HANGZHOU, China/SHIELI, Kazakhstan: On a windswept steppe in southwestern Kazakhstan, the new Chinese-backed cement plant on the outskirts of the village of Shieli stands as a gleaming symbol to some of the Central Asian country’s industrialization.
“We need oil-well cement for the oil and uranium industries,” said Yevgeniy Kim, deputy governor of the Kyzylorda region where the plant is located.
“This plant should have been built much earlier. If it is needed, we will expand it,” he told Reuters on the sidelines of its opening ceremony in December, which was live-broadcast to the Kazakh capital Astana, where a nationwide event to present some of the country’s newest projects to President Nursultan Nazarbayev was being held.
Built jointly by Gezhouba Group and Kazakh firm Corporation DANAKE, the plant is an illustration of how China is using its “Belt and Road” initiative to redraw its manufacturing footprint well beyond its own borders, reshaping industries in the process.
But amid increased scrutiny of Belt and Road — a sprawling infrastructure plan meant to foster trade along a new “Silk Road” linking Asia with Europe, the Middle East and beyond — others say China is using the initiative to export industrial overcapacity, especially in heavy polluting industries.
While the drive has encouraged China’s corporate giants to seek overseas business, some worry the trend could distort regional economies and increase their dependency on Chinese money.
Driven out
China says the four-year-old Belt and Road initiative, a signature policy of President Xi Jinping, is a “win-win” opportunity that helps other countries upgrade their transport and infrastructure links while boosting its own trade.
Chinese authorities have also suggested it as a possible solution to its industrial overcapacity woes, a legacy of the billions of dollars it poured into infrastructure projects to weather the 2008/09 global financial crisis, allowing firms to shift to areas where demand could still grow.
That idea has been acted upon by companies in sectors ranging from steel to cement to coal, industry executives and analysts say, shaking up global production maps.
“Every week there’s news about a new cement plant in the Commonwealth of Independent States area or Asia area that is being built by (the Chinese),” said Raluca Cercel, an associate at consultancy CW Group, which analyzes the cement market.
Hundreds of cement plants have been shuttered in China under the pollution crackdown, according to state media, and the China Cement Association says that the country aims to eliminate about 400 million tons of capacity — about one-tenth of the total — by 2020.
Chinese majors such Gezhouba, Anhui Conch Cement and Shangfeng Cement in 2018 announced investments in at least 18 plants across Africa, Asia and South America with total annual capacity of more than 20 million tons — larger than the output of most European countries — according to industry publication Global Cement.
They are also building more plants on behalf of Western cement makers such as LafargeHolcim and HeidelbergCement, said David Perilli, an editor at Global Cement.
These Chinese firms had no such overseas footprint a decade ago, executives said.
Gezhouba is keen to embrace the new opportunities, said Li Jinqing, general manager at the Chinese firm’s Shieli subsidiary.
“We have 17 cement plants in China, this one is our first here,” he said. “We plan to build more plants in Central Asia and Kazakhstan, western Kazakhstan.. Everything will depend on the market.”
Overcapacity
China has in the last five years stipulated that companies must install advanced anti-pollution technologies to meet raised standards for the production of materials such as cement, and has banned new cement capacity apart from projects that are considered “absolutely necessary.”
Plants are also forced to shut down production when pollution levels are high.
Hangzhou-based Shangfeng Cement is another Chinese firm that is looking to expand its footprint, building plants in Kyrgyzstan and Uzbekistan.
“The overcapacity situation in China has become very severe...which is why we considered going to countries along the Belt and Road,” the company’s vice president Qu Hui told Reuters in an interview.
“China is currently able to produce more than 3 billion tons of cement, but there is only demand for about 2.2 billion tons in reality.”
Shangfeng had also received a $68 million low-interest loan from the Export-Import Bank of China to build its first overseas production line, an offer made under the Belt and Road initiative, he said.
“The approval was done very quickly and the government was really supportive,” he said.
Chinese companies say the plants they are building abroad use the latest technology, are equipped with essential filters, and comply with local environment regulations.
However, environmental groups say the export of the pollution problems that dogged China’s rapid industrialization is a concern.
“Most countries targeted by Chinese firms for industrial investments have very weak emissions and environmental standards and enforcement,” said Lauri Myllyvirta, lead analyst at Greenpeace’s global air pollution unit.
“It’s definitely a concern that they take place in this regulatory vacuum.”
Kazakhstan has no unified national pollution standards like those in place in the European Union and China, according to local campaign group the Association of Practicing Ecologists, and does not track mercury emissions from cement kilns.
“Given those differences in pollution standards in China and Kazakhstan, it might be profitable for China to shift cement plants — under the Belt and Road project — to Kazakhstan which has rich deposits of carbonates and silica used as cement feedstock,” it said in an email to Reuters.
While analysts said a number of central Asian countries were eager to ramp up cement production to create jobs and reduce reliance on imports as they seek to grow their manufacturing industries, there is a limit to how much new capacity their markets can absorb.
Landlocked Tajikistan, which has been a magnet for Chinese cement investors, exported 1 million tons of cement in 2017, up from just 500 tons in 2015, according to government data.
Shangfeng’s Qu said overcapacity could be hard to avoid, due to the highly efficient nature of Chinese cement manufacturing processes and their tendency to build bigger plants.
“It’s fine when you’re the first there,” he said. “But when you have two to three companies building in one country together, overcapacity can emerge very quickly.”
Shuttered at home, cement plants bloom along China’s new Silk Road
Shuttered at home, cement plants bloom along China’s new Silk Road
- Chinese firms have invested in more than 18 cement plants abroad
- Cement firms face overcapacity, pollution crackdown in China
MSC launches service to boost Saudi-East Asia trade
JEDDAH: A new shipping service by Mediterranean Shipping Co. is set to strengthen trade links between Saudi Arabia and key ports in East Asia, bolstering the Kingdom’s global logistics network.
Saudi Ports Authority, known as Mawani, announced that MSC will launch the new “Clanga” line at the Jubail Commercial Port, adding that it will strengthen the Kingdom’s position in investment and logistics, according to the country’s official press agency.
The service will connect Jubail Commercial Port with King Abdulaziz Port in Dammam, Port of Singapore, and Port of Shanghai in China, as well as Port of Colombo in Sri Lanka, with a handling capacity of up to 6,000 twenty-foot equivalent units.
This move is expected to boost foreign investment and improve supply chain efficiency. It also aligns with Mawani’s efforts to enhance the competitiveness of Saudi ports and support national exports, as well as the National Transport and Logistics Strategy’s goal of establishing the Kingdom as a global logistics hub connecting three continents.
Mawani said in a statement that the addition of the service to the Jubail port highlights its strategic role in enhancing maritime transport and logistics while supporting economic activities in the Eastern Province.
The authority added that the port’s proximity to production hubs, coupled with advanced infrastructure, allows it to accommodate vessels of various types and sizes, further strengthening Saudi Arabia’s connectivity with global terminals.
As a key facilitator of national exports, particularly industrial and petrochemical products from Jubail Industrial City, the port plays a crucial role in boosting the Kingdom’s global trade competitiveness, Mawani emphasized.
In August, MSC introduced the service at the King Abdulaziz Port, connecting the city with major terminals in China, including Ningbo, Shanghai, and Shekou, as well as Singapore.
Mawani announced at that time that the service would operate weekly voyages with a capacity of up to 15,000 TEU.
In a statement, MSC said the service was designed to address terminal congestion issues in the Middle East and enhance connectivity for Asia-Middle East cargo.
The shipping company, which won the “Best Shipping Line – Asia-Africa” award at the 2024 Asian Freight, Logistics, and Supply Chain Awards, further said that Clanga would offer a unique and competitive service for Saudi exports to the Far East through its direct call in Shanghai from Dammam.
Closing Bell: Saudi main index closes higher as key stocks gain
RIYADH: Saudi Arabia’s Tadawul All Share Index edged up on Monday, gaining 29.26 points, or 0.25 percent, to close at 11,883.04.
The total trading turnover of the benchmark index was SR5.4 billion ($1.4 billion), as 100 of the stocks advanced and 142 retreated.
Conversely, the Kingdom’s parallel market Nomu dropped 240.58 points, or 0.77 percent, to close at 31,034.69. This comes as 33 stocks advanced while 45 retreated.
The MSCI Tadawul Index increased 9.09 points, or 0.61 percent, to close at 1,503.88.
TASI’s top performer was Arabian Company for Agricultural and Industrial Investment, which surged by the 30 percent daily limit in its market debut on Monday.
Its share price jumped to SR65, significantly surpassing its initial price of SR50, which was set at the upper end of the offering range.
Other top performers included Retal Urban Development Co., whose share price rose 7.18 percent to SR15.82, as well as Astra Industrial Group, whose share price surged 4.45 percent to SR169.
Alkhorayef Water and Power Technologies Co. was also among the top performers, increasing 4.38 percent to SR166.80.
Naqi Water Co. was the worst performer with its stock price falling 4.33 percent to SR57.40.
Arabian Shield Cooperative Insurance Co. also saw its stock prices decline 3.94 percent to SR17.56. Arriyadh Development Co. also dropped to SR34.65, a 3.88 percent decrease.
On the announcements front, several major Saudi companies released their annual financial results for the period ending Dec. 31, 2024, showcasing mixed performances across industries.
Arabian Mills for Food Products Co. reported a 12.98 percent increase in revenue, reaching SR973.94 million, compared to SR862.08 million in the previous year.
This growth was primarily driven by a 39.75 percent surge in feed sales following the company’s entry into the poultry feed segment and reinforced production efforts.
Bran sales also grew by 17.91 percent, and flour revenues saw a modest rise of 4.02 percent, supported by business-to-business revenue growth of 3.19 percent and incentives in the modern trade segment.
Net profit increased by 5.93 percent to SR212.15 million, supported by improved product cost efficiency, administrative streamlining, and reduced financing costs.
Despite the growth, the company saw a 1.03 percent drop in its share price to settle at SR47.90.
The United International Transportation Co., also known as Budget Saudi, posted a significant 43.03 percent increase in revenue, reaching SR1.97 billion, up from SR1.38 billion in the prior year.
This surge was fueled by the expansion of both long-term and short-term rental fleets, alongside contributions from the acquisition of AutoWorld and the integration of revenue from the Overseas Development Co.
Net profit climbed 12.44 percent to SR311.69 million, benefiting from improved rental rates, fleet expansion, and operational synergies post-acquisition.
Budget Saudi’s share price saw a 0.26 increase to reach SR76.40.
Meanwhile, the Kingdom Holding Co. saw an 11.57 percent decline in revenue to SR2.39 billion, down from SR2.70 billion in the previous year.
The decline was primarily attributed to reduced dividend income and lower gains on investments at fair value through profit or loss.
Despite the revenue drop, net profit rose by 22.08 percent to SR1.24 billion, supported by lower financial charges, gains from the reversal of impairments, increased share of profits from equity-accounted investees, and higher income from hotel operations.
Kingdom Holding’s stock price increased by 1.64 percent to reach SR8.06.
BinDawood Holding Co. reported a modest 1.33 percent increase in revenue, reaching SR5.68 billion, compared to SR5.60 billion in the previous year.
The growth was driven by contributions from new store openings, increased sales from Jumeirah Trading Co. and Future Retail Tech, and improved point-of-sale performance.
However, this was partially offset by store closures during the year. Net profit grew by 1.88 percent to SR280.25 million, supported by stronger supplier terms, operational efficiencies, and a better product mix, though higher operating expenses related to talent acquisition and business expansion limited the increase.
BinDawood’s stock price grew 0.63 percent on Monday to reach SR6.42.
OECD predicts 3.8% economic growth for Saudi Arabia in 2025
RIYADH: Saudi Arabia’s economy is poised for substantial growth, with its gross domestic product projected to increase from 1.2 percent in 2024 to 3.8 percent in 2025.
The projection by the Organisation for Economic Cooperation and Development comes amid global economic uncertainties, as many advanced economies are expected to face sluggish growth due to escalating trade tensions, geopolitical instability, and inflationary pressures.
This forecast signals a turnaround for the Kingdom, positioning it as one of the fastest-growing economies within the G20 in the coming years. While Saudi Arabia’s GDP growth is expected to moderate slightly to 3.6 percent in 2026, global GDP growth is projected to slow to 3.1 percent in 2025 and 3 percent in 2026.
Stable inflation
The OECD report also forecasts that Saudi Arabia’s inflation will remain low and stable, projected at 1.9 percent in 2025 and 2 percent in 2026. This stands in contrast to the higher inflation rates seen in many major economies, particularly those facing trade-related disruptions and rising labor costs.
The Kingdom’s inflation stability is noteworthy, especially within the context of the OECD’s broader inflation projections. The report highlights that G20 headline inflation is expected to stay at 3.8 percent in 2025 and 3.2 percent in 2026, with core inflation remaining above target in several advanced economies, including the US.
Oil market and OPEC+ production strategy
A key factor driving Saudi Arabia’s economic performance is its oil sector, which continues to be a vital growth pillar despite the country’s ongoing efforts to diversify its economy under Vision 2030.
The OECD report noted that OPEC+ plans to gradually “unwind production curbs” starting in April 2025, a move that could have significant implications for global oil prices.
At the same time, Saudi Arabia’s efforts to boost non-oil revenue sources under Vision 2030—through investments in technology, tourism, and infrastructure—are helping to strengthen economic resilience amid market volatility. However, the OECD also cautioned that geopolitical risks and rising protectionist policies in global trade could disrupt energy markets, potentially leading to price fluctuations.
Global economic outlook
Beyond Saudi Arabia, the OECD painted a complex outlook for the global economy. “The global economy has shown real resilience, with growth remaining steady and inflation trending downward. However, signs of weakness have emerged, driven by heightened policy uncertainty,” said OECD Secretary-General Mathias Cormann.
Global GDP growth is projected to slow from 3.2 percent in 2024 to 3.1 percent in 2025 and 3 percent in 2026, with many advanced economies experiencing lower-than-expected growth due to increased trade barriers, inflationary pressures, and policy uncertainty.
The US economy is expected to see growth slow from 2.8 percent in 2024 to 2.2 percent in 2025 and 1.6 percent in 2026, as higher interest rates and trade tensions dampen investment and consumer spending. Similarly, the eurozone’s economy is projected to grow by just 1 percent in 2025 and 1.2 percent in 2026. China’s economy is also expected to decelerate, with growth slowing from 4.8 percent in 2025 to 4.4 percent in 2026.
Trade fragmentation and geopolitical risks
A key concern highlighted by the OECD is the growing rise of trade barriers and their potential impact on global economic stability. “Increasing trade restrictions will contribute to higher costs for both production and consumption. It remains essential to maintain a well-functioning, rules-based international trading system and keep markets open,” Cormann added.
The US has raised tariffs on imports from China by 20 percentage points, prompting retaliatory actions from China. In addition, higher tariffs on steel, aluminum, and other goods are expected to disrupt supply chains and increase production costs globally.
The OECD warned that such trade fragmentation could slow global growth and push inflation higher, particularly in economies heavily dependent on international trade. The report also noted that if trade tensions escalate further, global GDP could decline by an additional 0.3 percent over the next three years, with particularly severe effects on Canada, Mexico, and key European economies.
Monetary policy and inflation pressures
The OECD’s outlook also indicated that inflation remains a significant concern in many economies. While inflation is expected to moderate, it is likely to stay above central bank targets in key economies like the US, the eurozone, and the UK through 2026.
“Central banks should remain vigilant given heightened uncertainty and the potential for higher trade costs to push up wage and price pressures. Provided inflation expectations remain well-anchored, and trade tensions do not intensify further, policy rate reductions should continue in economies where underlying inflation is projected to moderate or remain subdued,” the report stated.
For emerging markets, inflation presents a mixed picture. Brazil and South Africa are expected to face persistent inflationary pressures, while India and Indonesia may see inflation remain relatively contained. Countries like Turkiye and Argentina, which have dealt with extreme inflation in recent years, are projected to see a sharp decline in inflation rates as fiscal and monetary tightening measures take effect.
The role of AI, structural reforms
Beyond trade and monetary policy, the OECD report emphasized the importance of structural reforms and digital transformation in enhancing long-term economic resilience.
“Governments can help by ensuring the availability of high-speed digital infrastructure, maintaining open and competitive markets, and providing opportunities for workers to enhance their skills,” the report noted.
OECD Chief Economist Alvaro Santos Pereira highlighted that AI is poised to drive significant labor productivity growth over the next decade, with even greater potential when combined with advancements in robotics.
“Yet, the gains from AI may diminish if policies do not facilitate higher adoption rates and support labor reallocation,” Pereira warned.
Navigating uncertainty
The OECD called for stronger international cooperation to prevent further trade fragmentation and urged governments to adopt a balanced approach to fiscal and monetary policies. It cautioned that excessive tightening of monetary policy could unnecessarily slow growth, while failing to manage inflation could lead to additional economic disruptions.
The report’s key policy recommendations emphasized the importance of avoiding further tariff escalations and seeking diplomatic trade solutions. It also highlighted the need for investments in AI and digital transformation to boost productivity, while maintaining cautious monetary policies to ensure inflation remains under control. Additionally, the report stressed the importance of encouraging structural reforms to build more resilient and dynamic labor markets.
UK businesses eyeing Middle East investments amid growing regional appeal: report
- Europe is the leading region, with 55% of respondents naming it their primary international investment market
- Kingdom’s regional headquarters program has emerged as a major pull for international firms
RIYADH: Interest among UK business leaders in the Middle East as a key investment hub has doubled to 36 percent, driven by the region’s economic transformation and strategic appeal, a new survey has revealed.
The study, conducted by communications consultancy Pagefield, surveyed over 200 senior figures across the finance, technology, and manufacturing sectors.
Europe is the leading region, with 55 percent of respondents naming it their primary international investment market, yet the Middle East’s growing appeal reflects regional efforts to diversify economies and attract foreign direct investment.
Mega projects such as Saudi Arabia’s NEOM and large-scale developments in the UAE are reshaping the landscape, promising to draw more global capital.
“The data shows a clear shift in UK businesses’ global outlook. While Europe remains a top priority, the sharp rise in interest in the Middle East and Asia signals a growing appetite for new, high-potential markets,” said Christopher Clark, partner at Pagefield.
He added: “Businesses are looking beyond traditional hubs and seeking opportunities in regions that offer both economic dynamism and strategic advantages.”
Saudi Arabia’s regional headquarters program has emerged as a major pull for international firms, including UK companies. The program offers incentives such as a 30-year exemption from corporate income tax and withholding tax on headquarters activities, alongside other benefits like discounts and support services.
Several leading UK firms, including IHG Hotels and Resorts, PwC, and Deloitte, have already set up their regional headquarters in the Kingdom, positioning themselves to capitalize on the country’s rapid economic transformation.
The survey also highlighted rising UK business interest in Asia, with investment focus climbing from 22 percent to 32 percent.
Participants in the survey emphasized the need for greater government support as UK firms pursue international expansion.
According to the study, 83 percent of UK companies said the government must do more to support international growth, with nearly 31 percent identifying Free Trade Agreements as the most crucial mechanism.
Other key factors influencing investment decisions among UK business leaders include economic stability, workforce quality, and a strong commitment to equality, diversity, and inclusion.
The report also noted that UK firms remain overwhelmingly optimistic about foreign direct investment, with 91 percent expressing confidence in cross-border expansion despite global economic and political challenges.
“UK businesses are ready to invest overseas, but they need the right conditions to do so. The government should stand ready to support outward as well as inward investment, as it will strengthen UK businesses and the UK economy,” said John Alty, senior adviser at Pagefield and former permanent secretary for the Department for International Trade.
He added: “Businesses are looking to the government to facilitate supply chains through free trade agreements and provide in-country support to boost business confidence.”
Saudi Arabia’s Al-Jouf records 15% annual growth in commercial activity
- Growth rate of new commercial registrations in the region reached 98%
- SMEs recorded a 33% growth in 2024 compared to 2023
RIYADH: Saudi Arabia’s Al-Jouf province recorded a 15 percent year-on-year growth in commercial activity in 2024 thanks to successful regional economic initiatives, new data showed.
Released by the Vision Realization Office in Al-Jouf, the study also indicated a significant increase in the growth rate of new commercial registrations in the region, reaching 98 percent, the Saudi Press Agency reported.
This falls in line with promoting development and growth while encouraging private economic activity across all regions of the Kingdom, in line with Saudi Vision 2030.
It also aligns with the region’s role as the northern gateway to the Kingdom, connecting it to Jordan and facilitating trade through the Al-Haditha land port. This terminal is the third busiest in the nation, handling $247 million in imports and exports in 2019, according to Invest Saudi.
The study monitored the growth of funded projects across the region, with 478 initiatives, and support for existing undertakings with liquidity estimated at SR22.05 million ($5.88 million).
Small and medium-sized enterprises recorded a 33 percent growth in 2024 compared to 2023, while the share of women-funded projects reached approximately 52 percent, a clear indicator of the empowerment of Saudi females.
The analysis primarily attributed these gains to the efforts and commitment of the region’s governor, Prince Faisal bin Nawaf bin Abdulaziz.
This comes as he worked on translating the generous directives into reality, serving the interests of citizens. He urged the branches of ministries and relevant agencies to harness all resources to overcome challenges and find appropriate solutions.
The governor also monitored the implementation of projects that serve the Al-Jouf region, its governorates, and centers, both investment- and development-oriented, as well as prevented any failures, achieving their set goals.
In March, Prince Faisal said that Saudi Arabia’s Al-Jouf province offers a fertile investment landscape due to abundant renewable energy and a robust food supply.
At the time, he highlighted that the region offers many investment opportunities and competitive advantages. He also emphasized that Al-Jouf has implemented various initiatives to overcome challenges for potential investors, with coordinated efforts across multiple government sectors.
The official also underlined at the time that the Al-Jouf region is actively fostering innovative investments through unique and pioneering projects. He emphasized that these endeavors will create future employment prospects for both male and female youth in the region and the nation at large.
