step Shop Technical Training Business SIDF Product Development Centers Human Capital Investors Financial PIF HR Fund Industrial Export Program Materials Infrastructure 26 NICDP - National Industrial Clusters Development Program

27 Advanced Training Institutions The enrollment at higher technical training institutions has increased from 840 students in 1970 to 54,700 students in Existing & functional - Higher Institute for Plastic Fabrication (R) - National Institute for Construction Technology (J) - Saudi Oger Training Institute (R) - Saudi Institute for Petroleum Services (D) - Saudi Japanese Higher Institute for Automobiles(J) - General Motors Institutes for Automobiles (R,D,J) Under Development / Construction - Higher Institute for Home electronics & Appliances (A) - Higher Institute for Elastomer Industries (Y) Note: (R) Riyadh, (J) Jeddah, (D) Dammam, (Y) Yanbu 27 NICDP - National Industrial Clusters Development Program

28 Human Resources Development Fund (HRDF) Offer grants for training Saudi. employees. Pays a percentage of the salary of trainee who is hired by a private firm after he finishes his training HRDF is coordinating and financing vocational and technical training The HR Fund objective is to prepare the national workforce for the private job market 28 NICDP - National Industrial Clusters Development Program

29 Introduction to the Program Saudi Arabia s National Industrial Cluster Development Program! 29 NICDP - National Industrial Clusters Development Program

30 Saudi National Industrial Strategy Vision: Create a globally-competitive industry based on innovation and acting as a basic tool to transform the Kingdom s natural resources into sustainable wealth Key 2020 Targets: Increase to 20% the manufacturing contribution to GDP (20 by 20) Increase to 35% the exports from manufactured goods Generate an 8% annual growth for manufacturing value-added 30 NICDP - National Industrial Clusters Development Program

31 The Clusters 4 industrial sectors had been selected to leverage the energy intensive comparative advantage of Saudi Arabia and create good job opportunities Automotive Metals Processing Packaging Consumer Goods 31 NICDP - National Industrial Clusters Development Program

32 NICDP is an industrial development agency to assist international companies from target industries to set up operation in Saudi Arabia Ministry of Commerce and Industry NICDP President : A. Shalabi Source: NICDP Automotive VP: D. J. Vigouroux Consumer goods VP: U. Dill Metals VP: K. Matz Packaging VP: L. Shebel Industrial enabling VP: K. AlOhali Business analysis Legal affairs Adm. support Board H.E. Abdullah A. Z. Alireza HRH Prince Faisal Bin Turki Bin Abdulaziz H.E. Dr. Ali Al-Ghafis Dr. Khalid Al-Suliman Mohammed Al-Dobaib Dr. Ahmed Habib Salah Mohammed Al-Mady Salim Al-Aydh Philip Yeo Ahmed Al-Swuaidan Dr. Abdulaziz Al-Jazzar Jorma Halonen Azzam Y. Shalabi Clusters Cross-functional groups Chairman - Minister of Commerce and Industry Advisor to Ministry of Petroleum and Mineral Resources Governor for Technical and Vocation Training Corporation Deputy Minister for Industrial Affairs Acting Director General for Saudi Industrial Development Fund Economic Advisor to Ministry of Economy and Planning Vice Chairman & CEO of SABIC Senior Vice President of Saudi Aramco Former Chairman of the Economic Development Board of Singapore Private Sector Industrialist Private Sector Industrialist Former Deputy CEO of the Volvo Group President of NICDP Mission Catalyze the development of export-oriented and globally competitive manufacturing industries for the purpose of significantly diversifying the economy and creating rewarding job opportunities for Saudi nationals

33 Introduction to the Solar Cluster Saudi Arabia s National Industrial Cluster Development Program 33 NICDP - National Industrial Clusters Development Program

34 Rationale for Solar technology 1 Photovoltaics (PV) and Concentrated Solar Power (CSP) technologies are expected to grow 20-30% /yr. to an installed capacity of ~200 GW by All steps in the PV value chain will experience margin pressure as a result of overcapacity. Mirrors and receivers the most attractive part of CSP value chain 3 New PV and CSP technologies could disrupt traditional technologies 4 5 Current financial crisis has slowed down solar industry growth. However, long term prospect of the industry remains positive Saudi Arabia is well positioned to take advantage of solar power : Strong solar intensity Large availability of space Potential of replacing subsidized diesel-fired peaking capacity with solar in Northeastern part of Kingdom Active research projects with local and global R&D centers 34 NICDP - National Industrial Clusters Development Program

35 GW Long-term demand projections and announced solar projects in the Middle East indicate strong opportunities. Global cumulative installed capacity[gw] forecast GW GW Ongoing solar activities in Middle East Egypt: 150 MW solar combined cycle plant (30 MW solar field) Iran: 500 MW Yazd power station (thereof 17 MW solar energy) UAE: Masdar-100 MW CSP power plant Annual global PV installations [GW] actual development vs predictions 1 EPIA prediction 2001 Actual development Yemen: 200 MW solar power plant (PV or CSP) Projects in realization phase Announced projects UAE: >2 GW until 2020; Dubai lighthouse with 4,000 PV modules Oman: 100 MW CSP power plant (long-term target: 1 GW); fuel-pv-hybrid systems ~50 MW A sustained and decisive engagement for solar in Saudi Arabia is justified and exemplified by activities already initiated in neighboring countries. Saudi Arabia: 20 MW PV power as remote energy supply Note: 1) Additionally ~436MW of CSP-power was installed at the end of Sources: Apricum 2009, European Photovoltaic Industry Association (EPIA), Schott Solar, Greenpeace. 35

36 ME high solar intensity offers potential for local and regional demand in the future, thereby providing long term investment opportunities DNI High Low US Southern Europe Northern Africa/ Middle East China/India Australia Source: Western governors association, NREL

37 Photovoltaic Industrial Sector Vision 2020 Set up production Facilities for: Poly-Silicon Ingots & Wafers Solar Cells Solar Modules Solar accessories like trackers, inverters etc. Thin film modules (CdTe, CIGS, a-si) Concentrated Solar Power (receivers, mirrors.. etc.) 37 NICDP - National Industrial Clusters Development Program

38 Services of NICDP NICDP offers a comprehensive service package to investors to ensure minimal risks and an optimum payback period. The services support (but are not limited to): Market studies and market data Specific product requirements Location Requirements Identification of local suppliers Labor and Training requirements Evaluation of best fitting business model (FDI, JV or licensed Manufacturing) Incentives assessment and application support Match making with Saudi investors

39 Contacts: National Industrial Cluster Development Program P.O. Box Riyadh Saudi Arabia Consumer Goods Cluster: Ulrich Dill Vice President Saleh Al-Agili Director Office: Cell: Fax: ulrich.dill@saudiclusters.com saleh.agili@saudiclusters.com More information about the Program is available at 39