OPPORTUNITIES IN THE CONSTRUCTION INDUSTRY KINGDOM OF SAUDI ARABIA - PowerPoint PPT Presentation


Title: OPPORTUNITIES IN THE CONSTRUCTION INDUSTRY KINGDOM OF SAUDI ARABIA


1
OPPORTUNITIES IN THE CONSTRUCTION
INDUSTRYKINGDOM OF SAUDI ARABIA THE UNITED
ARAB EMIRATES
March, 2009
2
Agenda
  • Introduction
  • Overview of the Gulf Cooperation Council (GCC)
    market
  • Construction Opportunities
  • Kingdom of Saudi Arabia (KSA)
  • United Arab Emirates (UAE)

3
Business Environment - GCC
  • The GCC, a trade bloc involving the six Arab
    states of the Arabic Gulf, has some of the
    fastest growing economies in the world, mostly
    due to booms in oil and natural gas revenues
    coupled with building and investment booms backed
    by decades of saved petroleum revenues
  • The GCC has a desire to establish the region as a
    financial and tourism centre and to provide job
    opportunities to the growing young population by
    establishing new industries
  • If a Canadian company is established in Saudi
    Arabia, they will benefit from the governments
    membership with the Gulf Co-operation Council
    (GCC) which will allow them to take advantage of
    the duty-free arrangements in Bahrain, Oman,
    Kuwait, Qatar and the UAE
  • GCC corporate and financial champions are
    becoming international players as they have an
    objective to drive expansion beyond the GCC
    region

4
GCC AN OVERVIEW
  • The 6 GCC countries are all rated investment
    grades by Moodys
  • Ease of doing business in the GCC ranks better
    than India, China and Russia (IFC World Bank
    ranking)
  • IFM outlook of 3.5 growth, down from previous
    forecast
  • Lower price of oil
  • Increased financial risk due to limited external
    access
  • Global recession impact on tourism and physical
    trade flow
  • Total foreign assets of the GCC region - US 1.3
    trillion
  • Fitch Ratings recently estimated Dubais total
    non-bank external debt to be around USD69
    billion, or about 85.4 of Dubais 2008 GDP


EASE OF DOING BUSINESS
5
EDC Facilitating Canadian Trade
  • EDC is Canadas official export credit agency
    (ECA) offering financial solutions to help
    Canadian exporters and investors expand their
    international business
  • We work in partnership with the public and
    private sectors to enhance the visibility of
    Canadian companies abroad
  • EDCs financial services include financing,
    insurance and guarantees
  • EDCs combined financing and insurance volumes
    reached 85.8 billion in 2008 (23 increased
    over 2007) while serving 8,312 Canadian companies
    (11 increase)

6
EDC How We Add Value
  • EDC PRODUCTS
  • Accounts Receivable Insurance
  • Protects Exporters accounts receivables against
    non-payment by their buyers
  • Contract Insurance Bonding
  • Guarantee of Exporters bid and performance bonds
    or any advances (ie. Down payments) received

7
EDC How We Add Value, Contd
  • MORE EDC PRODUCTS
  • Financing
  • Flexible, medium- or long-term financing for
    buyers of Canadian capital goods and services
    including Structured Finance (Project Finance)
  • Canadian foreign investment financing can also be
    considered
  • Political Risk Insurance
  • Provided for Canadian companies investments or
    assets in a foreign country, as well as
    protecting project loans from political risks

8
Bad News Projects Cancelled or Postponed
  • Estimates vary from
  • 75 billion according to a HSBC
  • report issued early February to up to
  • 260 billion worth of property being
  • delayed or cancelled according to
  • Morgan Stanley

9
Announced Projects 2009-2011
GCC Projects by Country ( Millions)
GCC Projects by Sector ( Millions)
Industry
Power
MEED Projects March 2008
10
Announced Projects 2009-2011 in the UAE and the
KSA
UAE Projects all Sectors ( Millions)
KSA Projects all Sectors ( Millions)
MEED Project March 2008
11
Why Saudi Arabia?
  • Saudi Arabia During the Downturn
  • KSA plans to spend a trillion dollars on
    infrastructure investment over the next 15 years
    but officials say spending is contingent on oil
    prices of 50/barrel
  • Despite downturn, public infrastructure projects
    are largely secure and will be an important
    stimulus tool for the Saudi government
  • Business Environment
  • Largest economy in the Middle East and North
    Africa (MENA) region holding 25 of the total
    Arab GDP.
  • Construction industry is the largest in the MENA
    region and the largest non-oil economic industry
    in KSA, both in residential and industrial
    building.
  • Government is attempting to promote growth in the
    private sector by privatizing industries such as
    power and telecom.
  • The Saudi Arabian General Investment Authority
    (SAGIA) is undertaking a multi-billion (US)
    dollar development strategy centred around the
    building of greenfield economic cities around the
    country.
  • The economic cities are designed to attract
    foreign and domestic investment into the
    downstream energy, transport, industry and
    knowledge-based sectors.

GDP 600 billion (2008)
Annual
growth rate 4.2 (2008) Population 28.1
millionPer capita GDP 21,300 (2008)

Inflation 10.3 (2008) CANADA SAUDI
ARABIA TRADE (2008) Canadian Exports to Saudi
Arabia 969 million Canadian Imports from Saudi
Arabia 2.3 billion As a part of the GCC, KSA
has approved duty exemptions covering the import
of more than 400 items. The Council has also
implemented a customs union which has harmonized
customs tariff at 5 of an items value.
Source IMF, StatsCan
12
The Economic Cities Saudi Arabia
13
King Abdullah Economic City
  • Project comprises
  • Sea Port
  • Capacity of 10 million twenty-foot equivalent
    Unit (TEU) of containers per year.
  • Industrial district
  • Will cover 63 million m². Will consist of
    industrial and light industries, research and
    development, business office, services,
    hospitality, education and community services.
  • Waterside resort
  • The number of hotel rooms and suites are proposed
    to be 25,000 hotel rooms in more than 120 hotels.
  • Financial island
  • The Central Business District will offer 3.8
    million m² of office space, hotels and mixed-use
    commercial space.
  • Residential district
  • Will include 260,000 apartments and 56,000
    villas. This area include residential, commercial
    and recreational areas.
  • Education and health zone
  • Location 100km north of Jeddah
  • Size 168 km²
  • Cost 100 billion SAR (US 26.6 Billion)
  • Sponsor EMAAR
  • Jobs 500,000
  • Status Phase 1 completed Industrial Zone
  • Phase 2 is next
  • Completion estimated between 2025-2030

14
King Abdullah Economic City
  • List of Companies Awarded
  • Contracts in Phase 1
  • Aseer Trading, Tourism and Manufacturing and
    Contracting Sectors
  • Al-Fozan Co. Manufacturing of construction
    material
  • Al-Muhaidib Wholesaling of Building Material
  • Dallah Al-Baraka Cleaning and Maintenance
    Construction
  • Khayyat Group Construction of a cement project
  • Bin Laden Group Construction conglomerate
    awarded the construction of the residential
    towers
  • Orascom Construction, cement plant
  • AlBabtain Power and Telecommunications
  • Saudi Oger Construction, Printing,
    Telecommunication, Real Estate Development,
    Utilities, IT Services

15
EDC Business in KSA
  • In 2008, EDCs business volume in Saudi Arabia
    equated to 323 million in support of 102
    Canadian companies

16
Why United Arab Emirates?
  • UAE During the Downturn
  • Dubai has been hit particularly badly with a
    floundering real estate market and no oil
    revenues to fall back on but the federal
    government is stepping in to aid the emirate
  • Major government investment will continue to
    serve as a stimulus tool, with talks of
    mega-projects particularly in Abu Dhabi
  • Business Environment
  • Oil windfalls are financing mega infrastructure
    and development projects UAE government pushing
    economic diversification such that non-oil
    revenues represent 35 of total GDP in 2007.
  • The construction industry, which as full UAE
    government backing, has contributed strongly to
    the UAEs economic boom, accounting for roughly
    7.5 of total GDP in 2007.
  • Political will to turn Dubai into the regions
    main trade centre, including establishment of
    commercial free zones such as Dubai
    International Financial Centre, Dubai Internet
    City, and Dubai Media City.
  • Abu Dhabi is the centre of the construction boom,
    with huge potential for growth in the coming five
    years as the nations capital is severely
    underdeveloped and the government has clear
    intentions to maximise investment in construction
    as a part of the Abu Dhabi 2030 Plan

GDP 187 billion (2008) Annual growth rate
8.5 (2008) Population 4.6 million (2008)Per
capita GDP 40,400 (2008)

Inflation 14.4 (2008) CANADA UAE TRADE
(2008) Canadian Exports to UAE 1.3
billion Canadian Imports from UAE 330
million As a part of the GCC, UAE has approved
duty exemptions covering the import of more than
400 items. The Council has also implemented a
customs union which has harmonized customs tariff
at 5 of an items value.
Source IMF, StatsCan
17
Abu Dhabi Emirate Top Contribution to UAE GDP 2008
18
Abu Dhabi Master Plan 2030
  • Master Plan would quadrupling its size, spreading
    out extensively to both the mainland and
    neighboring islands, including Saadiyat Island
    and Al Reem Island
  • Reduced reliance on the oil sector as a source of
    economic activity over time
  • Focus on knowledge-based industries
  • Sustainable development
  • Larry Beasley (retired Director of Planning for
    the City of Vancouver) Special Advisor on City
    Planning to the government of Abu Dhabi
  • Pearl Building Rating system aimed to cut the
    use of water by 30 and energy by 20
    (substitute to LEED in N.A.)
  • http//business.abudhabi.ae

Buildings with a sustainability level of 35 per
cent will receive one pearl, 45 per cent will
earn two pearls, 55 per cent will get three
pearls, 65 per cent will receive four pearls and
75 per cent will earn five pearls.
19
Abu Dhabi Growth Chart (2007-2030)
Courtesy Abu Dhabi Government
20
Key Players for Master Plan
  • The Mubadala Development Company (Mubadala) is a
    wholly owned investment vehicle of the Government
    of the Emirate of Abu Dhabi
  • Mandate to move the Emirate from a single-sector
    economy into a multi-sector global (healthcare,
    technology, aerospace, energy, infrastructure and
    real estate)
  • Abu Dhabi Future Energy Company (ADFEC) is the
    government-owned organization mandated to develop
    and execute Masda Initiative a zero-waste,
    zero-carbon, car-less city in the desert
  • Aldar Properties (Aldar) was established in
    October 2004 as a real estate developer of
    retail, residential, commercial, entertainment
    and hospitality properties. Carries a number of
    strategic project of the Emirate
  • Yas Island project, Al Raha Beach development
  • Other developers Sorough, Al Quadra, Burooj,
    Tameer,

21
EDC Business in UAE
  • In 2008, EDCs business volume in the UAE equated
    to 737 million supporting 203 Canadian
    companies.

22
Three Tips for Trading with KSA and UAE
  • While complex markets with a different culture
    from Canada, entrepreneurs can be
  • prepared to do business there. Experts in the
    region boil their advice down to three
  • Cs Commitment, Capacity and Contacts.
  • Commitment
  • The first step to success is a triple dose of
    relationship building by investing a long term
    market development. Arab hospitality is
    legendary they place a high value on loyalty and
    respect.
  • Capacity
  • The scale of everything in the region is large.
    Canadian companies need to rethink their strategy
    in the context as purchase orders are large
    compared to what Canadians are generally exposed
    to in North America
  • Contacts
  • You must have a partner or agent to navigate this
    country. Many people in KSA and UAE want to be an
    agent and many want to sign a long-term contract.
    The challenge is to find someone who really
    understands your business and your expectations.

23
Construction shows
  • Cityscape, Dubai, 5-8 October 2009
  • Attracts regional and international investors,
    property developers, governmental and development
    authorities, leading architects, designers,
    consultants and all senior professionals involved
    in the property industry. It provides an annual
    forum that celebrates the very best in real
    estate, architecture, urban planning and design
    from around the world.
  • www.cityscape.ae
  • The Big 5 exhibition, Dubai, 23- 26 November 2009
  • The largest trade show for the Construction
    industry in the Arabian Gulf. A unique event,
    combining five major exhibitions under one roof
    (Building Construction Water technologies Air
    conditioning Cleaning Maintenance Glass
    Metal). Featuring more than 3,200 companies from
    53 countries. 58,040 visitors the public and
    private sectors attended the 2008 event,
    including key buyers, architects, engineers and
    contractors.
  • www.thebig5exhibition.com

24
Useful Links and Contacts
  • Saudi Arabia
  • Riyadh Chamber of Commerce and Industry
  • www.riyadhchamber.com
  • Jeddah Chamber of Commerce and Industry
  • www.jcci.org.sa/JCCI/EN
  • United Arab Emirates
  • Abu Dhabi Chamber of Commerce and Industry
  • www.abudhabichamber.ae
  • services_at_adcci.gov.ae
  • Canadian Business Council Dubai
  • www.cbc-dubai.com

25
TCS Services
  • The Canadian Trade Commissioner Service (TCS)
    helps Canadian companies and organizations do
    business abroad by increasing revenues and
    lowering the costs of global business through
    four key services
  • 1. Prepare for International Markets
  • Determine if you are internationally
    competitive Decide on a target market Collect
    market and industry information Improve your
    international business strategy
  • Find Qualified Contacts
  • Potential buyers and partners, Professionals in
    financial and legal institutions, Technology
    sources, Agents, Manufacturers' representatives,
    Foreign regulatory authorities, Foreign
    investment promotion agencies
  • 3. Assess Market Potential
  • Market intelligence Advice on improving your
    market strategy
  • 4. Resolve Problems
  • Customs clearance and shipping, unfair business
    treatment, contract bidding, storage and
    warehousing, insurance coverage and claims,
    overdue accounts receivable, and more

26
TCS At Home and Abroad
  • 13 regional offices across Canada
  • Vancouver, Calgary, Edmonton, Regina, Saskatoon,
    Winnipeg, Toronto, Montreal, Quebec City,
    Halifax, Moncton, Charlottetown, St Johns
  • Canadian Consulate in Dubai, United Arab
    Emirates
  • John Burbridge, Head of Consulate and Senior
    Trade Commissioner,
  • dubai-td_at_international.gc.ca
  • Canadian Embassy in Abu Dhabi, United Arab
    Emirates
  • Michael Lazaruk, Senior Trade Commissioner
  • Imad Arafat, Locally-engaged Trade Commissioner
  • Abdbi-td_at_international.gc.ca
  • Canadian Embassy in Riyadh, Saudi Arabia
  • Jeff Blackstock, Senior Trade Commissioner
  • Joe Fakhri, Locally-engaged Trade Commissioner
  • Ryadh-td_at_international.gc.ca

27
Thank You / Merci
  • Rizwan Haider, Chief Representative Middle East
    Africa
  • International Business Development Group
  • Tel (613) 598-2760/ Fax (613) 598-2503
  • Email middleeast_at_edc.ca
  • Marie-Claude Erian, Sector Advisor
  • Infrastructure Environment
  • Tel (613) 598-2969/ Fax (613) 597-8667
  • Email inf-env_at_edc.ca
  • Jean-Francois Croft, Chief Representative GCC
    Yemen
  • based in Abu Dhabi, UAE
  • Tel (613) 597-7882 Fax (613) 598-2503
  • Email gcc_at_edc.ca
  • Visit our website at www.edc.ca

28
Trade Regime in UAE
Appendix 1
  • Imports into UAE can only be undertaken by
    importers who have appropriate trade license
    issued by the respective Department of Economics/
    Municipality of each Emirate.
  • The UAE practices a liberal trade policy with no
    protective tariff or non-tariff barriers on
    imports. All goods imported into the UAE are
    subjected to 5 import duty (only tobacco
    attracts 100 import duty) on c.i.f. value at any
    point in the UAE. C.i.f. value is normally
    calculated with reference to commercial invoices
    covering the relative shipment of the goods.
    However, the Customs Department of the UAE is not
    bound to accept the value as in the invoices. In
    such cases, an estimation of value by the customs
    will be used for calculation of import duty. At
    present the Federal government is discussing the
    possibility to drop the custom tax of 5 and to
    replace it by a VAT (3 to 5).
  • Trade practices in Dubai are in line with normal
    international standards. All correspondence
    should be in English or Arabic. As a
    sophisticated market, full technical
    specifications should be provided with CIF Local
    prices with Middle East references.
  • Payments are normally effected by letter of
    credit.
  • There is no corporate tax in the UAE. The only
    exceptions are oil producing companies and
    branches of foreign banks. There is also no sales
    tax or personal tax.
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OPPORTUNITIES IN THE CONSTRUCTION INDUSTRY KINGDOM OF SAUDI ARABIA

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Title: OPPORTUNITIES IN THE CONSTRUCTION INDUSTRY KINGDOM OF SAUDI ARABIA


1
OPPORTUNITIES IN THE CONSTRUCTION
INDUSTRYKINGDOM OF SAUDI ARABIA THE UNITED
ARAB EMIRATES
March, 2009
2
Agenda
  • Introduction
  • Overview of the Gulf Cooperation Council (GCC)
    market
  • Construction Opportunities
  • Kingdom of Saudi Arabia (KSA)
  • United Arab Emirates (UAE)

3
Business Environment - GCC
  • The GCC, a trade bloc involving the six Arab
    states of the Arabic Gulf, has some of the
    fastest growing economies in the world, mostly
    due to booms in oil and natural gas revenues
    coupled with building and investment booms backed
    by decades of saved petroleum revenues
  • The GCC has a desire to establish the region as a
    financial and tourism centre and to provide job
    opportunities to the growing young population by
    establishing new industries
  • If a Canadian company is established in Saudi
    Arabia, they will benefit from the governments
    membership with the Gulf Co-operation Council
    (GCC) which will allow them to take advantage of
    the duty-free arrangements in Bahrain, Oman,
    Kuwait, Qatar and the UAE
  • GCC corporate and financial champions are
    becoming international players as they have an
    objective to drive expansion beyond the GCC
    region

4
GCC AN OVERVIEW
  • The 6 GCC countries are all rated investment
    grades by Moodys
  • Ease of doing business in the GCC ranks better
    than India, China and Russia (IFC World Bank
    ranking)
  • IFM outlook of 3.5 growth, down from previous
    forecast
  • Lower price of oil
  • Increased financial risk due to limited external
    access
  • Global recession impact on tourism and physical
    trade flow
  • Total foreign assets of the GCC region - US 1.3
    trillion
  • Fitch Ratings recently estimated Dubais total
    non-bank external debt to be around USD69
    billion, or about 85.4 of Dubais 2008 GDP


EASE OF DOING BUSINESS
5
EDC Facilitating Canadian Trade
  • EDC is Canadas official export credit agency
    (ECA) offering financial solutions to help
    Canadian exporters and investors expand their
    international business
  • We work in partnership with the public and
    private sectors to enhance the visibility of
    Canadian companies abroad
  • EDCs financial services include financing,
    insurance and guarantees
  • EDCs combined financing and insurance volumes
    reached 85.8 billion in 2008 (23 increased
    over 2007) while serving 8,312 Canadian companies
    (11 increase)

6
EDC How We Add Value
  • EDC PRODUCTS
  • Accounts Receivable Insurance
  • Protects Exporters accounts receivables against
    non-payment by their buyers
  • Contract Insurance Bonding
  • Guarantee of Exporters bid and performance bonds
    or any advances (ie. Down payments) received

7
EDC How We Add Value, Contd
  • MORE EDC PRODUCTS
  • Financing
  • Flexible, medium- or long-term financing for
    buyers of Canadian capital goods and services
    including Structured Finance (Project Finance)
  • Canadian foreign investment financing can also be
    considered
  • Political Risk Insurance
  • Provided for Canadian companies investments or
    assets in a foreign country, as well as
    protecting project loans from political risks

8
Bad News Projects Cancelled or Postponed
  • Estimates vary from
  • 75 billion according to a HSBC
  • report issued early February to up to
  • 260 billion worth of property being
  • delayed or cancelled according to
  • Morgan Stanley

9
Announced Projects 2009-2011
GCC Projects by Country ( Millions)
GCC Projects by Sector ( Millions)
Industry
Power
MEED Projects March 2008
10
Announced Projects 2009-2011 in the UAE and the
KSA
UAE Projects all Sectors ( Millions)
KSA Projects all Sectors ( Millions)
MEED Project March 2008
11
Why Saudi Arabia?
  • Saudi Arabia During the Downturn
  • KSA plans to spend a trillion dollars on
    infrastructure investment over the next 15 years
    but officials say spending is contingent on oil
    prices of 50/barrel
  • Despite downturn, public infrastructure projects
    are largely secure and will be an important
    stimulus tool for the Saudi government
  • Business Environment
  • Largest economy in the Middle East and North
    Africa (MENA) region holding 25 of the total
    Arab GDP.
  • Construction industry is the largest in the MENA
    region and the largest non-oil economic industry
    in KSA, both in residential and industrial
    building.
  • Government is attempting to promote growth in the
    private sector by privatizing industries such as
    power and telecom.
  • The Saudi Arabian General Investment Authority
    (SAGIA) is undertaking a multi-billion (US)
    dollar development strategy centred around the
    building of greenfield economic cities around the
    country.
  • The economic cities are designed to attract
    foreign and domestic investment into the
    downstream energy, transport, industry and
    knowledge-based sectors.

GDP 600 billion (2008)
Annual
growth rate 4.2 (2008) Population 28.1
millionPer capita GDP 21,300 (2008)

Inflation 10.3 (2008) CANADA SAUDI
ARABIA TRADE (2008) Canadian Exports to Saudi
Arabia 969 million Canadian Imports from Saudi
Arabia 2.3 billion As a part of the GCC, KSA
has approved duty exemptions covering the import
of more than 400 items. The Council has also
implemented a customs union which has harmonized
customs tariff at 5 of an items value.
Source IMF, StatsCan
12
The Economic Cities Saudi Arabia
13
King Abdullah Economic City
  • Project comprises
  • Sea Port
  • Capacity of 10 million twenty-foot equivalent
    Unit (TEU) of containers per year.
  • Industrial district
  • Will cover 63 million m². Will consist of
    industrial and light industries, research and
    development, business office, services,
    hospitality, education and community services.
  • Waterside resort
  • The number of hotel rooms and suites are proposed
    to be 25,000 hotel rooms in more than 120 hotels.
  • Financial island
  • The Central Business District will offer 3.8
    million m² of office space, hotels and mixed-use
    commercial space.
  • Residential district
  • Will include 260,000 apartments and 56,000
    villas. This area include residential, commercial
    and recreational areas.
  • Education and health zone
  • Location 100km north of Jeddah
  • Size 168 km²
  • Cost 100 billion SAR (US 26.6 Billion)
  • Sponsor EMAAR
  • Jobs 500,000
  • Status Phase 1 completed Industrial Zone
  • Phase 2 is next
  • Completion estimated between 2025-2030

14
King Abdullah Economic City
  • List of Companies Awarded
  • Contracts in Phase 1
  • Aseer Trading, Tourism and Manufacturing and
    Contracting Sectors
  • Al-Fozan Co. Manufacturing of construction
    material
  • Al-Muhaidib Wholesaling of Building Material
  • Dallah Al-Baraka Cleaning and Maintenance
    Construction
  • Khayyat Group Construction of a cement project
  • Bin Laden Group Construction conglomerate
    awarded the construction of the residential
    towers
  • Orascom Construction, cement plant
  • AlBabtain Power and Telecommunications
  • Saudi Oger Construction, Printing,
    Telecommunication, Real Estate Development,
    Utilities, IT Services

15
EDC Business in KSA
  • In 2008, EDCs business volume in Saudi Arabia
    equated to 323 million in support of 102
    Canadian companies

16
Why United Arab Emirates?
  • UAE During the Downturn
  • Dubai has been hit particularly badly with a
    floundering real estate market and no oil
    revenues to fall back on but the federal
    government is stepping in to aid the emirate
  • Major government investment will continue to
    serve as a stimulus tool, with talks of
    mega-projects particularly in Abu Dhabi
  • Business Environment
  • Oil windfalls are financing mega infrastructure
    and development projects UAE government pushing
    economic diversification such that non-oil
    revenues represent 35 of total GDP in 2007.
  • The construction industry, which as full UAE
    government backing, has contributed strongly to
    the UAEs economic boom, accounting for roughly
    7.5 of total GDP in 2007.
  • Political will to turn Dubai into the regions
    main trade centre, including establishment of
    commercial free zones such as Dubai
    International Financial Centre, Dubai Internet
    City, and Dubai Media City.
  • Abu Dhabi is the centre of the construction boom,
    with huge potential for growth in the coming five
    years as the nations capital is severely
    underdeveloped and the government has clear
    intentions to maximise investment in construction
    as a part of the Abu Dhabi 2030 Plan

GDP 187 billion (2008) Annual growth rate
8.5 (2008) Population 4.6 million (2008)Per
capita GDP 40,400 (2008)

Inflation 14.4 (2008) CANADA UAE TRADE
(2008) Canadian Exports to UAE 1.3
billion Canadian Imports from UAE 330
million As a part of the GCC, UAE has approved
duty exemptions covering the import of more than
400 items. The Council has also implemented a
customs union which has harmonized customs tariff
at 5 of an items value.
Source IMF, StatsCan
17
Abu Dhabi Emirate Top Contribution to UAE GDP 2008
18
Abu Dhabi Master Plan 2030
  • Master Plan would quadrupling its size, spreading
    out extensively to both the mainland and
    neighboring islands, including Saadiyat Island
    and Al Reem Island
  • Reduced reliance on the oil sector as a source of
    economic activity over time
  • Focus on knowledge-based industries
  • Sustainable development
  • Larry Beasley (retired Director of Planning for
    the City of Vancouver) Special Advisor on City
    Planning to the government of Abu Dhabi
  • Pearl Building Rating system aimed to cut the
    use of water by 30 and energy by 20
    (substitute to LEED in N.A.)
  • http//business.abudhabi.ae

Buildings with a sustainability level of 35 per
cent will receive one pearl, 45 per cent will
earn two pearls, 55 per cent will get three
pearls, 65 per cent will receive four pearls and
75 per cent will earn five pearls.
19
Abu Dhabi Growth Chart (2007-2030)
Courtesy Abu Dhabi Government
20
Key Players for Master Plan
  • The Mubadala Development Company (Mubadala) is a
    wholly owned investment vehicle of the Government
    of the Emirate of Abu Dhabi
  • Mandate to move the Emirate from a single-sector
    economy into a multi-sector global (healthcare,
    technology, aerospace, energy, infrastructure and
    real estate)
  • Abu Dhabi Future Energy Company (ADFEC) is the
    government-owned organization mandated to develop
    and execute Masda Initiative a zero-waste,
    zero-carbon, car-less city in the desert
  • Aldar Properties (Aldar) was established in
    October 2004 as a real estate developer of
    retail, residential, commercial, entertainment
    and hospitality properties. Carries a number of
    strategic project of the Emirate
  • Yas Island project, Al Raha Beach development
  • Other developers Sorough, Al Quadra, Burooj,
    Tameer,

21
EDC Business in UAE
  • In 2008, EDCs business volume in the UAE equated
    to 737 million supporting 203 Canadian
    companies.

22
Three Tips for Trading with KSA and UAE
  • While complex markets with a different culture
    from Canada, entrepreneurs can be
  • prepared to do business there. Experts in the
    region boil their advice down to three
  • Cs Commitment, Capacity and Contacts.
  • Commitment
  • The first step to success is a triple dose of
    relationship building by investing a long term
    market development. Arab hospitality is
    legendary they place a high value on loyalty and
    respect.
  • Capacity
  • The scale of everything in the region is large.
    Canadian companies need to rethink their strategy
    in the context as purchase orders are large
    compared to what Canadians are generally exposed
    to in North America
  • Contacts
  • You must have a partner or agent to navigate this
    country. Many people in KSA and UAE want to be an
    agent and many want to sign a long-term contract.
    The challenge is to find someone who really
    understands your business and your expectations.

23
Construction shows
  • Cityscape, Dubai, 5-8 October 2009
  • Attracts regional and international investors,
    property developers, governmental and development
    authorities, leading architects, designers,
    consultants and all senior professionals involved
    in the property industry. It provides an annual
    forum that celebrates the very best in real
    estate, architecture, urban planning and design
    from around the world.
  • www.cityscape.ae
  • The Big 5 exhibition, Dubai, 23- 26 November 2009
  • The largest trade show for the Construction
    industry in the Arabian Gulf. A unique event,
    combining five major exhibitions under one roof
    (Building Construction Water technologies Air
    conditioning Cleaning Maintenance Glass
    Metal). Featuring more than 3,200 companies from
    53 countries. 58,040 visitors the public and
    private sectors attended the 2008 event,
    including key buyers, architects, engineers and
    contractors.
  • www.thebig5exhibition.com

24
Useful Links and Contacts
  • Saudi Arabia
  • Riyadh Chamber of Commerce and Industry
  • www.riyadhchamber.com
  • Jeddah Chamber of Commerce and Industry
  • www.jcci.org.sa/JCCI/EN
  • United Arab Emirates
  • Abu Dhabi Chamber of Commerce and Industry
  • www.abudhabichamber.ae
  • services_at_adcci.gov.ae
  • Canadian Business Council Dubai
  • www.cbc-dubai.com

25
TCS Services
  • The Canadian Trade Commissioner Service (TCS)
    helps Canadian companies and organizations do
    business abroad by increasing revenues and
    lowering the costs of global business through
    four key services
  • 1. Prepare for International Markets
  • Determine if you are internationally
    competitive Decide on a target market Collect
    market and industry information Improve your
    international business strategy
  • Find Qualified Contacts
  • Potential buyers and partners, Professionals in
    financial and legal institutions, Technology
    sources, Agents, Manufacturers' representatives,
    Foreign regulatory authorities, Foreign
    investment promotion agencies
  • 3. Assess Market Potential
  • Market intelligence Advice on improving your
    market strategy
  • 4. Resolve Problems
  • Customs clearance and shipping, unfair business
    treatment, contract bidding, storage and
    warehousing, insurance coverage and claims,
    overdue accounts receivable, and more

26
TCS At Home and Abroad
  • 13 regional offices across Canada
  • Vancouver, Calgary, Edmonton, Regina, Saskatoon,
    Winnipeg, Toronto, Montreal, Quebec City,
    Halifax, Moncton, Charlottetown, St Johns
  • Canadian Consulate in Dubai, United Arab
    Emirates
  • John Burbridge, Head of Consulate and Senior
    Trade Commissioner,
  • dubai-td_at_international.gc.ca
  • Canadian Embassy in Abu Dhabi, United Arab
    Emirates
  • Michael Lazaruk, Senior Trade Commissioner
  • Imad Arafat, Locally-engaged Trade Commissioner
  • Abdbi-td_at_international.gc.ca
  • Canadian Embassy in Riyadh, Saudi Arabia
  • Jeff Blackstock, Senior Trade Commissioner
  • Joe Fakhri, Locally-engaged Trade Commissioner
  • Ryadh-td_at_international.gc.ca

27
Thank You / Merci
  • Rizwan Haider, Chief Representative Middle East
    Africa
  • International Business Development Group
  • Tel (613) 598-2760/ Fax (613) 598-2503
  • Email middleeast_at_edc.ca
  • Marie-Claude Erian, Sector Advisor
  • Infrastructure Environment
  • Tel (613) 598-2969/ Fax (613) 597-8667
  • Email inf-env_at_edc.ca
  • Jean-Francois Croft, Chief Representative GCC
    Yemen
  • based in Abu Dhabi, UAE
  • Tel (613) 597-7882 Fax (613) 598-2503
  • Email gcc_at_edc.ca
  • Visit our website at www.edc.ca

28
Trade Regime in UAE
Appendix 1
  • Imports into UAE can only be undertaken by
    importers who have appropriate trade license
    issued by the respective Department of Economics/
    Municipality of each Emirate.
  • The UAE practices a liberal trade policy with no
    protective tariff or non-tariff barriers on
    imports. All goods imported into the UAE are
    subjected to 5 import duty (only tobacco
    attracts 100 import duty) on c.i.f. value at any
    point in the UAE. C.i.f. value is normally
    calculated with reference to commercial invoices
    covering the relative shipment of the goods.
    However, the Customs Department of the UAE is not
    bound to accept the value as in the invoices. In
    such cases, an estimation of value by the customs
    will be used for calculation of import duty. At
    present the Federal government is discussing the
    possibility to drop the custom tax of 5 and to
    replace it by a VAT (3 to 5).
  • Trade practices in Dubai are in line with normal
    international standards. All correspondence
    should be in English or Arabic. As a
    sophisticated market, full technical
    specifications should be provided with CIF Local
    prices with Middle East references.
  • Payments are normally effected by letter of
    credit.
  • There is no corporate tax in the UAE. The only
    exceptions are oil producing companies and
    branches of foreign banks. There is also no sales
    tax or personal tax.
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