Attractive Investment In Down Stream Business Saudi Arabia

Presented by: Ahmed Al-Rajhi Vice Chairman Al Rajhi Holding Company USA April 2010

Advantages and Benefits for the investors in K.S.A ( I )

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Ownership

100% foreign ownership allowed 

Monetary policy

Since 1986 the Saudi Riyal is pegged against the US$ at a rate of SR 3.75 SR to US$ 1.00

No restriction on entry and repatriation of foreign capital & profits 

Funding

The Saudi Industrial Development Funds (SIDF) grants interest free loans for industrial projects up to 50% of its total costs including working capital The loan is repayable in 5-7 years after grace period of 2-3 years

Advantages and Benefits for the investors in K.S.A ( II )



Tax

Reduction of corporate tax from 45% to 20% Tax is applicable to the foreign partner, Saudi partners are subject to 2.5% Zakat on their net worth No Personal Income Tax 

Duty

Duty exemption on plant & machinery not produced locally 

Law / labor

Excellent law & order situation No labor unions Low Manpower cost

Advantages and Benefits for the investors in K.S.A ( III )

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Infrastructure

Excellent road network links all cities within the Kingdom and Huge investments in the infrastructures taking place in ports and railways.



Land

Industrial land available at very low rates 

Raw materials

Access to advantageously priced raw materials (e.g. PP, PE)

Utilities Cost

Excellent infrastructure to supply utilities like water, gas & electricity at very competitive rates Electricity 3.2 cents per kwh Gas Water $0.75 per MBTU $1.60 per m 3

Advantages and Benefits for the investors in K.S.A( IV )

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Logistic costs

Competitive freight rates to local, regional and global markets

CONTACT INFORMATIOM

Advantages and Benefits for the investors in K.S.A ( V )

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Supply Chain

Central location for participating in strongly growing GCC markets and supplying goods to Europe, Asia/Pacific and the Americas

Successful Investments in K.S.A

Example 1: GPIL

 GPIL Ltd was established in 1989 with low production capacity (3,000MT/YR) Of BOPP Film and current capacity is (73,000MT/Yr)  The company is undergoing a major expansion project that will bring total production capacity to 150,000 MT/year 2013.  Offering packaging solutions to customers in the Middle east/Africa, Europe and the Americas.(more than 35 countries world wide ).

 Representative office in Italy to serve Europe Customers

GPIL Sales History

250,000 200,000 150,000 100,000 50,000 0,000 Sale in Million Dollar 12,993 14,535 16,372 16,931 20,443 22,569 27,718 49,761 64,635 139,812 181,167 220,955

Successful Investments in K.S.A

Example 2: MATTEX COMPANY

 Mattex was established in 1996 in Dubai and Jeddah and produces carpet backings, artificial grass backings and geotextiles with a total production capacity of approx. 400 MM m 2 .

 The company is represented in the Americas, Europe, Africa/Middle East and Asia/Pacific.

Mattex Fabrics Sales History 400,0 350,0 300,0 250,0 200,0 150,0 100,0 50,0 Sales in Million m2 1996 1997 24,4 1998 65,0 1999 82,4 2000 112,7 2001 125,4 2002 133,7 2003 148,1 2004 146,6 2005 154,3 2006 241,0 2007 344,0 2008 363,1 2009 370,7 2010 377,8

Mattex North American Exports

MFJ and MFD

History Products Mattex Local Warehousing

Mattex USA End customer

Business started early 2005 and continues to grow Primary, Secondary Backing & Woven Geotextiles Georgia: Calhoun + Chatsworth; California: Los Angeles; Employs 6 people in the USA

Containerized Volumes Figures in FFE Origins : Jeddah (KSA) and Dubai (UAE) Destinations: USA West and East Coast plus Canada Year 2005 2006 2007 2008 2009 *2010 FFE 111 186 384 442 391 485

* 2010 Figures Are Forecasted

Quantity (M2) Turnover (USD) 16.70 41.86 63.81 65.14 59.18 67.80 4.84 11.01 19.03 23.54 17.26 20.46

Thank You…