DHAHRAN: ARAB NEWS
Published — Tuesday 1 October 2013
Last update 1 October 2013 1:13 am
Underlining the significant role that local enterprises play in contributing to a robust supply chain, Saudi Aramco Entrepreneurship Center (Wa’ed) and GE organized a Saudi Supplier Conference to strengthen the participation of local entities in the Kingdom’s manufacturing and service sectors, and to create jobs for skilled and enterprising Saudi youth.
With local suppliers to benefit from Wa’ed’s support program, the conference follows an agreement between Saudi Aramco’s Wa’ed and GE last year to support Saudi small and medium enterprises (SMEs) and engage them in the domestic manufacturing and service sector.
At the conference, GE showcased the requirements of its diverse business portfolio in the Kingdom, particularly in power and water, oil and gas, and energy management, which can be supported by domestic manufacturers, and the role that its initiatives, including the GE Manufacturing Technology Center in Dammam, plays in promoting localized manufacturing and boosting exports. The company also highlighted the role that Saudi SMEs can play in boosting GE’s global supply chain through a focus on localized innovation.
Inaugurating the Saudi Supplier Conference, Motassim Masshouq, chairman of Wa’ed, said: “The Saudi economy is one of the most booming economies in the world that offers great business opportunities in vital sectors such as manufacturing. This creates the need to establish a strong and diversified supplier base, which is an opportunity for local companies to develop the necessary capabilities that enables them to become important parts of this supplier base.” He spoke about the strategic partnership between Wa’ed and GE that focuses on the support of SMEs, and underlined that the conference is one of the positive outcomes of the partnership. He welcomed and introduced GE’s Chairman and CEO, Jeffery Immelt.
Immelt and Wa’ed’s Managing Director Jamal Naboulsi addressed a gathering of more than 200 SMEs from the Kingdom, representing diverse economic sectors, including manufacturing, energy, power, aviation, transport and health care, among others.
Naboulsi said: “The mission of Wa’ed is to support the Kingdom’s effort to transform into a knowledge-based economy, and to significantly contribute to the creation of quality and sustainable jobs for Saudi nationals.
This mission is accomplished through four comprehensive and unique programs. The first involves supporting the creation or expansion of SMEs through loans, the second involves supporting through venture capital investment, the third program provides specific support to SMEs active in the energy sector and the fourth one focuses on enhancing the entrepreneurship eco-system through collaboration with other relevant entities in the Kingdom.” He emphasized the importance of the strategic partnership with GE that involves several programs and activities aimed to support SMEs, stating that the conference is an outcome of the relationship.
Immelt, in his keynote address, stressed the importance of localization. “Everything we produce — from aircraft engines to health care equipment, locomotives, aircraft engines and water treatment solutions — are the results of elaborate, carefully integrated networks of suppliers and sub-suppliers. Our suppliers are therefore our integral partners and we devote our resources to strengthening the value chain consistently. This is particularly relevant for Saudi Arabia, where we have a strong heritage.”
He added: “Through our partnership with Wa’ed, we are driving a result-oriented development strategy that will encourage the youth to be involved in the manufacturing and service sector. It is also a natural fit to our growth in the Kingdom, where we are currently rolling out a $1 billion investment, including the GE Manufacturing Technology Center. GE’s businesses are integrally linked to the Saudi economy with each business requiring raw materials that can be procured locally. Our focus on working with local partners will further contribute to boosting the economy by creating new jobs and promoting new enterprises, which can potentially be part of our global supply chain.”
Since supplying Saudi Arabia with turbo-machinery for its first oil expedition in 1942, GE has been a growth technology partner to the Kingdom and has over 80 years of long-term partnerships in the Kingdom.
Local manufacturing units stand to benefit from multimillion business deals by providing timely supplies to organizations such as GE, particularly for its GE Manufacturing Technology Center. There is tremendous potential for local supplies in areas such as steel structures, fixtures, turbine casings, tanks, wind generator frames, exhaust stacks, flex hoses, valves, air coolers, control cabinets, cabling power distribution panels, medium voltage switchgear, for fabrication works, piping, fluid systems and electrical work, among others.
Several projects in the power, infrastructure, industrial and metal sectors, water and waste water, oil and gas and petrochemicals/refining sectors are ongoing in the Kingdom, presenting a robust opportunity for local suppliers to benefit by providing different components needed for seamless project execution.
GE’s business experts presented detailed overviews of the business strategy, outlook and key expectations from the suppliers, emphasizing on the standards in quality expected and the supplier approval process. Wa’ed experts discussed the role that the entity plays in supporting the growth of suppliers through its finance schemes. The discussion also covered nuclear energy certification guidelines and requirements, and the role that local suppliers can play by providing nuclear-certified products.
The conference highlighted the growing role that the private sector and SMEs play today in boosting the growth of the Saudi economy. Their growth is also in line with the vision of the Kingdom to diversify the economy and promote exports. A study by the International Finance Corporation estimates that there are over 1.8 million SME and micro enterprises in the Kingdom.
The event, organized by GE and Wa’ed, followed the strategic partnership agreement signed by the two companies to serve as a major partner and incubator of new businesses, especially in the small and medium enterprises sector, in the Kingdom. GE will also partner with the SMEs, nurtured by Wa’ed, to develop their competencies as potential suppliers of the company in the energy sector.
As part of its program, Wa’ed provides entrepreneurs in Saudi Arabia with debt financing, and provides local and foreign SMEs with financing in the form of loans and equity participation. In addition, Wa’ed provides training, networking and other support services.