Saudi, Indian firms sign mega deal; more in line

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http://economictimes.indiatimes.com...ega-deal-more-in-line/articleshow/7556454.cms

NEW DELHI: Saudi Arabia's Al Qahtani Sons Group Wednesday signed a joint venture agreement with Indian firm SledgeHammer Oil Tools to build one of the largest manufacturing plants for oilfield and drilling equipment in the Gulf nation. Several other companies are keen to sign similar deals to expand their businesses in the two countries, senior officials said.

"Many companies are looking for joint ventures. Such deals are important for expanding business in India and in Saudi Arabia," Abdulrahman Al-Rabiah, chairman of India-Saudi India Joint Business Council, said at a business meeting here.

Rabiah, who is heading a 24-member business delegation to India, said many companies have started negotiations and are likely to sign joint ventures or memorandums of understanding soon.

Addressing the third India- Saudi Arabia Joint Business Council meeting here, Saudi Arabia's ambassador Faisal Hassan Ahmed Trad urged Indian companies to increase investment in his country.

"The agreement on protection of investment between Saudi Arabia and India and the agreement on avoiding double taxation would spur two-way investments," Trad said.

Indian companies have invested $2.07 billion in Saudi Arabia between 2000-2009 while Saudi Arabia has invested $29.81 million in India so far.

India-Saudi economic relations have shown remarkable growth with bilateral trade registering a three-fold increase in the last five years.

The value of the two-way trade between the two countries in 2009-10 exceeded $21 billion, said Devin Narang, executive committee member of the Federation of Indian Chambers of Commerce and Industry (FICCI).

Narang, who is also the chairman of Freeplay Energy India, urged the business delegation from Saudi Arabia to undertake investments in India's infrastructure sector, including airports and railways, which require investments in excess of $100 billion.

 

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Saudi petrochem giant plans big for India

Petrochemicals major Saudi Basic Industries Corporation (Sabic) is planning big investments in India that may run into billions of dollars.

Sabic, which ranks among the world's top five petrochemical companies, has been in talks with Indian petrochemical players for a joint venture to tap the huge potential of the Indian market with cracker projects and downstream refineries, Ahmed Alumar, vice president Asia Pacific and member of the board of directors of Sabic Asia Pacific, told Business Standard.

"India is an equally important market for us like China and we are looking at similar investments, if required, in India. It is early to reveal more details and names of companies we are discussing with."

India, which imports over $22 billion of petrochemical products ever year, offers Sabic the perfect platform to tap the potential for its core business areas like chemicals, fertilizers, innovative plastics, polymers and performance chemicals, he said.

Mukesh Ambani-owned Reliance Industries is planning to investment about Rs 16,000 crore to set up a cracker unit at Jamnagar in Gujarat. The unit would produce ethylene, propylene, low-density polyethylene and mono ethylene glycol that have a wide range of applications in various industries. Sabic is the largest producer of mono-ethylene glycol in the world.

Two weeks ago, India's largest refiner Indian Oil Corporation had commissioned the country's largest naphtha cracker plant at Indian Oil's Panipat Complex built at Rs 14, 439 crore. The plant has a capacity to produce 800,000 tonnes per annum (TPA) of ethylene. GAIL-promoted Brahmaputra Cracker and Polymer Limited (BCPL) is also setting up a Rs 5,600 crore project in Assam.

Sabic has been operating in India since 1994 and has about 530 employees in the country catering to 1,000 plus customers across various industries. However, they used to primarily import products from its facilities in Saudi Arabia and Europe into India. "Actually we started business with India before we did with China. India is very near to Saudi Arabia than China and it is like a home environment for us here," said Alumar.

Sabic, which had revenues of $27 billion in 2009, had entered into a 50:50 joint venture with Chinese Government-controlled China Petroleum and Chemical Corporation (Sinopec) two years ago to construct a three million tonnes per annum capacity petrochemical complex at Tianjin. It had invested over $2.5 billion in the project.

Sabic and Sinopec are also planning further co-operation and investments in various areas. Sabic has ten manufacturing facilities in China, where as its investments in India are limited to facility and technology centres it acquired in Baroda and Bangalore through its global acquisition of GE's plastics division a few years ago. Sabic has six offices in India.

Alumar said Sabic was planning to expand its research and technology center in Baroda by hiring more than 280 research staff. The facility will be ready by the year-end or early 2012. The company is also setting up a new muti wall sheet (MWS) facility in Baroda. This is expected to commence operations in July 2011.

 

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India, S.Arabia businesses to enhance and strengthen business cooperation

While the political relations between India and Saudi Arabia has been strong and stable, the business community of both countries have failed to capitalize on this strength said Mr Abdul Rahman Al-Rabiah, Chairman of the Saudi India Business Council and the leader of the Saudi Business Delegation to India, at a CII meeting organized today.

The business and investment data clearly indicate the need for private sector of both countries to engage more deeply, he added.

Rabiah is leading a 25-member business delegation from Saudi Arabia to India.

"Saudi Arabia is confident of attracting Indian investment because it is the largest market in West Asia. Businesses have to take the lead and work with the government. Investment and business opportunities from India in the areas of Education, IT, Tourism, Health care, Biotechnology, Telecommunications and Automobiles and components should be explored".

According to him, more than 65 percent of Saudi population is less than 27 years, and he looks forward to India collaborating especially in the Services, Education and Healthcare sector andwelcomed the Indian businessmen to invest in Saudi Arabia.

Faisal Hassan Trad, Ambassador of the Royal Embassy of Saudi Arabia to India, said that after the visit Indian Prime Minister Dr. Manmohan Singh's visit to Saudi Arabia in 2010 and the Riyadh Declaration, economic and commercial opportunities for bilateral trade and investment is on the upswing.

In his welcome address, Atul Punj, Chairman CII Gulf Committee and Chairman Punj Lloyd said that the India Saudi relationship was elevated to strategic partnership during the historic visit of Prime Minister Dr Manmohan Singh to Kingdom of Saudi Arabia in 2010, and economic cooperation is and will remain a vital component of this partnership.

He also added that there is need to greatly diversify the trade basket and move up the value chain. The sectors of potential for investments in KSA relate to oil and gas, education, pharmaceuticals, biotechnology, and manufacturing industries such as chemicals, plastics, and food processing, among others. (ANI)