https://arab.news/jkhwh
RIYADH: Some 40 international materials suppliers for Saudi Aramco have already obtained certificates from the Kingdom’s Ministry of Investment to establish headquarters in Saudi Arabia, as localization efforts steadily continue, according to a top official.
Speaking at the seventh edition of the In-Kingdom Total Value Add Forum in Dhahran, Salem Al-Huraish, vice president of procurement at Saudi Aramco, said more than 60 other firms have put in the paperwork to begin the process of setting-up regional headquarters in the Kingdom.
“We are working hand-in-hand with the Ministry of Investment. And now, we are giving incentives for the companies when they move their regional headquarters to the Kingdom,” said Al-Huraish.
He added: “I am glad to highlight that 40 of our top suppliers, those are international suppliers, already obtained certificates from MISA which is the first step for their localization or migration of their regional headquarters in the Kingdom. Another more than 60 suppliers have already filed the request to get the license.”
According to Al-Huraish, these localization efforts and the migration of regional headquarters will definitely contribute to the economy of Saudi Arabia.
During the panel discussion, Al-Huraish noted Saudi Aramco is always focussing to ensure a sustainable supply chain within the Kingdom, and made it clear that this is in line with Saudi Arabia’s Vision 2030.
“ESG (environmental, social, and governance) was in the DNA of the company since its inception. We always realize the importance of ESG in our ecosystem, strategy, and all our business ethics. We are trying to establish a local platform here in the Kingdom to measure how much each company are contributing to ESG. Now, our suppliers are being rewarded for their ESG contribution locally,” Al-Huraish added.
Al-Huraish further pointed out that Saudi Aramco is very much focused on cybersecurity, and added that it is giving incentives to all the companies that meet these requirements as a part of the iktva program.
“All in all, we are on a continuous journey for improvement by keeping an eye on the market. Whenever we see an area of improvement, we will just capture it and have it part of our program,” said Al-Huraish.
Al-Huraish further pointed out that the iktva program achieved 63 percent local content in 2022, up from 35 percent in 2015 when it was initially launched.
On the first day of the iktva forum on Monday, Saudi Aramco signed over 100 agreements valued at $7.2 billion, primarily aimed at collective localization in key focus areas including digital space, sustainability, industrial, and manufacturing sectors.
Ayman Al Fallaj, CEO of Thiqah (Screenshot)
For his part, Ayman Al Fallaj, CEO of Thiqah, said that digitalization is needed to ensure a sustainable supply chain and localization.
“Without digitalization, we face tons of challenges, as we do not know where to start. We believe digitalization has played a crucial role in the smooth transition and transformation after the pandemic and in bringing more local content to the Kingdom of Saudi Arabia,” said Al Fallaj.
During the panel discussion, ACWA Power CEO Paddy Padmanathan said that the company has been very transparent in its investment plan which will in turn help to ensure a resilient and sustainable local supply chain.
“We are very transparent in our investment plans, and we show the path on where ACWA Power is going to invest, and what ACWA Power is going to invest in. And therefore, what are the areas in which they (companies) can reliably look at investing in the Kingdom in order to supply into the project that we procure,” said Padmanathan.
Padmanathan added that ACWA Power is investing around $13 billion every year in new capacities; roughly half of it is in the Kingdom and another half in other markets the company serves.
Paul Stanley, CEO of Achilles, said during the discussion that maintaining economic competitiveness is one of the main challenges faced as companies try to ensure sustainability.
“As you look at your supply chain, remember you are running a business, and it has to be sustainable economically as well. An ethically sustainable chain should be also commercially competitive, and that is where the real challenge is,” said Stanley.