Expert Interview, News from DACH
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14.05.2024
Interview with Dr. Dalia Samra-Rohte (Delegate of the German Industry for Saudi Arabia) and Marie-Christin Gabel (Managing Partner MEAI, Departer)
Saudi Arabia’s ambitious Vision 2030 plan aims to diversify its economy, reduce its dependence on oil and transform various sectors, creating a wealth of opportunities for international businesses.
Dr. Dalia Samra-Rohte, Delegate of the German Industry for Saudi Arabia, Bahrain and Yemen at the AHK – German-Saudi Arabian Liaison Office for Economic Affairs (GESALO), shares her insights on the evolving landscape in Saudi Arabia and how German companies can successfully navigate and contribute to these developments.
In an interesting conversation with Marie-Christin Gabel, Dr. Samra-Rohte discusses key sectors, challenges and strategies for success in the Saudi market.
Dr. Dalia Samra-Rohte (DSR): Absolutely. One of the primary focus areas is the energy sector, specifically hydrogen. Saudi Arabia is building one of the largest green hydrogen plants, with significant contributions from German companies. Another focus is on recycling; currently, 98% of waste goes to landfills, but the goal is to have 98% of waste recycled, again with substantial German involvement. Water and wastewater management are also key sectors. Additionally, Saudi Arabia is undergoing one of the largest healthcare transformations, focusing on value-based care and digitalization, with German companies playing a crucial role, particularly in building one of the first digital hospitals.
Marie-Christin Gabel (MCG): Saudi Arabia is driving its Vision 2030, focusing on diversifying its industry, particularly the energy sector. Can you elaborate on the opportunities for German companies in this area?
MCG: Besides energy and healthcare, what other sectors are seeing growth and opportunities for German companies?
DSR: The automotive industry is emerging as a significant sector. Saudi Arabia aims to produce one million electric vehicles by 2030, attracting German OEMs and suppliers. Two major projects are underway: a middle-class car through a joint venture between PIF and South Korea’s Foxconn and a high-end car by Lucid, in which PIF has invested. Tourism and entertainment are also expanding rapidly, providing diverse opportunities.
MCG: What challenges do German companies face when entering the Saudi market?
DSR: The market can be challenging as it is relatively new for many companies, requiring a long-term commitment and frequent travel to establish personal contacts. Understanding and selecting the right local partners is crucial, especially for mega projects. Payment issues can also arise, so it’s essential to secure upfront payments or appropriate guarantees.
MCG: How does doing business in Saudi Arabia compare to other GCC countries?
DSR: Unlike neighboring GCC countries where businesses are accustomed to dealing with diverse nationalities, in Saudi Arabia, there is a growing number of highly skilled and educated Saudis returning from abroad. These individuals often speak multiple languages and bring valuable international experience, facilitating business interactions.
MCG: What are the key steps for establishing long-term business relationships in Saudi Arabia?
DSR: Presence is vital. Companies need to establish a physical presence in Saudi Arabia, particularly with the regional headquarter initiative starting in January 2024. Having regional headquarters in Saudi Arabia is necessary to participate in government tenders and to integrate into the local value chain.
MCG: How is the labor market evolving in Saudi Arabia and what impact does Saudization have on businesses?
DSR: Saudization is an integral part of doing business in Saudi Arabia. Many German SMEs on the ground now have 40-50% Saudi employees and some large German corporations even have Saudi CEOs. This shift demonstrates the growing engagement and integration of Saudis in various business sectors.
MCG: What is the outlook for the Saudi economy in the medium and long term?
DSR: By 2030, Saudi Arabia aims to diversify its economy, with significant investments in tourism, entertainment and green energy sectors like green and blue hydrogen. These initiatives are designed to reduce dependence on oil and gas, contributing to a more sustainable and diversified economic structure.
MCG: Can you share any success stories of German companies in the Saudi market?
DSR: Certainly. Without naming specific companies, we’ve seen substantial success among German SMEs. For instance, one SME played a crucial role in a major hydrogen project. Others in facility management and oil and gas components are setting up value chains in the Eastern Province, demonstrating the diverse opportunities available.
Saudi Arabia’s Vision 2030 presents a dynamic landscape with vast opportunities across various sectors. German companies, with their expertise and innovation, are well-positioned to contribute significantly to these developments. By understanding the local market, establishing a strong presence, and building robust partnerships, they can navigate the challenges and capitalize on the opportunities in this transformative era for Saudi Arabia.
Biography about our interview partner Dr. Dalia Samra-Rohte
Dr. Dalia Samra-Rohte is the Delegate of the German Industry & Commerce for Saudi Arabia, Bahrain and Yemen from mid-August 2019.
Dr. Samra-Rohte is a recognized counterpart and enabler for market entry strategies to the Region. Her thought leadership is regularly appreciated at national and international conferences for economic development and market entry topics. She is also an expert for digital start-ups and focusing on female entrepreneurship.
Beforehand she was the Deputy CEO of the German- Emirati Joint Council (AHK) and Managing Director of the AHK Office in Abu Dhabi. She has set up the Abu Dhabi office in 2004 and in her capacity as a Deputy CEO she was also coordinating market entry for Oman and Kuwait. Prior to her work in the UAE she worked at the Arab-German Chamber of Industry and Commerce (AHK) in Cairo, Egypt for three years as head of the economic division. After finishing her studies at the American University of Cairo, she obtained her PhD in Political Science at the Free University of Berlin (Freie Universität Berlin). Before entering the AHK network, she worked on projects in Germany as well as the European Union in in Brussels.
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