Malaysian Firms Benefit from Saudi Vision 2030

by shariff mohammed | Mar 20, 2018

Malaysian companies are taking advantage of trade and investment opportunities generated in Saudi Arabia in the wake of the Saudi Vision 2030. This was disclosed by Mr. Mohamad Haris Abdul Latif, acting Trade Commissioner of the Malaysian External Trade Development Corporation in an exclusive interview with Shamsul Huda of the Saudi Commerce & Economic Review.

  

He said that encouraged by MATRADE, Malaysian firms started pursuing business opportunities in the Kingdom after the announcement of its Vision 2030. As a result, a number of Malaysian companies have been engaged in the Kingdom’s major development projects, including the Shuaibah Independent Water & Power Project, the largest combined power and water plants in the world, development of the Jamarat Bridge and surrounding area in Mina, operations and maintenance of the Makkah pilgrims train service, structural fabrication and plant mechanical repair works in oil and gas field for Ras Tanura mega project, construction of the Kingdom Tower in Riyadh, township development of Jazan Economic City, the Jabal Omar Development Project in Makkah and Princess Noura University in Riyadh and King Abdullah University of Science and Technology (KAUST) in Thuwal. Excerpts of the interview:

Saudi-Malaysian brotherly relations have reached new heights after the recent visit of the Saudi King Salman Bin Abdulaziz to Kuala Lumpur. Please explain the outcome of the historic visit of the Saudi King to your country;

First of all, it was our pleasure and honor to receive HRH King Salman Bin Abdulaziz in Malaysia. Malaysia and Saudi Arabia have historical longstanding bilateral trade and cultural relations based on their Islamic values and traditions.

The visit of King Salman was a resounding success judged by various aspects from both countries. To say a few, there will be more scholarships for Malaysian students and an increase to hajj quota and building of two centers for Malaysian pilgrims in Makkah and Madinah. There will be more investments in both countries that will create job opportunities and Malaysian entrepreneurs will find new trade and businesses in the Kingdom. With renewed opportunities, trade volume between Malaysia and Saudi Arabia has improved significantly in a short time. King Salman keeps supporting Malaysian companies as the Malaysian companies have earned reputation as providers of quality products and services and we are proud that Malaysian firms have been chosen to undertake projects at some of the most prestigious locations in Saudi Arabia.

Malaysia also always welcomes Saudi companies to Malaysia for more business opportunities and to attend different Malaysian exhibitions. We would like to invite Saudi firms to the upcoming 15th Malaysian International Halal Showcase that will be organized from 4 to 7 April, 2018 with the aim to connect halal business from all around the world. It will be our pleasure to arrange meetings for Saudi companies that want to source from Malaysia.

What were the major deals and MoUs signed during the visit of the Saudi King to Malaysia?

During the visit, Saudi Arabia and Malaysia signed several Memorandums of Understanding (MoUs). MoUs signed between the two countries were mainly related to the trade and investment sectors, employment and human resources development and scientific and education sectors. In addition, Saudi business delegation that accompanied the King showed keen interest in many Malaysian industries like the halal economy, Islamic finance services and small- and medium-sized enterprises.

Please focus on Saudi Aramco’s agreement with Petronas in the Refinery and Petrochemical Integrated Development (RAPID) project;

The visit of the Saudi King secured some deals. The largest  and most important was the $7 billion investment deal involving the Kingdom’s state-owned energy company, Saudi Aramco and its Malaysian counterpart, Petronas, to advance the RAPID project—a joint refinery and petrochemical complex in Malaysia's southern state of Johor.

 

Are Malaysian companies facing any obstacles in their efforts to enter the Saudi market?

Similar to other market, there are some challenges that Malaysian companies have to overcome in order for them to be successful in the market. These include visa regimes, language as well as cost of doing business in Saudi Arabia.

 

 

 

Saudi Arabia has also significant investments in Malaysia. Please give us details of Saudi investments in your country

 

In addition to Saudi Aramco’s investment in the Refinery and Petrochemical Integrated Development (RAPID), in Pengerang, Johor, there are more Saudi invests in the following industries in Malaysia: Electronics & electrical products, machinery & equipment, food manufacturing and in banking sector.

Malaysia has emerged as an important global player in developing Islamic financing. Please elaborate about possible future cooperation between the two countries in this sector

There is bright potential for cooperation between the two countries in this emerging sector. Recently Malaysian Prime Minister outlined the aspirations and progress Malaysia has made towards further enhancing its leadership in the estimated $2.6 trillion global Islamic finance industry, which is set to give Islamic banking and capital market sector a further fillip.

In line with Malaysia’s vision to develop the sector, a few years back, the stock exchanges of Saudi Arabia and Malaysia signed an agreement to foster closer ties between the two bourses with a focus on Islamic finance, part of broader efforts to increase cross-border activity in the industry. The agreement will see the exchanges of expertise and develop human capital which is likely to cover areas such as equities, mutual funds and Islamic bonds, or sukuk. The two countries are the largest Islamic finance markets globally, holding a combined $682 billion in Islamic banking assets. In regard to the cooperation between Saudi Arabia and Malaysia in the Islamic financing, AlRajhi Bank is already present in both Saudi Arabia and Malaysia and represents the trust and the strength of the relations between the two countries.

 

Please focus on future cooperation in the area of education and training after Saudi and Malaysian governments agreed to increase scholarships for students from both countries;  

 

Since the visit of King Salman to Malaysia, the number of scholarships has increased to over 100 for Malaysian students to study at the Imam Mohammed Bin Saud Islamic University in the Saudi capital, Riyadh. Malaysian students are now able to study in Saudi universities and obtain knowledge from top universities in Saudi Arabia enabling them to share their knowledge with their Saudi counterparts.

 

Saudis are now increasingly interested in visiting Malaysia. Please highlight your tourism industry and provide us with the annual number of Saudis visiting Malaysia for the last few years;

It’s is true that Malaysia has become a favorable destination for the Saudi tourists. According to statistics, the number of Saudi tourists to Malaysia has increased significantly in recent years. In 2007, around 78,298 Saudis visited Malaysia whereas in 2016, over 123,878 Saudis arrived in our country.  

 

 

Please provide us with details of latest two-way trade figures; 

 

In 2016, bilateral trade between Malaysia and Saudi Arabia was valued at $3.38 billion, with Malaysian exports to the Kingdom amounting to $0.81 billion and its imports from Saudi Arabia accounting for $2.57 billion. In 2017 (Jan – Nov), bilateral trade between Malaysia and Saudi Arabia stood at $2.98 billion, with Malaysian export to the Kingdom worth $0.895 billion and its imports worth $2.09 billion. In term of import from the Kingdom in 2016, over 90% of Malaysia import was chemical and petroleum products, while Malaysian exports to Saudi Arabia were mainly electrical and electronic products, ingots & other primary forms of iron/steel/metal, machinery, chemicals products and wood products.

 

Saudi-Malaysian Trade


 

 

 


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