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RIYADH: Saudi Arabia’s budget airline flynas has signed a $3.73 billion agreement with Airbus to buy 30 aircraft, Saudi state TV reported on Monday.
The deal was signed at the Paris Air Show by Bandar Al-Mohanna, flynas CEO and managing director, and Christian Scherer, Airbus chief commercial officer and head of Airbus international, in the presence of Saudi Minister of Transport and Logistics Saleh Al-Jasser, Abdulaziz Al-Duailej, president of the General Authority of Civil Aviation, and Ayed Aljeaid, chairman of the board of NAS Holding.
Looking to reach new long-haul destinations across its route map, flynas’ agreement includes 10 A321XLRs. These planes will join the airline’s existing fleet of 21 A320neos, 13 A320ceos, and four A330-300s. Between January and the end of this year, 19 A320neos would have been added to the operator’s fleet. Four have already been delivered in 2023 alone.
In a statement, Al-Mohanna said: “The A320neo Family brings unmatched benefits to our passengers, offering exceptional operational performance and environmental benefits while helping us provide unique travel experiences at low-cost.”
Commenting on the deal, Scherer said: “Unbeatable economics, longer range capability, and the most spacious single aisle cabin have made the A320neo Family the preferred choice of airlines worldwide.”
The planemaker also announced a record 500-plane deal with Indian airline IndiGo on the first day of the air show. The world’s largest air show, which alternates with Farnborough in Britain, is at Le Bourget for the first time in four years after the 2021 edition fell victim to the pandemic.
French President Emmanuel Macron flew in to the packed aerospace bazaar by helicopter and watched a flying demonstration including Airbus’ latest jet development, the A321XLR, and air power including the French Rafale fighter.
On the civilian side, plane makers arrived with growing demand expectations as airlines rush for capacity to meet demand and help reach industry goals of net zero emissions by 2050.
Industry executives say as many as 2,000 jet orders are up for grabs worldwide in a resurgent commercial jet market, on top of those provisionally announced already, as airlines try to fill a void left by sharp falls in activity in the COVID-19 crisis.
Only a portion of these potential fresh deals will be ready in time for this week’s air show, which could see a mixture of new and repeat announcements, they said.
IndiGo’s deal highlights the growing importance of India, the world’s fastest-growing aviation market, serving the largest population, to plane makers.
American Airlines ordered 460 single-aisle aircraft: 260 Airbus A320s and 200 Boeing 737, at a catalog price of $38 billion. Four Chinese airlines — Air China, China Eastern, China Southern, and Shenzhen Airlines — placed simultaneous orders for a total of 292 A320neo aircraft from Airbus worth $37 billion at list prices.
United Airlines ordered 270 medium-haul aircraft: 200 Boeing 737 MAX and 70 Airbus A321neo worth $35.4 billion at catalog prices.
Defense side
France’s Thales also announced a contract from Indonesia for 13 long-range air surveillance radars.
Looking ahead to the rest of the show, Airbus is expected to confirm that Qantas is exercising options for nine more A220s, as announced by the airline this year.
The plane maker is also close to a potentially large order for narrow-body jets from Mexican low-cost carrier Viva Aerobus, industry sources said on Sunday.
The number of planes being discussed was more than 100, they said, though by Monday some sources said the number in the final deal could settle closer to 60.
The Mexican carrier has long been a fierce battleground between Boeing and Airbus.
RIYADH: Saudi Arabia’s ongoing efforts to enhance food security received a significant boost as the Kingdom’s Agricultural Development Fund signed financing contracts worth SR926 million ($246.8 million) in the feed industry, animal production and dairy sectors.
These contracts aim to support the import of key agricultural products, including maize, soybeans and barley, which are vital for sustaining the country’s food supply.
The agreements encompass a range of projects including initiatives such as the establishment of an agricultural product marketing center, cold storage facilities, and a broiler and poultry farming project.
The fund was established in 1961 through a royal decree with the primary objective of providing financial support to agricultural activities in the country.
By supporting diverse agricultural ventures, it seeks to fortify food security, address any potential supply shortages, and ensure the stability of food supply chains.
Earlier in June, the fund provided funding of SR1.5 billion to local farmers, primarily supporting greenhouse vegetable production, poultry breeding, and fish and shrimp farming.
The loans also extended support to refrigeration warehouses and date manufacturing and marketing centers.
These loan approvals underscore the fund’s commitment to its developmental and financing role in the agricultural sector, aligning with the Ministry of Environment, Water and Agriculture’s policies and the Kingdom’s overarching food security strategy.
Notably, the fund has demonstrated its dedication to supporting agricultural activities through substantial investments.
In the first three months of 2023 alone, the fund granted development and investment loans exceeding SR2.3 billion, surpassing the SR861 million allocated during the same period in 2022.
Loans surged 167 percent year over year in the first quarter of 2023, benefiting small farmers, breeders and poultry projects in various regions.
Nairiyah, Rabigh, Al-Ghat and Al-Olaya also received financial support, as stated in an announcement in March.
The increased financial support signifies the fund’s proactive approach to bolstering the farming sector and optimizing the supply chain.
The financing contracts and loan approvals emphasize Saudi Arabia’s commitment to achieving food security and reducing dependency on imports by strengthening domestic agricultural production and supporting vital projects across the value chain.
RIYADH: Saudi Arabia’s economy is projected to grow at a higher rate than the global average as the Organisation for Economic Co-operation and Development revised the Kingdom’s economic growth outlook upward to 2.9 percent in 2023.
This comes after the OECD in its March interim report projected the Kingdom’s gross domestic product to grow at 2.6 percent.
According to the OECD’s latest Economic Outlook published on July 7, global GDP growth this year is projected to be 2.7 percent, the lowest annual rate since the global financial crisis, with a modest improvement to 2.9 percent expected for 2024.
“Falling energy prices and headline inflation, easing supply bottlenecks and the reopening of China’s economy, coupled with strong employment and relatively resilient household finances, all contribute to a projected recovery. Nevertheless, the recovery will be weak by past standards,” noted OECD Chief Economist Clare Lombardelli in the report.
Meanwhile, the OECD report projected Saudi Arabia to attain 3.6 percent GDP growth in 2024, slightly lower than the previous projection of 3.7 percent announced in March.
Still, the Kingdom remains one of the bright stops in the seemingly gloomy world economy as countries continue to battle high inflation and slowing demand.
With the OECD’s latest forecasts, Saudi Arabia surpassed the growth rate anticipated by the credit rating agency Moody’s Investors Service earlier in March.
In its macro-outlook for G20 economies, Moody’s upgraded the Kingdom’s growth to 2.5 percent in 2023 from its previous forecast of 1.7 percent announced in November.
For 2024, it raised the growth to 3 percent from the previous forecast of 2.6 percent.
While the Kingdom’s growth forecast falls short of its 2022 projection of 8.7 percent, it remains one of the five countries to exceed the average global growth rate which is predicted to fall to 2.7 percent in 2023 from the last year’s projection of 3.3 percent.
The growth rates of India, China, Indonesia and Turkey are also expected to exceed the global average in 2023 to reach 6 percent, 5.4 percent, 4.7 percent and 3.6 percent respectively.
However, the OECD expects the world economy to pick up in 2024 to hit 2.9 percent.
“This projected recovery, while almost unchanged from our interim projections in March, maintains the slightly more optimistic outlook that had been predicted and which we are now seeing materialize,” said OECD’s Secretary-General Mathias Cormann.
These optimistic predictions are supported by the lower energy prices that are easing the strain on household budgets.
The recovery of business and consumer sentiment and China’s reopening also boosted global activity, added the report.
Cormann stressed that it is necessary that policymakers limit inflation and loosen up broad fiscal support via targeting effective fiscal measures.
“While continuing to respond to the immediate economic challenges, it remains important to prioritize structural reforms to boost productivity, including by promoting competition, reviving investment, increasing female workforce participation and alleviating supply constraints, while securing the green and digital transformations of our economies,” he added.
RIYADH: With the middle-income countries seeing slower growth in demand, the global trade in agricultural commodities is estimated to grow at 1.3 percent annually, half the recorded pace in the past decade, according to a UN report.
In their 2023-2032 outlook, the Food and Agriculture Organization of the UN and the Organization for Economic Cooperation and Development stated that maize, wheat and soybeans will experience the biggest drop in annual growth despite being the highest contributor to trade in the past decade.
The expansion of livestock and fish production is expected to grow at a slower rate of 1.3 percent annually over the next decade. Poultry meat is projected to account for nearly half of the overall increase in total meat production by 2032.
With regard to milk production, the report said that a 1.5 percent annual growth is forecast globally over the next 10 years.
India and Pakistan will play a significant role, contributing to over half of the increase and accounting for approximately one-third of the global milk output in 2032.
However, milk production in the EU is projected to experience a slight decline due to the ongoing shift toward more environmentally sustainable production systems.
South and Southeast Asia are expected to experience a surge in net imports of agricultural commodities, continuing the trend of becoming net importers in recent years. The region’s strong demand growth is the primary driver behind this projection.
Meanwhile, sub-Saharan Africa is projected to witness a nearly doubled trade deficit in major food items by 2032, largely due to rapid population growth outpacing other regions.
On the other hand, Latin America anticipates an expansion of its agricultural trade surplus by 17 percent, with the exported share of agricultural production projected to reach 40 percent by 2032.
North America is expected to maintain its position as the second-largest exporter of agricultural commodities globally, although its net export position may be slightly impacted by robust domestic consumption growth.
Agricultural emissions to increase by 7.5%
The report further projected that global direct agricultural emissions are set to increase by 7.5 percent over the coming decade.
Livestock production is expected to contribute to 80 percent of the overall increase in greenhouse gas emissions.
The majority of these emissions are projected to occur in middle- and low-income regions, primarily due to the higher growth in ruminant production, which tends to have higher emission intensity.
In addition, synthetic fertilizers play a significant role in direct greenhouse gas emissions. Factors such as high energy prices, domestic policies, and market access developments will influence the global use of fertilizers, leading to potential shifts in their usage patterns.
RIYADH: Saudi Arabia’s small and medium enterprises are witnessing robust growth in entrepreneurial activity, with the total number of registered SMEs reaching 1.2 million at the end of the first quarter, as the Kingdom pushes ahead with its goal to expand local businesses.
This includes more than 88,000 new businesses which were established throughout the Kingdom in the first quarter of 2023, registering 4.8 percent growth over the fourth quarter of 2022, and a striking 179 percent growth from 2016, according to the latest report from SME General Authority, also known as Monsha’at.
The growth was driven by a combination of supporting business policies, advantageous macroeconomic circumstances, prospective investments, and an established entrepreneurial culture.
“The Kingdom has undertaken a series of bold initiatives to develop its economy, reduce its dependency on oil, and contribute to achieving Vision 2030’s goal of building a diversified and sustainable ecosystem, developing SMEs, and supporting entrepreneurs through private and public sector cooperation,” Munir Mohammad Nasser bin Saad, chairman of Al-Madinah Al-Munawarah Chamber said in the report titled SME Monitor.
He commended the role played by Monsha’at to “enable the wider entrepreneurship ecosystem through its many innovative services designed to help SMEs overcome challenges and build the businesses of tomorrow.”
Saudi Arabia’s SME ecosystem extends throughout the country, but Riyadh region continues to dominate the sector, as the capital city fosters dynamic growth across several key industries, the report said.
The first quarter report stated that Riyadh “played a significant role” as it had the highest percentage of SMEs at a rate of 41.4 percent, followed by Makkah and Eastern province at 18.9 percent and 11.1 percent respectively.
The Kingdom’s emerging new SMEs also managed to attract $359 million in venture capital funding in the first quarter of 2023.
The unprecedented growth in SME activities saw the sector employing 6.5 million people in Saudi Arabia by the end of first quarter.
Meanwhile, Monsha’at also helped launch the SME Bank which played an important role in increasing the productivity of SMEs and boosting their contribution to the gross domestic product to 35 percent by 2030.
Also noteworthy were the achievements of the Biban 2023 Forum — an event held in Riyadh in March and attended by an estimated 145,000 visitors from all over the world — which generated over $13.8 billion in agreements and announcements for SMEs in the Kingdom.
Monsha’at also recently obtained three international ISO certificates for applying the best international practices and standards to build a competitive and sustainable ecosystem spurring growth across various sectors, the report noted.
RIYADH: In one of the major power equipment deals, Saudi Arabia’s Electrical Industries Co. has received a SR153 million ($40.78 million) contract to supply transformers to the oil giant Saudi Aramco, the company said in a bourse filing.
The electrical equipment manufacturer said it won the 20-month contract through its subsidiary Saudi Power Transformers Co., adding that the deal will positively impact its fiscal position in two years, EIC said in a bourse statement released on Thursday.
“The contract is expected to have a positive impact on the financial results of the company for the year 2025,” the statement added.
EIC was established with the merging of two leading electrical manufacturers — Wahah Electric Supply Co. of Saudi Arabia and the Saudi Transformers Co. — to meet the growing demand for electrical equipment in the Kingdom.
In April, EIC’s subsidiary Saudi Power Transformers Co. was also awarded a transformers provision contract worth SR79 million, the bourse revealed at the time.
The project was awarded by the Ministry of Electricity and Water and Renewable Energy in Kuwait.
This comes after another deal its subsidiary signed in May with Al-Babtain Contracting Co. for SR66.6 million to supply electrical transformers.
Last year, EIC reported a 92.8 percent increase in its net profits to SR94.17 million compared to SR48.84 million recorded in 2021.
As for the company’s revenues, they rose from SR770.7 million in 2021 to SR1.06 billion in 2022, showing a 38.3 percent increase annually.
Companies in the Kingdom are making continued efforts to develop electricity locally, with the state-owned Saudi Electricity Co. planning to increase expenditure in 2023.
In its financial presentation made in March, the Public Investment Fund-owned firm said that it intended to allocate between SR30 billion and SR35 billion for its 2023 capital expenditure.
This is at least 10 percent higher than its 2022 capex which stood at SR27.4 billion.
Even though SEC did not provide a clear breakdown of the allocated amount, it is projected that expenditure in transmission and distribution infrastructure will be a priority considering that they dominated the firm’s capital expenditure for the past three years.