INTERVIEW: KAUST’s plan to recreate classical Islam’s ‘House of Wisdom’

Illustration by Luis Grañena
Updated 28 October 2019
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INTERVIEW: KAUST’s plan to recreate classical Islam’s ‘House of Wisdom’

  • Tony Chan, president of the King Abdullah University of Science and Technology, explains its role in advancing human knowledge — and in supporting the Vision 2030 transformation

DUBAI: The King Abdullah University of Science and Technology (KAUST) throws up some big surprises on a visit to the campus, an hour’s drive north of Jeddah.

Expecting a white-hot furnace of high technology — what staff call the “deep tech heart of the Saudi Arabian economy” — you find yourself marveling at replicas of 1,000 year old inventions — navigational instruments, hydraulic systems and sophisticated chronometers — from the golden age of Islamic learning, in the campus museum.

That juxtaposition is entirely deliberate and appropriate, as Tony Chan, president of KAUST for the past year, explained. “The idea was to recreate the Bayt Al-Hikmah — the House of Wisdom — of classical Islam’s golden age, and to contribute to human civilization,” he said.

Chan, of Hong Kong origin and with a prodigious career mainly spent at US institutions, has been involved with KAUST since before it was formally inaugurated just over 10 years ago, and is in a unique position to describe its long heritage, as well as its modern role as an intellectual power-house for the big changes across the Kingdom’s economy, society and culture as the Vision 2030 strategy progresses.

In some ways, KAUST’s establishment was a herald of the current transformation. It was the first coeducational institutional facility in Saudi Arabia, where women did not have to wear traditional clothing on campus, could drive and watch movies at a cinema alongside men, years before those advances came to the Kingdom.

“We are like a beacon to the world,” said Chan, in reference to the symbolic lighthouse structure that overlooks the KAUST marina on the Red Sea.

With these modern facilities, its cosmopolitan population and its emphasis on technology, the site is reminiscent of the Saudi Aramco “camp” in Dhahran — the American-built town that housed the first foreign oil workers in the 1950s.

Originally funded by a $20 billion government endowment, the project was handed over to Ali Al-Naimi, the former Aramco chief executive and Saudi energy minister, to oversee. Chan says that Aramco built the main part of the campus in 1,000 days, in time for the 2009 opening.

“KAUST has Aramco in its DNA in terms of organizational structure and culture, adapted to an academic environment,” he said.

Aramco is one of the corporates — along with the likes of SABIC, the US chemical company Dow and the aerospace group Boeing — with a presence on the campus. KAUST is as much an environment intended to cultivate entrepreneurial innovation as an institute of learning.

“There is a strong business emphasis here, in terms of encouraging startups and entrepreneurial talent. There is a two-way emphasis — to advance research and education, and to facilitate economic development and human capital, in line with Vision 2030,” Chan said.

Some 2,000 would-be Saudi entrepreneurs pass through the university each year, emerging equipped to play a role in the Kingdom’s fast-changing economy. Research has shown that as many as 30 percent of young citizens want to start their own businesses, rather than go for the traditional jobs in the public sector. KAUST plays a vital tole in encouraging and nurturing this young talent.

It is not a university in the traditional sense, with an annual influx of fresher undergraduates. All of the 1,100 students on campus are postgraduates, as well as 337 research scientists, under the supervision of 159 faculty members on the site at Thuwal.

That environment is designed to encourage intellectual innovation, and to back up the megaprojects under way in Saudi Arabia under Vision 2030.

Because of its location, KAUST is particularly involved in the two big projects in the area — the Red Sea development and NEOM.

The former — underway a couple of hundred kilometers north on the coast — is one of the most ambitious ventures ever taken in leisure and high-end tourism. It will be a self-sustaining resort the size of Belgium, designed to give global and regional visitors a taste of the Kingdom’s seldom-seen ecological and cultural heritage.

“We are working on four areas with them — energy, environment, food and water. And we are involved in their digital aspects too. These are global issues of course, but they are all of especial interest to the Kingdom,” Chan said.

Some of the work with the Red Sea Project is truly groundbreaking, with applications all over the world, he explained. “Sea plants — kelp, seaweed and the rest — are better at absorbing carbon than land plants, so that could provide a solution to global environmental challenges.

One focus of KAUST’s work in the Red Sea involves the project to reduce salinity in the area, a big issue for the Kingdom because of the high levels of salt produced in the water desalination industry. The “brains for brine” initiative could have truly global impact. 

KAUST’s work also has big significance in energy issues. “We’re looking at ways to analyze the wind patterns across the Red Sea, because if you are going to use wind power as a significant part of your renewable commitment, you need to know how the wind works in that particular region,” he said.

“We have a big focus on energy — not just petroleum, but solar and other renewables. Oil is not going away any time soon, but we have to be conscious of the effects of climate change, which affects the Kingdom more than most others,” Chan said.

“Clean combustion is the big thing. We have a research partnership with McLaren, working on fuel mix and aerodynamics to make engines more efficient, and with Volvo and others in our ‘clean combustion’ center,” he added.

A former president of the university — Chan’s predecessor Nadhmi Al-Nasr — is chief executive of NEOM, and the links with KAUST run deep. “NEOM is different from the Red Sea. It’s not a leisure resort so there are far more artificial intelligence, digital and educational angles to it. There is a NEOM centre at KAUST, and I sit on NEOM’s high commission. We have contributed lots of people and talent to NEOM and several run the different sectors involved in the project,” Chan said.

Another major activity at KAUST involves the preparations for the G20 Summit next year, which the Kingdom is staging, the first time the gathering or world leaders will be held in the Middle East. Chan is involved in the scientific sub-grouping of the G20, the so-called S20, and he sees the event, which will take place next November, as a pivotal moment in its history.

“We have become a think tank within the G20 preparations, in the S20 group, working mainly on energy and climate matters. We have the expertise. The Kingdom, and the world, need the expertise. The whole of the Saudi government is involved in the G20 preparations — it will be like a coming out party for the Kingdom,” he said.

Chan’s background encompassed some of the biggest academic institutions in Asia and the US, and he is especially keen to attract global talent to be part of the KAUST community, which has 100 nationalities in the 7,300-strong campus site.

“It has not been hard to attract talent. Usually, the most difficult part is to get prospective talent to make the first visit. I have seen no reaction to the death of Jamal Khashoggi. We are still recruiting from the US and the rest of the world, and there has been no adverse affect from that tragic event,” Chan said.

Attracting that talent will help achieve Chan’s goal — to make KAUST a center of academic excellence along the lines of the biggest and best-known institutions in the world. How will he know when he has achieved that?

“It is not just about ranking in the academic league tables, although that is part of it. We focus on talent development, and on knowledge —adding to the sum of human knowledge. But we do very well on the criteria of ‘citation by faculty,’” he said.

“The most important measure of our success is by the achievements of our alumni. Why are Oxford and Cambridge regarded as so successful? Because Oxford turns out more prime ministers than any other university, and Cambridge more Nobel Prize winners.

“We are still a very young organization. The oldest of our alumni is still under 40, so it will take a while to get the professional recognition. But I am confident it will come.”


SABIC, Almarai, SEC able to absorb fuel price hike: S&P Global

Updated 09 January 2025
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SABIC, Almarai, SEC able to absorb fuel price hike: S&P Global

RIYADH: Major Saudi companies, including chemical company SABIC, dairy firm Almarai, and Saudi Electric Co., are well-positioned to handle the impact of higher fuel and feedstock prices introduced on Jan. 1, according to a new report.

Released by capital market economy firm S&P Global, the analysis reveals that those corporates will be able to absorb the marginal increase in production costs by further improving operational efficiencies as well as potentially via pass-through mechanisms.

This came after Saudi Aramco increased diesel prices in the Kingdom to SR1.66 ($0.44) per liter, effective Jan. 1, marking a 44.3 percent rise compared to the start of 2024. The company has kept gasoline prices unchanged, with Gasoline 91 priced at SR2.18 per liter and Gasoline 93 at SR2.33 per liter.

Despite the hike, diesel prices in Saudi Arabia remain lower than those in many neighboring Arab countries. In the UAE and Qatar, a liter of diesel is priced at $0.73 and $0.56, respectively, while in Bahrain and Kuwait, it costs $0.42 and $0.39 per liter.

“For SABIC and Almarai, the increase in feedstock prices will not affect profitability significantly. In the case of utility company, SEC, additional support will likely come from the government if needed,” the report said.

The capital market economy firm projects that SABIC will continue to outperform global peers on profitability.

“We don’t expect the rise in feedstock and fuel prices to materially affect profitability, since the company estimates it will increase its cost of sales by only 0.2 percent,” the report said.

It further highlighted that SABIC is considered a government-related entity with a high possibility of receiving support when needed.

The report also underlines that Almarai anticipates an additional SR200 million in costs for 2025, driven by higher fuel prices and the indirect effects of increased expenses across other areas of its supply chain.

“We believe Almarai will continue focusing on business efficiency, cost optimization, and other initiatives to mitigate these impacts,” the release stressed.

With regards to SEC, S&P said that an unrestricted and uncapped balancing account provides a mechanism for government support, including related to the higher fuel costs.

“We believe any increased fuel cost will be covered by this balancing account,” the report said.

The study further highlights that the marginal increase “could significantly affect wider Saudi corporations’ profit margins and competitiveness.”

The S&P data also suggests that additional costs will be reflected in companies’ financials from the first quarter of 2025.

“Saudi Arabia is continuing its significant and rapid transformation under the country’s Vision 2030 program. We expect an acceleration of investments to diversify the Saudi economy away from its reliance on the upstream hydrocarbon sector,” the report said.

“The sheer scale of projects — estimated at more than $1 trillion in total — suggests large funding requirements. Higher feedstock and fuel prices would help reduce subsidy costs for the government, with those savings potentially redeployed to Vision 2030 projects,” it added.


Lenovo to produce ‘Saudi Made’ PCs by 2026 following $2bn Alat deal closure

Updated 09 January 2025
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Lenovo to produce ‘Saudi Made’ PCs by 2026 following $2bn Alat deal closure

RIYADH: Chinese tech giant Lenovo is set to manufacture millions of computer devices in Saudi Arabia by 2026, following the completion of a $2 billion investment deal with Alat, a subsidiary of the Public Investment Fund. 

First announced in May, the partnership has now received shareholder and regulatory approvals, paving the way for Lenovo to establish a regional headquarters and a manufacturing facility in the Kingdom. 

The deal marks a significant step in aligning Lenovo’s growth ambitions with Saudi Arabia’s Vision 2030 goals of economic diversification, innovation, and job creation, the company said in a press release. 

The factory will manufacture millions of PCs and servers every year using local research and development teams for fully end-to-end “Saudi Made” products and is expected to begin production by 2026, it added. 

“Through this powerful strategic collaboration and investment, Lenovo will have significant resources and financial flexibility to further accelerate our transformation and grow our business by capitalizing on the incredible growth momentum in KSA and the wider MEA region,” Yang said. 

He added: “We are excited to have Alat as our long-term strategic partner and are confident that our world-class supply chain, technology, and manufacturing capabilities will benefit KSA as it drives its Vision 2030 goals of economic diversification, industrial development, innovation, and job creation.” 

Amit Midha, CEO of Alat, underscored the significance of the partnership for both Lenovo and the Kingdom. 

“We are incredibly proud to become a strategic investor in Lenovo and partner with them on their continued journey as a leading global technology company,” said Midha. 

“With the establishment of a regional headquarters in Riyadh and a world-class manufacturing hub, powered by clean energy, in the Kingdom of Saudi Arabia, we expect the Lenovo team to further their potential across the MEA region,” he added. 

The partnership is expected to generate thousands of jobs, strengthen the region’s technological infrastructure, and attract further investment into the Middle East and Africa, according to the press release. 

In May, Lenovo raised $1.15 billion through the issuance of warrants to support its future growth plans. The initiative, which was fully subscribed by investors, signals confidence in Lenovo’s strategic approach and its plans for global expansion. 

The investment deal was advised by Citi and Cleary Gottlieb Steen & Hamilton for Lenovo, while Morgan Stanley and Latham & Watkins represented Alat. 


Lebanon’s bonds climb as parliament elects first president since 2022

Updated 09 January 2025
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Lebanon’s bonds climb as parliament elects first president since 2022

LONDON: Lebanon’s government bonds extended a three-month long rally on Thursday as its parliament voted in a new head of state for the crisis-ravaged country for the first time since 2022.

Lebanese lawmakers elected army chief Joseph Aoun as president. It came after the failure of 12 previous attempts to pick a president and the move boosts hopes that Lebanon might finally be able to start addressing its dire economic woes.

Lebanon’s battered bonds have almost trebled in value since September when the regional conflict with Israel weakened Lebanese armed group Hezbollah, long viewed as an obstacle to overcoming the country’s political paralysis.

Most of Lebanon’s international bonds, which have been in default since 2020, rallied after Aoun’s victory was announced to stand between 0.8 and 0.9 cents higher on the day and at nearly 16 cents on the dollar.

They have also risen almost every day since late December, although they remain some of the lowest priced government bonds in the world, reflecting the scale of Lebanon’s difficulties.

With its economy still reeling from a devastating financial collapse in 2019, Lebanon is in dire need of international support to rebuild from the war, which the World Bank estimates to have cost the country $8.5 billion.

 


Closing Bell: Saudi main index closes in green at 12,097

Updated 09 January 2025
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Closing Bell: Saudi main index closes in green at 12,097

RIYADH: Saudi Arabia’s Tadawul All Share Index rose on Thursday, gaining 9.01 points, or 0.07 percent, to close at 12,097.75. 

The total trading turnover of the benchmark index was SR7.48 billion ($1.99 billion), as 96 stocks advanced, while 133 retreated.    

The MSCI Tadawul Index decreased by 3.28 points, or 0.22 percent, to close at 1,510.14. 

The Kingdom’s parallel market, Nomu, surged, gaining 251.24 points, or 0.82 percent, to close at 31,027.39. This comes as 56 of the listed stocks advanced, while 32 declined. 

The best-performing stock was Nice One Beauty Digital Marketing Co. for the second day in a row, with its share price increasing by 7.69 percent to SR49. 

Other top performers included Fawaz Abdulaziz Alhokair Co., which saw its share price rise by 6.5 percent to SR14.74, and Abdullah Saad Mohammed Abo Moati for Bookstores Co., which saw a 4.42 percent increase to SR35.45. 

Arabian Pipes Co. and Dr. Sulaiman Al Habib Medical Services Group also saw positive change with their share prices moving up by 4.10 percent and 3.89 percent to SR12.70 and SR298.80, respectively. 

The worst performer of the day was Salama Cooperative Insurance Co., whose share price fell by 5.88 percent to SR19.52. 

Almoosa Health Co. and Al Hassan Ghazi Ibrahim Shaker Co. also saw declines, with their shares dropping by 5.13 percent and 3.91 percent to SR133.20 and SR28.25, respectively.   

On the announcements front, Riyad Bank declared its intention to fully redeem its $1.5 billion fixed-rate reset tier 2 sukuk, issued in February 2020, on Feb. 25, 2025.  

According to a Tadawul statement, the sukuk originally maturing in 2030, will be redeemed at face value in accordance with the terms and conditions. The redemption, approved by the regulators, will include any accrued but unpaid periodic distributions.  

On the redemption date, Riyad Sukuk Limited will deposit the full amount into the accounts of sukuk holders, marking the completion of the issuance. This redemption will conclude the sukuk’s life, with no remaining value post-redemption. 

Riyad Bank ended today’s trading session edging up by 0.91 percent to SR27.85.


Rotana eyes growth in smaller Saudi cities amid hospitality expansion

Updated 09 January 2025
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Rotana eyes growth in smaller Saudi cities amid hospitality expansion

RIYADH: Rotana Hotels is turning its attention to smaller cities in Saudi Arabia as part of its ambitious growth strategy to strengthen its presence in the Kingdom. 

Speaking on the sidelines of the third Saudi Tourism Forum, the firm’s Chief Operating Officer Eddy Tannous told Arab News the company is engaging with tourism authorities, development funds, and private investors to explore opportunities in emerging destinations such as Al-Baha and Asir.

Rotana has previously announced its plans to develop nine new properties in Saudi Arabia, five of which are scheduled to open in 2025. This follows the launch of three hotels in 2024, including Nova M, the first Edge by Rotana property, as well as Dar Rayhaan by Rotana in Alkhobar and Al Manakha Rotana in Madinah.

Tannous said: “We have development on properties that will probably open in the next, I want to say, two to five years. Probably six to eight properties in those tertiary cities where it’s becoming a destination that people want to go to as well.”

With Saudi Arabia ranking third globally for international tourist arrival growth in 2024, with a 25 percent increase compared to the previous year, the Kingdom’s hospitality sector is seeing rapid growth.

The company’s goal is to triple its current key count in the Kingdom to 6,000 within the next three years, bolstered by strong demand for hospitality services.

Rotana’s upcoming developments, including Yasmina Rayhaan by Rotana in Riyadh, aim to meet this increasing demand.

“We are a regional brand. We are a brand that grew up in this region, so Saudi Arabia has always been a focus for us. But I think with the announcement of Vision 2030, it became more of a catalyst for us to continue focusing on Saudi Arabia,” Tannous said.

He added: “Saudi Arabia is the region or is the country in this Middle East region that’s growing the fastest and that’s growing with the biggest magnitude from a hospitality standpoint. Our main focus in Saudi Arabia is to focus both on the government sector projects and individual investors.”

Rotana’s expansion strategy is also geared toward major international events, including Saudi Arabia’s hosting of the FIFA World Cup in 2034. This event is expected to attract millions of visitors, creating significant opportunities for the hospitality sector.

Commenting on the company’s plans, Rotana CEO Philip Barnes said in a press release: “We see tremendous potential for expansion in Saudi Arabia. Our ambitious pipeline for KSA underscores our commitment to the hospitality and tourism sectors, both in the Kingdom and regionally, as demand for business and leisure travel soars to new heights in anticipation of major events such as the FIFA World Cup 2034.”

Beyond Saudi Arabia, Rotana is expanding across the Middle East, Africa, Eastern Europe, and Turkiye, where it currently operates 81 properties. The company has a pipeline of 36 new properties in 22 cities, including its projects in Saudi Arabia.

Rotana is also strengthening its presence in key markets such as the UAE, Turkiye, and Africa, where demand for leisure and business travel is on the rise.

“As a company today, we run 86 properties in the world. Some of our source markets to Dubai and Abu Dhabi, which are two of our biggest markets, include the UK, Germany, and Russia,” Tannous said.

Rotana is also preparing for significant updates to its loyalty program, which are expected to be announced later this year — although details remain under wraps.

“It’s not something I can talk about today, but we will hopefully in 2025,” Tannous said. “The most exciting thing for me right now is what we’re doing on our loyalty program because that will open the door for bank partnerships, credit card partnerships, airline partnerships.”

Rotana’s expansion in Saudi Arabia and beyond reflects its commitment to meeting the growing demand for hospitality services while positioning itself as a leader in both regional and international markets.