GCC to discuss industrial investment
Hundreds of officials and businessmen from Gulf oil producers will meet in Saudi Arabia next month to discuss industrial investment and obstacles facing funding of such projects, organisers said on Saturday.
The participants from the six-nation Gulf Cooperation Council (GCC), which controls nearly 45 per cent of the world’s proven oil deposits, will meet in the Eastern town of Khobar on October 12 and the conference will be opened by Saudi Minister for Trade and Industry, Abdullah Zainal.
The Dammam-based Federation of the GCC Chambers of Commerce and Industry (FGCCI) is organising the conference, which comes amid global economic uncertainty and tightening domestic credit in the region.
“The conference will cover challenges and obstacles facing financing of industrial projects in the GCC,” FGCCI Secretary-General Abdul Rahim Naqi said.
“There is a pressing need for securing funds for such ventures. I call on all businessmen and businesswomen in the GCC as well as bankers and other parties interested in this sector to attend this conference, which represents an opportunity to promote industrial investment in the region.”
In a statement sent to Emirates 24|7, Naqi said the conference would cover three main topics – funding challenges, available financial resources for industrial ventures, and lessons derived from global experiences in this field.
The GCC states – the UAE, Saudi Arabia, Kuwait, Qatar, Bahrain and Oman – have been locked in an industrial drive to ease reliance on volatile oil exports. Their focus has been on the manufacturing sector given the limited potential of farming and other sectors because of their desert nature.
Other key factors are that the abundance of oil and gas resources in the region as well as the presence of cheap labour and the GCC’s location in the heart of a massive consumer market make industrial ventures among the most feasible in the world, mainly petrochemicals and aluminium.
The six nations have pumped nearly $180 billion into non-oil industrial projects, including nearly $30bn in 2009 alone, according to the Doha-based Gulf Organisation for Industrial Consulting (GOIC).
Saudi Arabia, the world’s oil powerhouse and the largest crude exporter, has emerged as the top investor in industry, pumping a total $112bn, nearly 62 per cent of the GCC’s combined capital in manufacturing, said GOIC, which advises on the region’s non-oil manufacturing policies.
Qatar came second with around $20.7bn, followed by the UAE, which accounted for around 9.5 per cent. The remaining GCC members Oman, Kuwait and Bahrain constituted 6.5, 5.6 and 4.9 per cent, respectively.
A sector breakdown showed petrochemicals have received the lion’s share of the GCC’s industrial capital, accounting for around 55.9 per cent at the end of 2009.
Aluminium and other metals were the second largest beneficiary, receiving around 12.8 per cent of the total investments. Other key investment sectors included cement and other building materials, with total investment of around $20.7bn at the end of 2009.
Official data showed the combined investments in the GCC petrochemical industry, which is based on the enormous gas resources in the region, surged from around $52bn in 2000 to $70bn in 2007 and over $100bn at the end of 2009. They are expected to swell to $120bn by the end of 2012.
GOIC’s figures showed the total number of manufacturing units in the GCC increased by about 5.6 per cent to 13,006 units at the end of 2009 while the number of their employees rose by 6.2 per cent to more than one million.