The kingdom’s industrial diversification drive has taken on momentum in recent years and the MoU between the two powerhouses is the latest example
Saudi Aramco and South Korea’s powerhouse Hyundai Heavy Industries (HHI) are eyeing new business opportunities that will impact Saudi industrial development significantly with the potential of high-value exports and greater overseas influence.
The two companies have signed a general memorandum of understanding (MoU) to jointly collaborate on business development opportunities in Saudi Arabia.
The MoU lays out a comprehensive, multi-faceted business cooperation framework in areas such as engineering, procurement and construction (EPC), downstream, and the development of a casting and forging facility, said a statement.
It also covers the development of a world-class maritime yard and the advancement of maritime diesel engine manufacturing in the kingdom, it said.
The strategic collaboration discussion was initiated when Saudi Aramco’s board of directors visited HHI’s Ulsan complex in April 2015.
Saudi Aramco has championed the development of a comprehensive maritime yard within Ras Al-Khair with the National Shipping Company of Saudi Arabia (Bahri) and HHI as potential partners. The yard will leverage the companies’ expanding offshore business to accelerate localisation efforts of the kingdom’s young and promising maritime industry and its associated supply chain, said the statement.
The collaborative partnership also extends to opportunities in areas such as: EPC, downstream opportunities and electric equipment manufacturing. The two companies agreed to further explore other collaboration opportunities as they arise, it stated.
It is Saudi Aramco’s and HHI’s common view that this strategic alliance enables the two companies to meet growing demand in the Middle East in various new business areas, it added.
Saudi Aramco president and chief executive Amin H Nasser said: “Our two companies are global leaders in our respective industries and the MoU cements a strategic relationship between us, with business flourishing on both sides.
“The partnership will add greater value to the country’s economy, boost our localisation efforts and help create jobs for Saudi nationals.”
Ki-sun Chung, senior vice president for HHI corporate planning, remarked: “The partnership between the two industrial behemoths not only means a great opportunity to enhance Korea›s shipbuilding and EPC businesses, but also extends Hyundai Group’s contribution to Saudi Arabia stretching back to the 1970s when it was awarded a contract to develop the Jubail port (King Fahd Industrial Port) project.
“This signing is significant as it provides the potential for the creation of another Jubail that creates tremendous growth opportunities for HHI in Saudi Arabia,” he added.
As well as Nasser and Chung, officials present at the signing ceremony were Jeong-Hwan Kim, chief operating officer of HHI Shipbuilding, and Cheul-ho Park, chief operating officer of HHI IP&E (Industrial Plant and Engineering).