The electric vehicle plant being built in Saudi Arabia by Lucid Group will likely be one of three assembly plants in the country, as the kingdom pushes for mega investments in new sectors, its investment minister has said.
“We just broke ground on the world's most exciting electric vehicle assembly plant,” Khalid Al Falih told a panel discussion at the World Economic Forum in Davos on Wednesday.
“150,000 vehicles will be assembled in Saudi Arabia in two years and this is one of likely three mega assembly plants."
He did not provide details on who is investing in the additional plants and whether they will build EVs or conventional combustion engine vehicles.
Earlier this month, Lucid Group, which is backed by Saudi Arabia's sovereign wealth fund, the Public Investment Fund (PIF), formally signed agreements for its new factory in the kingdom with a capacity of 155,000 units a year.
The assembly plant, the first in the Arab world’s largest economy, will push Lucid’s global production capacity to 500,000 EVs a year in the coming years, as it caters to a growing global demand for EVs, the company said at the time.
The US-listed car maker signed preliminary agreements in February with several Saudi entities, including the Ministry of Investment, the Saudi Industrial Development Fund, the Economic City at King Abdullah Economic City, and Gulf International Bank for the new plant.
These deals are estimated to provide financing and incentives worth $3.4 billion to Lucid over the next 15 years to build and operate the assembly plant in the kingdom.
Saudi Arabia, the world’s biggest oil exporter, is overhauling its economy under its overarching Vision 2030 agenda. Driving foreign investments and expanding its manufacturing base are among critical pillars of Riyadh’s strategy to cut its dependence on oil revenues.
Expanding into EV manufacturing will also support the kingdom’s sustainable development goals, which apply to all sectors of its economy. Saudi Arabia aims to achieve net-zero carbon emissions by 2060 through a circular carbon economy approach.
The PIF remains central to Riyadh’s efforts to diversify its economy and is at the heart of the kingdom’s investment strategy at home and abroad.
Under a five-year strategy announced last year, the fund aims to more than double the value of its assets under management to $1.07 trillion.
To a question on whether the kingdom still has appetite for investments in the US given its lukewarm relations with the White House, Finance Minister Mohammed Al Jadaan said on Wednesday that the PIF invests on the government’s behalf and that “they have not been shy in investing in the US”.
“We are continuing to invest in the US and elsewhere and the relationship [with the US] has been very good all over, despite whatever you hear,” he added.
PIF is also focusing on developing Saudi Arabia's local economy, and has committed to spend $40bn annually in the kingdom.
The sovereign fund is backing the $500bn futuristic city of Neom and multi-billion-dollar projects near Riyadh and on the Red Sea coast of the kingdom.
“All of the giga projects with the PIF are going [ahead] and unlocking and catalysing sectors that are open for foreign direct investment,” Mr Al Falih said.
In October, Saudi Arabia’s Crown Prince Mohammed bin Salman launched the National Investment Strategy, which seeks to net 388bn Saudi riyals ($103.47bn) in FDI annually by 2030. The kingdom aims to increase the contribution of the private sector to its gross domestic product to 65 per cent and increase the share of FDI to 5.7 per cent of its GDP.
We just broke ground on the world's most exciting electric vehicle assembly plant
Khalid Al Falih,
Investment Minister, Saudi Arabia
Last year, Saudi Arabia received close to $20bn in FDI, up 257 per cent annually, with the second half of the year showing a 23.7 per cent year-on-year increase, the Ministry of Investment said at the time.
“We wanted to increase our total capital formation in absolute terms, but also as a percentage of our rapidly increasing GDP,” Mr Al Falih said.
He said the kingdom is following its growth plans and is also ahead of these in many aspects.
“Not only [is] our GDP growth [accelerating] where we're crossing the $1 trillion threshold, we’re on our way to $1.6tn to $1.8tn, which we project will position us as the 15th largest economy,” he added.
History's medical milestones
1799 - First small pox vaccine administered
1846 - First public demonstration of anaesthesia in surgery
1861 - Louis Pasteur published his germ theory which proved that bacteria caused diseases
1895 - Discovery of x-rays
1923 - Heart valve surgery performed successfully for first time
1928 - Alexander Fleming discovers penicillin
1953 - Structure of DNA discovered
1952 - First organ transplant - a kidney - takes place
1954 - Clinical trials of birth control pill
1979 - MRI, or magnetic resonance imaging, scanned used to diagnose illness and injury.
1998 - The first adult live-donor liver transplant is carried out
Cinco in numbers
Dh3.7 million
The estimated cost of Victoria Swarovski’s gem-encrusted Michael Cinco wedding gown
46
The number, in kilograms, that Swarovski’s wedding gown weighed.
1,000
The hours it took to create Cinco’s vermillion petal gown, as seen in his atelier [note, is the one he’s playing with in the corner of a room]
50
How many looks Cinco has created in a new collection to celebrate Ballet Philippines’ 50th birthday
3,000
The hours needed to create the butterfly gown worn by Aishwarya Rai to the 2018 Cannes Film Festival.
1.1 million
The number of followers that Michael Cinco’s Instagram account has garnered.
How Beautiful this world is!
The specs: Lamborghini Aventador SVJ
Price, base: Dh1,731,672
Engine: 6.5-litre V12
Gearbox: Seven-speed automatic
Power: 770hp @ 8,500rpm
Torque: 720Nm @ 6,750rpm
Fuel economy: 19.6L / 100km
MATCH INFO
Uefa Champions League semi-final, first leg
Bayern Munich v Real Madrid
When: April 25, 10.45pm kick-off (UAE)
Where: Allianz Arena, Munich
Live: BeIN Sports HD
Second leg: May 1, Santiago Bernabeu, Madrid
At a glance
Fixtures All matches start at 9.30am, at ICC Academy, Dubai. Admission is free
Thursday UAE v Ireland; Saturday UAE v Ireland; Jan 21 UAE v Scotland; Jan 23 UAE v Scotland
UAE squad Rohan Mustafa (c), Ashfaq Ahmed, Ghulam Shabber, Rameez Shahzad, Mohammed Boota, Mohammed Usman, Adnan Mufti, Shaiman Anwar, Ahmed Raza, Imran Haider, Qadeer Ahmed, Mohammed Naveed, Amir Hayat, Zahoor Khan
Thor: Ragnarok
Dir: Taika Waititi
Starring: Chris Hemsworth, Tom Hiddleston, Cate Blanchett, Jeff Goldblum, Mark Ruffalo, Tessa Thompson
Four stars
MATCH INFO
Europa League final
Who: Marseille v Atletico Madrid
Where: Parc OL, Lyon, France
When: Wednesday, 10.45pm kick off (UAE)
TV: BeIN Sports
2018 ICC World Twenty20 Asian Western Regional Qualifier
The top three teams progress to the Asia Qualifier
Final: UAE beat Qatar by nine wickets
Third-place play-off: Kuwait beat Saudi Arabia by five runs
Table
1 UAE 5 5 0 10
2 Qatar 5 4 1 8
3 Saudi 5 3 2 6
4 Kuwait 5 2 3 4
5 Bahrain 5 1 4 2
6 Maldives 5 0 5 0
ATP WORLD No 1
2004 Roger Federer
2005 Roger Federer
2006 Roger Federer
2007 Roger Federer
2008 Rafael Nadal
2009 Roger Federer
2010 Rafael Nadal
2011 Novak Djokovic
2012 Novak Djokovic
2013 Rafael Nadal
2014 Novak Djokovic
2015 Novak Djokovic
2016 Andy Murray
2017 Rafael Nadal
2018 Novak Djokovic
2019 Rafael Nadal
The Good Liar
Starring: Helen Mirren, Ian McKellen
Directed by: Bill Condon
Three out of five stars
Abaya trends
The utilitarian robe held dear by Arab women is undergoing a change that reveals it as an elegant and graceful garment available in a range of colours and fabrics, while retaining its traditional appeal.
Wicked: For Good
Director: Jon M Chu
Starring: Ariana Grande, Cynthia Erivo, Jonathan Bailey, Jeff Goldblum, Michelle Yeoh, Ethan Slater
Rating: 4/5
UAE currency: the story behind the money in your pockets
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
The%20specs
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ESSENTIALS
The flights
Emirates, Etihad and Swiss fly direct from the UAE to Zurich from Dh2,855 return, including taxes.
The chalet
Chalet N is currently open in winter only, between now and April 21. During the ski season, starting on December 11, a week’s rental costs from €210,000 (Dh898,431) per week for the whole property, which has 22 beds in total, across six suites, three double rooms and a children’s suite. The price includes all scheduled meals, a week’s ski pass, Wi-Fi, parking, transfers between Munich, Innsbruck or Zurich airports and one 50-minute massage per person. Private ski lessons cost from €360 (Dh1,541) per day. Halal food is available on request.
Turkish Ladies
Various artists, Sony Music Turkey
