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
MODON inks $453m in private sector deals to expand Saudi industrial cities
JEDDAH: Saudi industrial cities are set for further growth as the sector's authority revealed it has signed 23 development contracts with the private sector, valued at over SR1.7 billion ($453 million).
The agreements, announced by the Saudi Authority for Industrial Cities and Technology Zones, or MODON, encompass a wide range of projects aimed at boosting industrial capabilities.
These include the expansion of industrial cities, the construction of ready-made factories, the enhancement of MODON’s safety and security systems, and initiatives aligned with the National Industry Strategy.
Additionally, the projects will address water and irrigation needs, improve water treatment facilities, upgrade electricity services, and expand road networks.
MODON’s latest contracts highlight the growing role of the private sector in supporting Saudi Arabia’s ambitious Vision 2030 goals, which emphasize economic diversification, local production, and the creation of an attractive environment for both domestic and foreign investment.
The projects are expected to enhance the competitiveness of Saudi industrial cities, foster greater investment, and improve operational efficiency for businesses.
The agreements will also contribute to regional development, improve environmental sustainability, and promote vegetation growth, MODON stated in a post on its X account.
The development of these projects is in line with Saudi Arabia’s broader efforts to build a dynamic and innovative economy.
This move follows a previous round of agreements in July, when MODON signed nine contracts valued at SR1 billion to enhance infrastructure and service facilities across various industrial hubs. Key initiatives from that round included the development of infrastructure in Makkah’s and Jeddah’s industrial cities and the installation of 132-kilovolt overhead power lines in Tabuk’s industrial city.
Looking ahead, MODON plans further expansion with projects that will improve electrical services, such as the construction of 115-kV overhead power lines in Hafr Al-Batin’s industrial city. The authority is also focusing on enhancing infrastructure networks for the first and second phases of Dammam’s Third Industrial City.
Since its establishment in 2001, MODON has overseen the development of 36 industrial cities and is responsible for managing both operational and under-construction industrial lands across the Kingdom.
In the first quarter of 2024, MODON attracted SR3.4 billion in private sector investments, signed 142 new industrial contracts, and registered a total of 6,758 factories.
As part of its commitment to sustainable growth, MODON also planted over 576,000 trees and finalized 335 logistics contracts, underscoring its broader environmental and economic development objectives.
2.25m freelancers in Saudi Arabia join national economy
- The 25— 34 age group is particularly active in freelancing
- 62% of freelancers hold bachelor’s degrees
JEDDAH: Freelancing is emerging as a key contributor to Saudi Arabia’s economy, with over 2.25 million individuals registered on the freelance platform by September.
This growth reflects the rising popularity of flexible work, supported by the Ministry of Human Resources and Social Development’s launch of the “Future Work” company in 2019 to enhance the freelancing ecosystem by promoting modern workstyles, including remote work and flexible-hour freelancing.
The company’s mission is to create more job opportunities, empower Saudi talent, and develop a labor market that complements traditional employment while aligning with global trends, according to the Saudi Press Agency.
Freelancers make a notable contribution to Saudi Arabia’s economy. In 2023, the sector contributed SR72.5 billion ($19 billion) to the gross domestic product, representing 2 percent of the Kingdom’s total output. This highlights its role in diversifying income sources and strengthening the national economy.
The initiative, along with other efforts, has contributed to reducing the Kingdom’s unemployment rates. Saudi Arabia has revised its unemployment target to 5 percent by 2030, down from the previous goal of 7 percent, as part of Vision 2030’s ambitions.
The progress was highlighted by Minister of Human Resources and Social Development Ahmed Al-Rajhi during a panel discussion at the Budget Forum 2024 in November, where he detailed the Kingdom’s strides in improving employment figures. Al-Rajhi said that the unemployment rate among Saudis was 12.8 percent in 2018, and it has recently dropped to 7.1 percent.
The Ministry of Human Resources and Social Development issues freelance certificates to individuals specializing in specific fields, enabling them to work independently in activities approved by the ministry through the official freelance portal.
A recent report from Future Work highlights the sector’s rapid development and its alignment with Vision 2030. The report also emphasizes the diverse nature of freelance activities, with trade and retail leading at 38 percent, followed by industry at 13 percent and business services at 11 percent. The diversity demonstrates the sector’s adaptability to meet various economic needs.
Freelancing accommodates individuals with different educational backgrounds. According to the report, 62 percent of freelancers hold bachelor’s degrees, while 31 percent have high school diplomas or less, and 7 percent possess higher degrees.
Technology plays a pivotal role in the sector’s growth, with digital platforms becoming indispensable for freelancers, especially in fields like technology, information, and finance. These tools enhance productivity and connectivity, fostering sustainability and success in freelance careers.
Geographically, the Riyadh region accounts for the largest share of freelancers at 27 percent, followed by Makkah at 22 percent, and the Eastern Province at 14 percent.
The 25— 34 age group is particularly active in freelancing, reflecting the younger generation’s growing interest in this flexible career path.
The report said that 3.2 million women have expressed interest in joining the freelance market, underscoring the effectiveness of initiatives aimed at enabling women to balance professional and personal commitments.
Government programs like Reef, the Social Development Bank, and the Human Resources Development Fund further support freelancers by fostering an environment conducive to their growth and success, SPA reported.
Saudi Arabia’s food & beverage sales drive $3.14bn in consumer spending
- Restaurants and cafes topped the list with SR1.69 billion in transactions: SAMA data
RIYADH: Saudi Arabia’s consumer spending reached SR11.8 billion ($3.14 billion) in the week of Dec. 15 to Dec. 21, with the food and beverage sectors continuing to lead in sales, official data showed.
Despite a slight overall decline of 8.1 percent from the previous week, key sectors, especially dining and food, showed consistent performance, according to data from the Saudi Central Bank, also known as SAMA.
The restaurants and cafes sector topped the list with SR1.69 billion in transactions, despite a 13.9 percent weekly dip. Food and beverage spending followed closely, settling at SR1.69 billion as well, reflecting a 9 percent decrease. These categories, however, maintained their dominance in consumer expenditure.
The overall decrease in consumer spending is attributed to the timing of salary disbursements, traditionally paid on the 27th of each month, which typically leads to lower spending in the preceding weeks.
Additionally, the winter holiday season, during which many expatriates travel home, further influenced the dip in domestic spending.
Other sectors saw more moderate drops. The value of clothing and footwear transactions fell by 5.2 percent to SR864.15 million, while construction and building materials recorded a small 0.9 percent decline, totaling SR355 million.
The electronics and electric devices sector saw an 8.7 percent weekly decrease in value, while gas stations and health-related sales also experienced declines of 9.4 percent and 7.3 percent, respectively.
Jewelry sales recorded a 14.4 percent drop in transaction volumes, with a slight 3.9 percent decrease in value. Miscellaneous goods and services saw a 9.1 percent reduction in sales, totaling SR1.4 billion.
Regional breakdown
Regionally, Riyadh remained the largest market with a POS value of SR4.2 billion, although this represented a 6 percent decrease compared to the previous week.
Jeddah saw a 7.5 percent drop to SR1.6 billion, while Dammam recorded a slight 3.6 percent decline to SR617.5 million.
Among smaller cities, Hail experienced the largest decrease, with spending down 14.8 percent to SR169.6 million, and a 12.2 percent reduction in transaction volumes. Makkah recorded a 4.4 percent decline in value, settling at SR502.8 million, while Tabuk saw a 12.8 percent decrease in transaction value to SR210.4 million.
Despite the seasonal slowdown, the food and beverage sectors continue to drive the market, maintaining a steady pace as consumer behavior shifts with the winter season.
Saudi Arabia leverages project management to achieve Vision 2030 milestones
RIYADH: In Saudi Arabia’s pursuit of the ambitious goals set out in Vision 2030, project management has emerged as a key enabler, ensuring that planning aligns seamlessly with execution to achieve transformative outcomes.
This vital discipline is playing a crucial role in turning visionary ideas into reality, as highlighted during a prominent forum held on Tuesday.
The event emphasized the central role of project management in realizing Vision 2030, a comprehensive framework launched in 2016 by Crown Prince Mohammed bin Salman.
The vision aims to diversify the economy and reduce the Kingdom’s dependence on oil. Currently, over 5,000 projects, valued at $5 trillion, are underway, signaling Saudi Arabia's substantial progress in reshaping both its economic and social landscapes.
“Project management is the bridge where vision meets ambition, converting plans into tangible results,” said Badr Burshaid, chairman of the Global Project Management Forum.
He also pointed to the Kingdom's significant investment in human capital, particularly through initiatives such as the Human Capability Development Program, which has placed Saudi Arabia among the top 10 nations globally in equipping professionals with essential business skills.
The forum highlighted the importance of strategic execution in driving economic transformation.
Badr Al-Dulami, deputy minister of transport and logistics services for roads affairs, described project management as the “pulse of transformation,” underscoring its role in fostering competitiveness and innovation.
“This summit is not just an event but a platform for uniting expertise and driving collaboration,” Al-Dulami said.
During the forum, excellence awards were presented to pioneering projects that exemplify Vision 2030’s focus on innovation, sustainability, and impactful outcomes.
Al-Dulami noted that these awards serve as an invitation to explore new horizons of creativity while staying aligned with national objectives.
Saudi Arabia’s success under Vision 2030 is evident across several key sectors. With 87 percent of initiatives either completed or on track, the Kingdom has made significant strides in improving its business environment, generating employment, and advancing major projects like NEOM and the Red Sea Project.
These achievements not only demonstrate Saudi Arabia’s strategic capabilities but also highlight its leadership in executing large-scale initiatives.
In closing, Burshaid urged participants to harness the insights and momentum gained from the forum to ensure continued progress.
“The seeds planted today will grow into achievements that inspire future generations,” he said, encouraging stakeholders to prioritize innovation and collaboration as Saudi Arabia moves forward.
With project management at the heart of Vision 2030, Saudi Arabia is setting a global benchmark for strategic execution and sustainable development, solidifying its role as a leader in transformative growth.
Egypt and Jordan discuss collaborations in natural gas
- Two parties explored ways to exploit shared expertise and resources
- It aligns with both countries’ national security and sustainable development strategies
RIYADH: Cooperation in energy and natural gas between Egypt and Jordan is set to grow as the North African country’s Minister of Petroleum and Mineral Resources Karim Badawi met with the Jordanian Minister of Energy and Mineral Resources, Saleh Kharabsheh.
The talks at the Ministry of Energy and Mineral Resources in Amman revolved primarily around diversifying energy sources and propelling natural gas projects, the Jordanian news agency Petra reported.
This aligns with both countries’ national security and sustainable development strategies.
During the meeting, the two parties explored ways to exploit shared expertise and resources to implement future projects that are projected to yield positive economic returns and further strengthen regional cooperation.
The meeting came during Badawi’s visit to Jordan, during which he assessed the plans and operations of the Jordanian-Egyptian Fajr Co. in developing the natural gas infrastructure in Jordan.
The visit underlined the strategic importance of the 500-kilometer main gas network stretching from southern to northern Jordan.
Badawi also evaluated the progress in enhancing the network’s capacity and related facilities during his stay.
The Egyptian minister reviewed the current and upcoming projects by Egyptian petroleum sector companies planned for implementation in Jordan.
He highlighted the importance of accelerating these initiatives to maximize the economic and environmental benefits of natural gas use across various sectors in Jordan.
Badawi’s visit to Jordan underscores the strong ties and fruitful collaboration between the two nations.
