Saudi non-oil exports hit by financial crisis

Saudi Arabia's non-oil exports plunged by more than 19 per cent in December to extend a downward trend over the previous few months because of the global financial crisis, a Saudi bank said yesterday.

The UAE remained the Gulf's largest export market in December, while the United States was overtaken by Bahrain as the third importer from Saudi Arabia, the National Commercial Bank (NCB) said in a study.

"It is important to note that the medium-term outlook for non-oil exports will depend on the stability of oil prices as well as the extent of global recession" said NCB, Saudi Arabia's largest bank by assets.

Citing official data, it said Saudi Arabia's total non-oil exports dived by around 19.1 per cent compared with December 2007 and imports increased by a mere one per cent in the same period.

"These figures illustrated the downtrend in both exports and imports since September last year, which is justifiable based on the rapid decent in oil prices. Exports related to petrochemicals maintained their share relative to last year at 31 per cent, while plastics' share fell from 25 per cent to 22 per cent."

The report showed the UAE remained the top market for Saudi exports, accounting for nearly 13 per cent. It was followed by China, nine per cent, and Bahrain, around six per cent.

"These figures reflect the increased importance of regional trade between GCC. Interestingly, the US had lost its third rank as a destination for the Kingdom's exports, being surpassed by Bahrain, India and Qatar."

On the import side, the main partners included the US (16 per cent), China (11 per cent), and Japan (nine per cent).

Official figures showed the total value of Saudi non-oil exports stood at SR7.4 billion (Dh7.4bn) in December 2008 compared with SR9.2bn in the same month of 2007.

Saudi Arabia, the world's dominant oil power, which controls a quarter of the global crude resources, has been locked in a drive to expand its non-oil industries within long-term programmes to diversify its economy. Its non-oil exports include mainly petrochemicals, plastics, machinery, equipment, building materials, paper, foodstuffs and other light products.

The Kingdom has pumped in excess of $80 billion into the manufacturing sector, more than 60 per cent of the GCC's industrial capital.


Bids invited for refinery

Saudi Aramco, France's Total, and US-based ConocoPhillips have decided to resume work at their joint projects to construct two refineries in Saudi Arabia, one in Jubail, the other in Yanbu, Al Riyadh daily reported.

A contractor told the paper that his company was invited to submit its technical and financial bid for the two projects. The combined cost of the two projects was cut to $18 billion (Dh66bn) after they were delayed in the second quarter of last year, it reported.

Each of the two refineries will have a production capacity of 400,000 barrels a day and both of them are expected to start operations in 2012.