The Royal Commission for Jubail and Yanbu (RCJY) signed two investment agreements worth SR7 billion ($1.89 billion) with Xinguang Industrial Company, a Chinese company, the Saudi Press Agency reported.

The agreements, which are part of Saudi Arabia’s G20 presidency year activities, were overseen by the president of RCJY Abdullah Bin Ibrahim Al-Saadan.

The first agreement was inked by Jubail and Yanbu Industrial Estates Services Company to establish and operate a LED factory in Jubail industrial city.

A desalination plant in Jubail

The factory is expected to provide 267 direct job opportunities with a total investment of SR3.383 billion.

Meanwhile, Saudi Silk Road Industrial Services signed a memorandum of understanding at a total value of SR3.75 billion for a polycarbonate and polyethylene factory with the Chinese company.

Earlier in the year, the Saudi National Center for Industrial Development (SNCID) said work is currently underway on more than 60 industrial projects being developed across the kingdom at a total investments of about SR74 billion ($19.7 billion).

Almost 33 per cent of the proposed projects have either been completed or are under process. These projects are worth SR20 billion and will provide some 7,000 direct jobs, reported Saudi Gazette.

On completion, these projects will generate more than 34,000 direct jobs, it stated. SNCID said there will be a focus on multiple efforts to develop promising and advanced industries, such as automobiles, airplanes and ships and those manufacturing electrical machinery and equipment related to basic industries and water desalination.

They will be linked with artificial intelligence to provide the feedstock locally and internationally and come up with products that can compete globally.

“These projects will result in new partnerships with more than 20 local and international companies in bid to develop investment opportunities and empowerment and localisation of important industries in the kingdom,” remarked it’s CEO Nizar Hariri.

Saudi National Center for Industrial Development, earlier known as the National Industrial Clusters Development Programme, is carrying out many tasks and at all levels, stated its top official.

“It has many projects, some are completed while others are underway. All projects are expected to be completed in the near future,” stated Hariri.

Among these projects the major one were those linked to mineral products, the expansion of the center’s mining activities, food processing industry, and manufacturing equipment, medical protection supplies, and biological medicines and vaccines, he added.

Jubail airport project in Q4

Saudi Arabia’s General Authority for Civil Aviation (GACA) and the Royal Commission of Jubail and Yanbu (RCJY) are expected to award the main construction contract for their $150 million airport project in Jubail Industrial City, Eastern Province by the fourth quarter of 2020, a Zawya report said according to a source.

"The tender was issued on 7 October 2019 with bid submission on 18 August 2020. Bid evaluation is underway, and the main contract is expected to be awarded in December 2020," the source told Zawya Projects, adding that the project completion is scheduled for December 2023.

The bidders for the terminal building includes Shar Construction, Al Mashariq Company, Jawdat Contracting Co, Rawabi Holding Co, Al Rawaf Trading & Contracting, China Railway 18th Bureau Group Co, Shade Corporation, Tareq Al Jaafari Contracting, Shapoorji Pallonji & Co, Abdul Ali Al Ajmi Company, Al Kifah Contracting Co, Al Ayuni Investment & Contracting, Al Yamama, Huta Group and Khonaini International, sources from seven bidders confirmed with Zawya Projects.

The scope of work includes the construction of a passenger terminal building, runway, a control tower, parking spaces, access roads, load centres and utility networks, a second source told Zawya Projects. The annual passenger handling capacity of the airport would be 500,000 passengers.

AERTEC Solutions is the design consultant, the second source added.

A Sipchem facility

Jubail Industrial Port

King Fahad Industrial Port in Jubail has exported 47 materials of different refined petroleum products and petrochemicals during April 2020.

The exports amounted to 5.4 million tonnes and were transported via 152 vessels, according to a statement by the Saudi Ports Authority (Mawani) on Wednesday.

Exports of urea totalled 157,000 metric tonnes last April, up by 51 per cent when compared to the same period a year earlier.

Moreover, diesel exports registered 900,000 metric tonnes, fertilisers exports reached 460,000 metric tonnes, while methanol and kerosene exports totalled 400,000 metric tonnes each.

Yanbu Cement Q3 revenue

Saudi-based Yanbu Cement has recorded a revenue of SR240 million ($64 million) for third quarter, up 5.4 per cent over the same period last year.

Growth in sales was supported by a 35 per cent YoY growth in volume, though the same was tempered by a more than 20 per cent fall in average realsation, according to Al Rajhi Capital, a leading financial services provider in Saudi Arabia.

Continued growth from mortgages aided the increase of volume, while heavy competition among the local players kept the prices under check.

Cost of sales and operating costs fell by 1.2 per cent YoY and 34.2 per cent YoY respectively, aided by higher operating leverage, stated Al Rajhi Capital in its review.

"Cement sales volume for Q3 came in at 1.16 million tonne, 5 per cent higher than our estimate, though the average realization at SR208/ton was lower than our estimate of SR212/ton," it added.

Al Rajhi Capital said this was slightly higher than its estimate of SR234 million, but lower than the average consensus estimates of SR253 million.

For the nine months, Yanbu Cement registered a volume growth of 27.5 per cent YoY. Growth was aided by strong growth in real estate activities in the local market.

"Going forward, we expect this trend to continue, though growth rates for 2021 will be tempered by the higher base in 2020. Average realizations are likely to continue to remain subdued, given the competitive nature of the local market," said the Saudi group in its statement.

After taking into account the current quarter performance, we increase our target price to SR40/share from the earlier target price of SR30/share and have revised our rating from the earlier “Neutral” to “Overweight”, he added.