Saudi Arabia aims for global logistics hub status by 2030 with tech investments
Saudi Arabia aims for global logistics hub status by 2030 with tech investments /node/2575122/business-economy
Saudi Arabia aims for global logistics hub status by 2030 with tech investments
Abdullah Al-Dubaikhi, assistant minister at the Ministry of Investment, highlighted the Kingdom’s efforts to train a workforce capable of adapting to the sector’s technological advancements.
Saudi Arabia aims for global logistics hub status by 2030 with tech investments
Updated 14 October 2024
Nirmal Narayanan
RIYADH: The King Salman International Airport Development Co., a Saudi wealth sovereign fund-owned company, announced it had signed an agreement with ewpartners, a firm specializing in private investment, strategic alliances, and asset initiatives.
The partnership with the Public Investment Fund aims to leverage Saudi Arabia’s location as a link between three continents to drive growth and enhance operational excellence in the logistics sector, reported the Saudi Press Agency.
The parties will explore establishing an economic center for e-commerce and distribution, which is one of the hubs announced by the Ministry of Transport and Logistics Services.
This initiative aims to improve supply chains and facilitate investment and trade, thereby achieving the goals of the National Transport and Logistics Strategy and the objectives of Saudi Vision 2030.
The agreement strives to establish a logistics center at King Salman International Airport, designed to strengthen distribution management ties between China and Saudi Arabia.
This will play a significant role in positioning the Kingdom as a key regional hub for air freight, as per SPA.
The center is expected to enhance the efficiency and capabilities of distribution at the regional and international level, establishing the airport as a global logistics hub and reflecting the strategic role of Saudi Arabia in global services.
Marco Mejia, the acting CEO of KSIADC, commented that this partnership represents an important step toward realizing its vision of making KSIA a primary logistics center that serves regional and global companies and supports the country’s trade expansion.
He added: “Through our collaboration with ewpartners, we aim to enhance the Kingdom’s logistical infrastructure, increase operational efficiency, and create new opportunities that contribute to economic growth in the Kingdom and the region.”
Jerry Li, founder and managing partner of ewpartners, highlighted that the strategic location of the airport, along with its extensive regional commercial capabilities, will open new avenues for growth and innovation in the logistics and e-commerce sectors in the Kingdom.
The news agency underlined that partners would work to enhance various areas, including infrastructure, digital services, advanced manufacturing, and logistics.
Wake up and smell the climate crisis: coffee prices set to increase in 2025
Price rises come as the global coffee industry battled a perfect storm of challenges, with climate change, supply chain disruptions, and global market forces all having an impactThe price rises came as the global coffee industry battled a perfect stor
Updated 5 sec ago
MIGUEL HADCHITY
RIYADH: It is the caffeine, not the cost, of a morning coffee that is supposed to help you shake off any lingering sleepiness, but the world’s wake-up drink of choice is set to get more expensive in 2025.
December saw the cost of Arabica beans hit a record high on the global commodities market, while Robusta prices nearly doubled in 2024, reaching $5,694 a tonne by late November.
The price rises came as the global coffee industry battled a perfect storm of challenges, with climate change, supply chain disruptions, and global market forces all having an impact.
It is against this backdrop that Saudi Arabia is looking to expand its involvement in the sector, with the Middle East consuming more than its fair share of the product.
The International Coffee Organization estimated that 6.3 million 60-kg bags of coffee were drunk in the Middle East in the year 2022/23 – 3.6 percent of the world’s consumption.
“The region’s population is 196 million, or 2.6 percent of the world’s population. The region is consuming above its share,” the organization noted.
Dock No, statistical coordinator with the Secretariat of the ICO, highlighted that Saudi Arabia became the second country in the Middle East to become a member of the International Coffee Organization, when the country signed the International Coffee Agreement in February.
“The coffee sector in Saudi Arabia is growing fast and is an important part of our plans for the future and the change we wish to bring to our country as it contributes to diversifying the national economy,” No said.
The coffee organization highlighted the Saudi Coffee Co., a new venture launched by the Kingdom’s Public Investment Fund. With a $319 million investment over 10 years, the company aims to significantly expand Saudi Arabia’s coffee production from 300 tonnes annually to 2,500 tonnes.
This growth will be driven by a focus on sustainability throughout the coffee supply chain, from production to distribution and marketing.
“Varieties are a key tool for any agricultural system, and improved varieties will contribute to productive climate resilient coffee systems in Saudi Arabia, just like anywhere else,” Long said.
A global challenge
Andrew Hetzel, a coffee and high-value agriculture specialist, told Arab News that climate change, particularly prolonged droughts and unpredictable weather patterns, is directly affecting bean crops.
Brazil, which primarily produces arabica, and Vietnam, which is the largest robusta producer, are experiencing unseasonably dry weather, leading to lower yields and quality for the 2024/25 season.
The South American country is also the second-largest robusta producer, and has faced crop yield losses due to unusually dry weather in key growing regions. No also noted the country’s vulnerability to past extreme events like the frost of July 2021 that affected its crop.
Hetzel said: “Brazil is the most sophisticated agribusiness producer of coffee as a nation, but even they do not irrigate all of their fields.”
CEO of World Coffee Research, Jennifer Vern Long emphasized in an interview with Arab News the urgency of increasing coffee productivity globally to meet growing demand.
She said: “Improving productivity doesn’t just ensure the supply of coffee can keep up with demand, it also decreases carbon emissions from coffee farming.”
Long further explained that current investments in coffee agricultural R&D, which stand at only $115 million per year, are far too low for a sector with such global significance.
This surge in robusta prices is driven by a mix of climate-related challenges, geopolitical issues, and tightening supply chains.
In Vietnam production is expected to fall by 10 percent for the 2023/24 season, and the ICO’s No told Arab News that Vietnam’s local markets have reported domestic stocks running low.
Adding to these pressures is the disruption of key global trade routes. The Red Sea crisis has heavily impacted shipping, particularly for exports from Vietnam and Indonesia to Europe.
Roasters are now grappling with longer shipping times and higher costs due to rising insurance premiums and intense competition for container space.
As a result, robusta inventories are plummeting. By January 2024, certified robusta stocks had dropped to 0.48 million 60-kg bags, a sharp 15.4 percent decline on the previous month, according to a report by the ICO.
The ICO’s coordinator explained that coffee stocks in Europe have fallen by almost half since 2021, reducing from 15.5 million 60-kg bags to 8.7 million.
Hetzel said some coffee prices are still being impacted from the COVID-19 pandemic, pointing to its effects on transport costs. “The cost of ocean freight from Indonesia to North America quadrupled as exporters fought for empty containers and ship bookings. Container shortages persist today,” he said.
No added that shipping disruptions through the Suez and Panama canals in the past 12 months have only exacerbated these logistical issues, forcing coffee exporters to take longer routes, which added to the cost.
Though green coffee bean exports saw a 12.6 percent increase in December 2023 compared to the previous year, this short-term boost is unlikely to ease the growing strain on supply.
Innovation needed to address coffee’s sustainability crisis
A recent report by World Coffee Research set out how the sector faces an innovation crisis that requires urgent attention, particularly in the wake of climate change.
The organization’s CEO explained that a significant increase in global investment — around $452 million per year — is required over the next decade to meet rising demand while mitigating climate-related yield losses.
The report emphasized that climate change is reducing coffee origin diversity and endangering smallholder production. This, combined with rising demand, could further destabilize the industry if not addressed.
Hetzel also underscored the vulnerability of smallholder farmers, particularly in developing regions. “The vast majority of coffee production is in fragile states that are highly susceptible to climate change,” he said, adding that many smallholder farmers are likely to be severely impacted by economic losses, leading to food insecurity, conflict, and out-migration.
How climate change will continue to drive up prices
Compounding these issues is the broader impact of climate change. The recent declaration of an El Nino weather event by the US Climate Prediction Center is expected to bring more drought to Vietnam and excessive rains to Brazil, further threatening coffee production.
Meanwhile, the war in Ukraine has driven up fertilizer prices and energy costs, adding to the financial burden on coffee growers and roasters alike. As Hetzel noted: “The war in Ukraine has increased energy costs downstream from the farm – transportation, roasting, and distribution costs have all risen.”
No also highlighted the broader effects of inflation and rising input costs on coffee producers, particularly those in the Americas dealing with seasonal labor shortages.
According to the WCR report, increased global investment is essential to ensure the long-term viability of coffee producers. Long warned that without action, the industry will continue to experience supply constraints and rising prices.
For the global coffee industry, navigating this turbulent environment requires vigilance and greater investment in innovation. As supply constraints and climate events continue to unfold, traders, roasters, and consumers alike are bracing for what could be a prolonged period of high coffee prices.
Saudi Arabia emerging as global cybersecurity guardian: digital experts
Updated 20 December 2024
Nadin Hassan
RIYADH: From protecting its growing digital infrastructure to exporting cybersecurity technologies and expertise, Saudi Arabia is emerging as a key player in addressing global cyber threats.
The Kingdom has made significant strides in developing its technology infrastructure, a key pillar of its Vision 2030 initiative aimed at diversifying the economy beyond oil.
This digital transformation has been accompanied by a comprehensive approach to online safety – including the adoption of the National Cybersecurity Strategy, which focuses on creating a secure digital landscape that supports rapid technological advancements.
“The growth of Saudi Arabia’s tech infrastructure has substantially enhanced its cybersecurity capabilities,” Sohil Mohamed, director, cyber risk advisory lead at Alvarez & Marsal told Arab News.
He praised the National Cybersecurity Strategy, saying that it prioritizes resilience, secure digital landscapes, and trust.
This strategic approach ensures that Saudi Arabia’s technological growth is supported by adaptive risk management and dynamic defense mechanisms.
In addition to the government’s efforts, the private sector has also played a critical role in building a secure digital ecosystem.
The expanding cybersecurity market in Saudi Arabia
As one of the fastest-growing markets in the Middle East, Saudi Arabia’s cybersecurity sector is valued at approximately SR13.3 billion.
This rapidly expanding market offers substantial opportunities for public-private partnerships, particularly in developing advanced cybersecurity solutions and creating new business models for commercial involvement.
Additionally, the Saudi government’s focus on digital transformation and cybersecurity has opened new avenues for investment.
“Key areas of focus include the development of advanced cybersecurity solutions, engagement in public-private partnerships, and contributions to national initiatives such as the Cybersecurity Catalyst Program spearheaded by the National Cybersecurity Authority,” Mohamed said.
These initiatives are driving a collaborative effort between the public and private sectors to strengthen the Kingdom’s cyber resilience.
Saudi Arabia’s investment in the sector also positions it as a key player in the global cybersecurity market.
The government has partnered with international organizations and cybersecurity firms to enhance its capabilities and bolster the country’s readiness to handle large-scale cyber threats.
This proactive stance is evident in Saudi Arabia’s role as host of major events, such as the Global Cybersecurity Forum, which brings together industry leaders.
Sohil Mohamed, director, cyber risk advisory lead at Alvarez & Marsal. Supplied
Protecting national infrastructure – a key priority
Critical Information Infrastructure Protection has become a top priority for Saudi Arabia as it seeks to secure vital sectors, such as energy, finance, and transportation, from cyber threats.
The Kingdom has experienced several high-profile cyberattacks, most notably the Shamoon attack in 2012, which targeted Saudi Aramco, one of the world’s largest energy companies.
This incident underscored the importance of building robust cybersecurity measures to protect national assets.
Saudi corporations are increasingly focused on quantifying the economic impact of potential cyberattacks, particularly in industries that form the backbone of the national economy.
“Saudi corporations are progressively implementing sophisticated risk assessment tools and methodologies to quantify the economic impact of cyber threats,” Mohamed said.
He explained that this includes evaluating potential financial losses, operational disruptions, and reputational damage from cyber incidents.
Additionally, cyber insurance is becoming a critical tool for mitigating risks. This provides financial protection against potential cyberattacks and promotes the adoption of best practices across industries.
The growing reliance on cyber insurance reflects the increased awareness among Saudi businesses of the importance of proactive cybersecurity measures.
Exporting cybersecurity expertise and technology
Saudi Arabia’s progress in cybersecurity is not only benefitting the Kingdom but also positioning it as a global leader capable of exporting expertise and technologies.
The National Cybersecurity Authority has been instrumental in fostering international collaborations and creating platforms for knowledge sharing.
Initiatives such as the National Cybersecurity Academy provide advanced training to professionals, equipping them with the skills needed to address both domestic and international challenges.
Alvarez & Marsal’s Mohamed said: “By leveraging its robust cybersecurity frameworks and strategic partnerships, Saudi Arabia can offer tailored cybersecurity services and solutions to other regions. Initiatives such as the National Cybersecurity Academy by the NCA.”
This capacity for exporting cybersecurity solutions will allow Saudi Arabia to play a critical role in addressing global online threats.
Moreover, the Kingdom’s strategic location and status as a regional economic hub make it a key player in cybersecurity across the Middle East and North Africa region.
Saudi Arabia is increasingly seen as a model for other countries seeking to enhance their cybersecurity frameworks. Its experience in managing threats and building resilient digital infrastructure has positioned it as a leader in this space.
The Kingdom’s efforts to protect its critical infrastructure are seen not just as a defensive necessity but also as a key pillar in positioning the Kingdom as a leader in global cybersecurity. Vision 2030 has been a central driver of this transformation.
Events such as the Global Cybersecurity Forum have cemented Saudi Arabia’s leadership position. File
Samer Omar, cybersecurity and digital trust leader at PwC Middle East, highlighted to Arab News how the Kingdom’s digital growth has shaped its cybersecurity strategy.
“Saudi Arabia has achieved fourth place globally in the digital services index, first regionally, and second among G20 nations. The rapid advance in technology has increased the digital ecosystem in Saudi Arabia, which in turn has further increased its exposure to cyber-attacks,” Omar said.
He added: “In response, the Kingdom has successfully orchestrated a combination of regulations, investments, and awareness which has propelled most sectors to adopt a proactive security by design approach.”
This proactive approach allowed Saudi Arabia to secure the highest ranking possible in the UN Global Cybersecurity Index 2024, a reflection of the Kingdom’s investment in a secure digital future.
Omar pointed out that Vision 2030 has accelerated the investment in human capital to build critical national capability and aid nationals in attaining key cybersecurity skills and certifications.
He also emphasized the vital role Vision 2030 plays in safeguarding the Kingdom’s critical sectors, particularly energy, finance, and smart cities, which are integral to the nation’s economy.
“Saudi Arabia faces compelling challenges in these critical sectors due to the complex infrastructure, creating a potentially vulnerable and vast attack surface for adversaries,” Omar said.
Omar noted Saudi Arabia’s determination to not only secure its own digital landscape but also position itself as a cybersecurity leader on the global stage.
This leadership is exemplified by initiatives like the Global Cybersecurity Forum, which Omar describes as “a unique ecosystem and platform that is actively engaging with leading bodies such as the World Economic Forum,” thus shaping the future of cybersecurity well beyond the Kingdom.
Addressing the cybersecurity talent gap
Saudi Arabia has been proactively addressing the shortage of cybersecurity talent by heavily investing in capacity-building programs supported by both public and private sectors.
“There are an estimated 19,600 Saudi cybersecurity professionals with 32 percent of them being female,” Omar said.
He continued: “In addition, most major universities have cybersecurity education and training including Capture The Flag competitions, and all the major cybersecurity technology vendors provide training on their products and services.”
These efforts are integral to the country’s broader vision of strengthening its digital infrastructure under Vision 2030.
A secure future
According to Omar, the cybersecurity industry in Saudi Arabia is projected to experience significant growth in the coming years, driven by the Kingdom’s Vision 2030 initiative and robust regulatory frameworks.
“NCA released a report this year that estimates the size of the cybersecurity market to be SR13.3 billion with 31 percent of the spending from the public sector and the remaining 69 percent from the private sector,” he said.
Omar went on to say: “Some analysts estimate the cybersecurity CAGR to be between 11 percent to 13 percent.”
This is due to Vision 2030, which serves as a catalyst for developing the digital ecosystem, Omar explained, emphasizing the strategic role of the initiative in shaping the country’s cyber transformation.
KARACHI: Pakistan’s Federal Board of Revenue (FBR) has waived off customs and regulatory duties on imports from Azerbaijan under the Pakistan-Azerbaijan Preferential Trade Agreement, the finance ministry said in a notification this month.
During Azerbaijan President Ilham Aliyev’s two-day visit to Pakistan in July, both nations agreed to enhance the volume of bilateral trade to $2 billion, vowing to strengthen ties and increase cooperation in mutually beneficial economic projects. They also signed the Pakistan-Azerbaijan Preferential Trade Agreement to boost economic cooperation through the reduction of tariffs on goods like Pakistani sports equipment, leather, and pharmaceuticals as well as Azerbaijani oil and gas products.
“The federal government is pleased to exempt with effect from Dec. 16, 2024, the import into Pakistan from Azerbaijan of the goods specified,” the finance ministry said in a notification. adding that imports from Azerbaijan would be exempted from all kinds of tariffs including customs duty, additional customs duty and regulatory duty.
“Provided that where the rates of customs duty, additional customs duty, and regulatory duty [...] are higher than specified rates, the lower rates [...] shall apply,” it added.
The tariff concessions cover items including shelled hazelnuts or filberts, apricots, vegetable saps and extracts, non-stemmed tobacco, polyethylene, propylene copolymers, casing, tubing, drill pipes and refined copper wire with a maximum cross-sectional dimension exceeding 6 mm.
In recent weeks, there has been a flurry of visits, investment talks and economic activity between officials from Pakistan and the Central Asian nations as well as other transcontinental and landlocked countries like Azerbaijan as Islamabad seeks to consolidate the South Asian nation’s role as a pivotal trade and transit hub.
Oil Updates – crude falls on demand growth concerns, robust dollar
Updated 20 December 2024
Reuters
LONDON, Dec 20 : Oil prices fell on Friday on worries about demand growth in 2025, especially in top crude importer China, putting global oil benchmarks on track to end the week down more than 3 percent.
Brent crude futures fell by 32 cents, or 0.4 percent, to $72.56 a barrel by 4:09 p.m. Saudi time. US West Texas Intermediate crude futures also eased 32 cents, or 0.5 percent, to $69.06 per barrel.
Chinese state-owned refiner Sinopec said in its annual energy outlook released on Thursday that China’s crude imports could peak as soon as 2025 and the country’s oil consumption would peak by 2027 as diesel and gasoline demand weaken.
“Benchmark crude prices are in a prolonged consolidation phase as the market heads toward the year-end weighed by uncertainty in oil demand growth,” said Emril Jamil, senior research specialist at LSEG.
He added that OPEC+ would require supply discipline to perk up prices and soothe jittery market nerves over continuous revisions of its demand growth outlook. The Organization of the Petroleum Exporting Countries and allies, together called OPEC+, recently cut its growth forecast for 2024 global oil demand for a fifth straight month.
JPMorgan sees the oil market moving from balance in 2024 to a surplus of 1.2 million barrels per day in 2025, as the bank forecasts non-OPEC+ supply increasing by 1.8 million bpd in 2025 and OPEC output remaining at current levels.
Meanwhile, the dollar’s climb to near a two-year high also weighed on oil prices, after the US Federal Reserve flagged it would be cautious about cutting interest rates in 2025.
A stronger dollar makes oil more expensive for holders of other currencies, while a slower pace of rate cuts could dampen economic growth and trim oil demand.
US President-elect Donald Trump said on Friday that the EU may face tariffs if the bloc does not cut its growing deficit with the US by making large oil and gas trades with the world’s largest economy.
In a move that could pare supply, G7 countries are considering ways to tighten the price cap on Russian oil, such as with an outright ban or by lowering the price threshold, Bloomberg reported on Thursday.
Russia has circumvented the $60 per barrel cap imposed in 2022 using its “shadow fleet” of ships, which the EU and UK have targeted with further sanctions in recent days.
Saudi Arabia drives MENA e-commerce growth during festive season: report
Updated 19 December 2024
Reem Walid
RIYADH: Saudi Arabia played a pivotal role in driving a 44 percent increase in e-commerce orders across the Middle East and North Africa region during the 2024 festive season, according to a joint study by Flowwow and Admitad.
The surge was fueled by trends in mobile shopping, cultural celebrations, and gifting. Saudi Arabia led the way in mobile commerce adoption, with 62 percent of online purchases made via mobile devices.
The report also highlighted significant growth in the broader MENA e-commerce market, which is expected to reach $50 billion by 2025. During the holiday season, this market experienced a substantial uptick in activity.
Flowwow, a UAE-based gifting marketplace, reported a 62 percent rise in purchases, an 86 percent increase in sales turnover, and a 15.76 percent increase in average order value compared to the previous year.
Slava Bogdan, CEO of Flowwow, said: “The festive season is one of the peak shopping periods for Flowwow gifting marketplace. It’s a time when our customers focus on celebrating and sharing joy through thoughtful gifts for their loved ones.”
He continued: “Starting with White Friday in November and continuing through the Christmas and New Year festivities, this period represents a critical shopping time in the GCC region, especially with the growing expat population.”
According to the study, November emerged as the busiest month for e-commerce, driven by Black Friday sales and preparations for Christmas and New Year. Ramadan in March and International Women’s Day in January also contributed to sales growth, with increases of 11 percent and 14 percent, respectively.
Across the region, the average order value rose from $30 in 2023 to $36 in 2024, reflecting a shift toward higher spending on quality items.
The report further revealed that mobile commerce accounted for 44.6 percent of all orders in the region in 2024. Following Saudi Arabia’s lead, the UAE recorded 60 percent adoption, Bahrain had 59 percent, and Oman followed with 58 percent. Kuwait and Qatar also saw strong mobile commerce uptake at 57 percent and 54 percent, respectively.
Marketplaces continued to dominate, contributing to 67 percent of total sales. Key product categories included electronics, fashion, and home and garden, while high-value items like furniture and jewelry drove higher AOVs.
“This year’s surge in e-commerce activity demonstrates the evolving shopping habits in the MENA region, where mobile-first experiences and marketplace-driven sales have become the backbone of consumer behavior. Our data highlights how businesses can leverage these trends to optimize their strategies and grow significantly during peak seasons,” said Anna Gidirim, CEO of Admitad.
Among the countries in the region, Kuwait recorded the highest average order value at $127, followed by the UAE at $102, Egypt at $74, Saudi Arabia at $52, and Qatar at $50.
Pakistan saw the largest sales growth at 28 percent, with notable increases in Kuwait at 17 percent and Saudi Arabia at 8 percent, according to the survey data.
The report emphasized the importance of cultural celebrations in shaping consumer behavior and underscored the growing role of mobile commerce and marketplaces in the region’s e-commerce landscape.
