Japan-Saudi Arabia

Industrial Cooperation Task Force

February 2013

Takashi Mitsuka Vice Secretary General, Japan-Saudi Arabia Industrial

Cooperation Task Force, JCCME

Japan-Saudi Arabia Industrial Cooperation

- Past activities, achievements and future policy -

Kicked off on the basis of agreement between the leaders of Japan and Saudi Arabia.

1. Overall Picture of Industrial Cooperation

Energy Cooperation (as reference) Industrial Cooperation

Regular consultation meeting on energy policies

between Agency for Natural Resources and Energy and

Ministry of Petroleum and Mineral Resources

A project to store crude oil from Saudi

Arabia in the national oil reserve tanks in

Okinawa (started in February 2011)

Japan-Saudi Energy Consultation meeting

Stockpile cooperation

The following projects are underway for Ministry of

Petroleum and Mineral Resources, Saudi Aramco, and

Ministry of Water and Electricity:

(1) Solar power generation feasibility study

(2) Implementation of policy development training and

workshop

Renewable energy/Energy saving cooperation

The “Japan-Saudi Arabia Industrial Cooperation Task Force” was established on the

“ Joint Statement between the Kingdom of Saudi Arabia and Japan ” in April 2007.

As employment creation through industry diversification is an urgent task for the

kingdom, the Ministry of Commerce and Industry and Ministry of Petroleum and

Mineral Resources are working vigorously.

1. Assistance for Japanese firms

considering investment in

Saudi Arabia

2. Assistance in human resource

development in Saudi Arabia

3. Assistance in formulating small

and medium enterprise

development policy

Activities of Japanese task force: Three Pillars

Synergy

Riyadh Business Support Office

External view of Saudi Electronics & Home

Appliance Institute (SEHAI)

Japan-Saudi Joint workshop at Riyadh Chamber

of Commerce and Industry

1

Minister Edano and Minister of

Petroleum H.E. Al-Naimi

(October 2011)

Minister Edano and Minister

of Commerce & Industry H.E.

Alireza (October 2011) Source: KSA Embassy Source: KSA Embassy

2

1st contacts: Questionnaires & Business Seminars w/4,000 companies

2nd contacts: Face-to-face visiting w/950 companies

Advisory & consultation for prospective companies to elaborate the business models

Information and solution on marketing, JV partners, legal & taxation, human resources etc.

TF members take care of respective companies throughout procedures up to investments

Market survey missions to KSA for 58 projects (93 trips)

Business matching w/prospective Saudi partners

Feasibility studies for 13 projects

Exploiting Japan-Saudi P-P partnership

2.1 Assistance for Japanese firms to invest in Saudi Arabia

Methodologies of Encouraging Japanese firms to invest in Saudi Arabia

2.1 Assistance for Japanese firms to invest in Saudi Arabia

Azbil (announced in May 2012)

Importance/Achievement

Outline of the business Scene of signing ceremony control valve

● Business details: Production/sales/maintenance of control valves

● Form of investment: Establishment of a local joint venture company in charge of local

production/sale

● Scale of business: Investment amount: Approx. 1.9 million USD

Target sales: 26.7 million USD (FY2015)

● Site: Damman

● Business starting year: FY2013

Five projects get underway now investing in automobile manufacturing, metal processing, water

treatment and IT-related areas, contributing to industrial diversification of Saudi Arabia.

Photos by the

courtesy of

respective company

3

Isuzu Motors (announced in February 2011)

Manufacture/Sale of automobiles, one of Saudi Arabia’s priority industrial cluster areas.

The first plant to produce finished cars in Saudi Arabia. A founding project for Saudi automobile industry.

In the future, it is expected that the kingdom will become a manufacturing/export base for the surrounding countries.

Importance/Achievement

Outline of the business Scene of signing ceremony

Isuzu F series

● Business details: Assembly/Sale of middle-size trucks

● Form of investment: Establishment of a local corporation in charge of local assembly/sales

● Scale of business: Investment amount: Approx. 116 million USD

Target volume: 600 units per year initially; 25,000 units in the future

● Site: Damman 2nd Industrial Estate

● Business starting year: FY2012

NOTE: 1USD = 75 yen

NOTE: 1USD = 75 yen

By providing its valve products to not only new plants but also existing plants which need rehabilitation, Azbil will contribute to

development of Saudi Oil & Gas industry.

In the future, Azbil provide the total solution for whole life cycle of control valve in KSA.

J-Power Systems/Marubeni Metals (Announced in April 2009)

Manufacture/Sale of processed metal, one of Saudi Arabia’s priority industrial cluster areas.

Creates employment for Saudi Arabian people and transfers technology, keeping an eye on export for Gulf countries/European markets.

Stable supply of cables for offshore oil /gas field development by Aramco.

Importance/Achievement

Outline of the business Cables to be provided Loading at the port plant

Business details: Manufacture/Sale of underwater power cable

Form of investment: Establishment of a local joint venture company in

charge of local production/sale

Scale of business： Investment amount: Approx. 20 million USD

Target sales: Approx. 33 million USD (period ending

in December 2011)

Site: Eastern state

Business starting year: FY2011

Five projects get underway now investing in automobile manufacturing, metal processing, water

treatment and IT related areas, contributing to industrial diversification of Saudi Arabia.

Photos by the

courtesy of

respective company

NOTE: 1USD = 75 yen

2.1 Assistance for Japanese firms considering investment in Saudi Arabia

4

Toyobo/Itochu (announced in February 2010)

The first manufacturing/sales business of RO membrane elements for seawater desalination in Saudi Arabia.

Contributing to stable supply of freshwater to satisfy Saudi Arabia’s rapidly increasing demand.

Importance/Achievement

Outline of the business Scene of signing ceremony

RO membrane elements

for seawater desalination

● Business details: Manufacture/Sale of RO membrane elements for seawater desalination

● Form of investment: Establishment of a local joint venture company in charge of local

production/sale

● Scale of business: Investment amount: Approx. 2.7 million USD

Target sales: 20 million USD (FY2011) --> 53 million USD (2015)

● Site: Headquarter/Plant: Rabigh (in Rabigh PlusTech Park),

Sales Dept: Riyadh

● Business starting year: FY2011

NOTE: 1USD = 75 yen

Index Holdings

(Announced in June 2008)

Transfers Japanese multi-media-related technologies and creates employment.

Also contributing to the social advancement of Saudi Arabian women.

Participating in the operation of “Multimedia Technologies Center for Excellence” established by the funds of Saudi Arabia (KACST)

Importance/Achievement

Outline of the business Business partnership signing ceremony with KACST

Contents provided by the company (examples)

Business details: Mobile contents & service dissemination business,

B to C information dissemination service business, entertainment business

Form of investment Establishment of a joint venture company with local businesses; partnership with

government agencies

Scale of business: Investment amount: Approx. 2 million USD

Site: Riyadh

Business starting year: FY2008

Five projects are now underway investing in automobile manufacturing, metal processing,

water treatment and IT-related areas, contributing to industrial diversification of Saudi Arabia.

Photos by the

courtesy of

respective company

2.1 Assistance for Japanese firms to invest in Saudi Arabia

5

Kubota (announced in March 2009)

Manufacture/Sale of processed metal, one of Saudi Arabia’s priority industrial cluster areas.

Creates employment for Saudi Arabian people and transfers technology.

Improves Saudi Arabia’s export competitiveness for Gulf countries.

Importance/Achievement

Outline of the business Cracking coil Reformer tube

Business details: Manufacture/Sale of cast steel products

Form of investment Establishment of a joint venture company with local businesses

Scale of business Investment amount: Approx. 20 million USD

Target sales: Approx. 100 million USD (FY2014); approx. 133 million USD

(2017)

Site: Damman 2nd Industrial Estate

Business starting year: February 2010

NOTE: 1USD = 75 yen

3. New Policies for Next 5 years

6

In order to promote Japanese investment to KSA more, the Joint Task Force

commits to strengthen and widen collaboration more than ever.

Policy No. 2

Development of strategic value-chains in specific industries / themes

Policy No. 1

Reinforcement of our capability to exploring promising companies

Policy No. 3

Establishment of KSA domestic supply-chain to support Japanese

companies who have already entered KSA

Activities • Held a large ministral forum in February 2012 to promote industrial cooperation between

Japan and Saudi Arabia • Conducted sessions focused on future energy, water business, small and medium-sized

enterprises and entrepreneurship, training and HRD, investment climate, downstream industries, healthcare, urban development, IT& smart cities, etc.

• More than 850 participants in industry, government, and academia from Japan and Saudi Arabia attended

JCCME Chairman Hiroshi Okuda signing a memorandum with Commerce and Industry Minister Tawfig Al-Rabiah

7

3.2 JTF’s Jumping Board toward Next 5 Years

URL: http://www.jccme.or.jp/ http://www/saudiarabia-jccme.jp

8

Arigatou Gozaimas! Shkran Jazeelan!!