Rotana to double Saudi-based workforce to 5k employees as it expands offering
Updated 12 May 2024
Reina Takla Nadin Hassan
RIYADH: Rotana Hotels is planning on more than doubling its workforce in Saudi Arabia to 5,000 staff as it expands its outlets to 15, the company’s CEO has told Arab News.
Speaking on the sidelines of the Future Hospitality Summit in Riyadh, Philip Barnes highlighted the diverse nature of hotels in terms of size and staffing, indicating that the current portfolio in the Kingdom employs around 2,000 people.
He said that between eight and nine hotels are under development and set to open within the next two to three years, and the firm has “a number of others coming.”
Barnes expressed his desire to expand the company’s presence in various parts of Saudi Arabia, not just in the holy cities of Madinah and Makkah.
Reflecting on the increase in workforce needed, he said: “I think you’d be looking at 4,000 to 5,000 people by the time we get to that 15 hotel.
“It ranges between 200 to 300 people per property as we go forward depending on the size of the property.”
Rotana is seeking opportunities across a broader range of locations within Saudi Arabia, and Barnes believes that being a UAE-based company gives it an insight into the tourism landscape that other firms may lack.
“We see ourselves as being able to come into the Kingdom in a way that others can’t because we are recognized as that brand that is from the region. We can go into destinations that maybe aren’t the premier destinations as other people see them, everybody wants to be in Riyadh, everybody wants to be in Jeddah,” Barnes said.
He added: “We have a lot of things happening, but we have further developments coming online in Egypt over the course of the next two years. We’ve got more coming on board in Qatar.”
He also stated that the company is also exploring new territories, with recent moves into Pakistan, which Rotana views as a promising and emerging market
Additionally, he further explained the group’s plans for expansion by exploring opportunities in Eastern Europe, though not on a large scale. Turkiye is also a focus, with two hotels opened in the past year and more development expected.
“We’re also opening two hotels in London, not in central London. We’re opening one hotel in Kingston, which is a suburb of London, 20 minutes from downtown,” Barnes said.
He continued: “I personally am hoping that that will then be a springboard into six or seven or eight other Centros around the UK in places like Liverpool or Leeds or, Manchester etc. because I see it as being a brand that has tremendous legs, and we've already got a number of those properties here in this part of the world.”
IEA cuts 2024 oil demand growth forecast on China slowdown
IEA cut its growth forecast by 70,000 bpd, or about 7.2%, to 900,000 bpd
It cited a slowdown in Chinese demand as main driver of weaker global demand growth
Updated 4 sec ago
AFP
PARIS: Global oil demand grew at its slowest pace since 2020 in the first half of 2024 due to China’s economic slump, the International Energy Agency said Thursday, prompting the IEA to lower its full-year forecast.
Demand increased by 800,000 barrels per day in the first six months of 2024, compared to 2.3 million bpd over the same period in 2023, the IEA said in its monthly oil market report.
“The chief driver of this downturn is a rapidly slowing China, where consumption contracted y-o-y (year-on-year) for a fourth straight month in July,” the Paris-based agency said.
China is among the world’s top consumers and importers of oil, but the world’s second-biggest economy has struggled amid weak consumer spending, a property sector crisis and high unemployment.
The IEA also cited the country’s shift away from oil in favor of alternative energy.
Growth in world oil demand continues to decelerate, with a sharp slowdown in China the main driver
Global demand is expected to rise by 900,000 b/d in 2024, in line with our initial forecast from over a year ago
Rising sales of electric vehicles are reducing demand for road fuel while the development of its vast high-speed rail network is restricting growth in domestic air travel, the IEA said.
Outside of China, it added, “oil demand is tepid at best.”
For the full year, global oil demand is forecast to grow on average by 900,000 bpd, some 70,000 bpd below the IEA’s previous estimate.
This will take total demand to almost 103 million bpd.
Oil prices have weakened this year over concerns about the global economic outlook.
This week, Brent North Sea crude, the international benchmark, fell below $70 per barrel for the first time since December 2021.
The fall in prices has prompted leading members of the OPEC+ oil cartel, including Saudi Arabia and Russia, to postpone a planned output increase and instead extend voluntary supply cuts until the end of November.
The IEA said the delay gives OPEC+ “some time to further evaluate demand prospects for next year” as well as the impact of output disruptions in Libya.
But with supply from non-OPEC+ nations rising faster than overall demand, the group “may be staring at a substantial surplus, even if its extra curbs were to remain in place.”
Oil Updates – prices up over 1% on US hurricane impact concerns
Updated 39 min 48 sec ago
Reuters
SINGAPORE: Oil prices rose more than 1 percent on Thursday, spurred by concerns of Hurricane Francine impacting output in the US, the world’s biggest crude producer, though worries of lower demand capped gains.
Brent crude futures for November were up $1, or 1.4 percent at $71.61 a barrel at 9:32 a.m. Saudi time. US crude futures for October were up 92 cents, or 1.4 percent, at $68.23 a barrel.
Both contracts rose by more than 2 percent in the previous session as offshore platforms in the US Gulf of Mexico were shut and refinery operations on the coast disrupted by Hurricane Francine’s landfall in southern Louisiana on Wednesday.
“Both benchmarks, WTI and Brent, seem to have found some ground amid worries of disrupted US oil supplies,” said Priyanka Sachdeva, senior market analyst at Singapore-based brokerage Phillip Nova.
“The region accounts for about 15 percent of US oil production, with any disruptions in production likely to tighten supplies in the near term.”
But with the storm set to eventually dissipate after making landfall, the oil market’s attention again turned to lower demand.
US oil stockpiles rose across the board last week as crude imports grew and exports dipped, the Energy Information Administration said on Wednesday.
The data also showed gasoline demand fell to its lowest since May at the same time distillate fuel demand dropped, with refinery runs also declining. The US is the world’s biggest oil consumer.
Despite worries of Hurricane Francine impacting supply, the medium-term trend remains bearish for WTI crude, supported by weak demand from China and “growth scare concerns” in the US, said Kelvin Wong, senior market analyst at OANDA.
Earlier in the week, OPEC cut its forecast for global oil demand growth in 2024 and also trimmed its expectation for next year, its second consecutive downward revision.
“Oil traders are now looking ahead to International Energy Agency’s monthly market report later this week for any signs of a weakening demand outlook,” ANZ Research said in a note on Thursday.
Planning council reviews economic progress, Saudi Vision achievements
Updated 12 September 2024
Arab News
RIYADH: Saudi Arabia’s top council on economic affairs reviewed a number of reports during a virtual meeting held on Wednesday, the Saudi Press Agency reported.
The Council of Economic and Development Affairs studied a financial report for the second quarter of 2024 in a presentation by the Ministry of Economy and Planning.
The report included an analysis of the global economy, financial markets, and updates on the nation’s fiscal situation and its key indicators.
There was a 4.9% year-on-year growth in the non-oil sector during Q2 and a stabilization of general inflation rates at 1.5% in July.
The report indicated the strength of Saudi Arabia’s economy and the effectiveness of the measure taken to deal with global economic changes.
The ministry’s presentation also touched on future projects for the national economy and important reports from international and local bodies related to it.
The members also reviewed a presentation by the council’s own Strategic Management Office on the Saudi Vision report for Q1 of 2024. The report highlighted the key achievements of the Vision’s programs, strategic goals, and evaluation of their performance.
The Vision report noted that 2024 had begun with significant progress across all three pillars of the program, namely, a vibrant society, a thriving economy, and an ambitious nation.
The council also reviewed the Saudi Public Investment Fund’s annual report for 2023, traffic safety report for 2023, and a report on the social support subsidy system.
ISLAMABAD: Saudi oil giant Aramco said on Wednesday it would launch its first branded retail gas station in Pakistan by the end of the year, having already completed the acquisition of a 40 percent stake in Gas & Oil Pakistan Ltd. (GO) in May.
Aramco is a global integrated energy and chemicals company that produces approximately one in every eight barrels of the world’s oil supply. GO, one of Pakistan’s largest retail and storage companies, is involved in the procurement, storage, sale and marketing of petroleum products and lubricants.
“We are working to launch our first Aramco-branded gas station in Pakistan by the end of the year,” the Saudi oil company’s media department told Arab News in an emailed statement. “Will share more information when the site is commissioned.”
A Pakistan Board of Investment (BOI) official said Aramco’s acquisition of GO represented the oil giant’s first downstream retail investment in Pakistan and signaled the company’s growing retail presence in high-value markets.
In March, Aramco also acquired a 100 percent equity stake in Esmax Distribución SpA, a leading diversified downstream fuels and lubricants retailer in Chile.
“Our global retail expansion is gaining pace and this acquisition [of GO] is an important next step on our journey,” Yasser Mufti, Aramco Executive Vice President of Products & Customers, said in a statement in May when the GO deal was completed.
“Through our strategic partnership with GO, we look forward to supplying Aramco’s high-quality products and services to valued customers in Pakistan. We are also delighted to welcome another high-caliber addition to Aramco’s growing network of global partners, and look forward to combining our resources and expertise to unlock new opportunities and further grow the Aramco brand overseas.”
Pakistan and Saudi Arabia enjoy strong trade, defense and cultural ties. The Kingdom is home to over 2.7 million Pakistani expatriates and serves as the top source of remittances to the cash-strapped South Asian nation.
In February 2019, Pakistan and Saudi Arabia inked investment deals totaling $21 billion during a visit by Saudi Crown Prince Mohammed bin Salman to Islamabad. The agreements included about $10 billion for an Aramco oil refinery and $1 billion for a petrochemical complex at the strategic Gwadar Port in Balochistan.
Both countries have been working in recent months to increase bilateral trade and investment, and the Kingdom in April this year reaffirmed its commitment to expedite an investment package worth $5 billion for Pakistan.
Arabian Mills set final IPO price at $17.59 per share as CEO details growth vision
Updated 11 September 2024
Reina Takla Nadin Hassan
RIYADH: Saudi wheat flour producer Arabian Mills for Food Products Co. has set its final initial public offering price at SR66 ($17.59) per share on the Tadawul main market.
During the book-building process, the company received orders worth SR134.1 billion from local and international investment institutions for its IPO of approximately 30 percent of its shares on the Saudi Stock Exchange.
The offering comprises 15,394,502 offer shares.
The firm announced that the institutional offering was oversubscribed by about 132 times, leading to the offer price being set at the maximum of the range.
This indicates the company’s market capitalization upon listing would be SR3.387 billion.
As a result, the current stockholders will receive the net proceeds of the amount raised through the IPO, which is SR1.02 billion.
From this public offering, the shareholders selling their shares, including Abdulaziz Alajlan Sons for Commercial and Real Estate Investments, Sulaiman Abdulaziz Al-Rajhi International Co., and the National Agricultural Development Co., will collectively receive SR1.02 million.
Arabian Mills announced on Sept. 1 that the price range for the offering was set between SR62 and SR66 and appointed HSBC Saudi Arabia as the financial adviser, bookrunner, and lead manager for the institutional subscription, as well as the underwriter for the public offering.
“We feel that the demand, for the investors, this is the right time for any kind of an IPO. The macro-environment has been very favorable in general,” Rohit Chugh, CEO of Arabian Mills, told Arab News.
He added: “Secondly, as a company, we have seen about close to three years of privatization, which has given us an adequate amount of time to sort of reflect on our performance, which has been fantastic.”
This period has also allowed potential investors to review the company’s financial performance over the last two and a half years, giving them a complete view and boosting their confidence in the firm’s stability and prospects.
“Also, we have very good, strategic plans in place as far as future plans go, and now that we are very clear in terms of our vision, so if you take the past and the future, then it’s a very exciting time as far as we are concerned,” Chugh said.
He added: “In reality, the shareholders continue to remain invested. They’re very positive about the company, and that’s why they are just selling 30 percent of their shareholding to the new investors.”
Specifically, Alajlan Brothers will retain 35 percent, AlRajhi will keep about 25 percent, and NADEC will hold 10 percent, making up the 70 percent of shares that will remain with the existing investors.
“The 30 percent of the shareholding is what they have offered at a lucrative IPO price to the new investors because they feel that, with the growth plans, which we have in place for the future, they would like to invite new investors, to come and pitch in and be a part of this whole success story as we move,” the CEO said in the interview.
Expansion plans
Rohit Chugh, CEO of Arabian Mills. Supplied
Chugh stated that the company is currently focused on expanding its presence in new regions within Saudi Arabia.
Although they are already well-established in the Kingdom’s central, northern, and southern parts, they recognize significant opportunities in other areas they haven’t yet explored.
“Therefore, we are planning to tap those growth opportunities in the western, eastern and the northern parts of the country by opening up distribution centers. West, for example, is where Makkah, Madinah is,” he said.
Chugh continued: “If you talk about the east, a lot of action is happening there as well. The Tabuk north side is where the NEOM projects will be coming up in the future, so we want to be a part of the growth journey, tapping all the right corners in Saudi Arabia.”
Currently, the company is not planning to expand into international markets because it is focused on selling wheat flour at subsidized prices through its arrangement with the General Food Security Authority. However, they are open to exploring export opportunities in the future.
Given their significant milling capacity and robust infrastructure in Saudi Arabia and the Gulf Cooperation Council, they are well-positioned to handle such opportunities if they arise.
For now, their focus remains on their existing operations, and any decision to expand internationally would depend on the conditions at that time.
IPO trajectory
The company’s CEO underlined that when setting the IPO price, the management aimed to ensure that investors would have the opportunity to make a profit.
When asked about his forecast or trajectory stock, Chugh said they could have set a higher price, but they chose a lower cost to attract new investors who would join them in the company’s growth journey.
The intention was to leave some potential for capital appreciation, as the management believes the firm’s true value is higher than the IPO price.
“That’s where we see that there should be a positive trajectory in the coming time. Obviously, this is subject to market conditions and global conditions,” he said.
Chugh added: “Nobody can predict that. But yes, we are optimistic as a company that we have priced it at the right pricing, like we got at SR66.”
He believes there are strong growth prospects in Saudi Arabia, driven by the country’s Vision 2030, which is set to have an impact well beyond its target year.
“Obviously, the next four, five years are critical for us, but we are even looking beyond that to the next 15, 20 years and seeing how we can take this organization to fulfill its maximum potential as part of the Vision 2030 and beyond,” Chugh said.
