Nationalizing industries related to water desalination and major Saudi industries Initiative

1. Royal Commission for Jubail and Yanbu Royal Commission At Yanbu Nationalizing industries related to water desalination and major Saudi industries Initiative SEC Power Forum - Riyadh, May 11,2013

2. Contents • Global Facts & Figures • Kingdom Facts & Figures • Investment Opportunities • Nationalization Initiative. • “Desalination and Major industries Park at Yanbu Industrial City”.

3. Global Desalination Facts & Figures • The demand for desalination capacity globally is projected to double by 2016. • Saudi Arabia is the #1 in desalination capacity in the world. • 15,988 plants in operation in the world • 244 plants under construction • 2011 = 66.5 million cubic meters per day • 2016 = 132 million cubic meters per day • Desalination Capacity • Saudi Arabia • USA • UAE • Spain • Kuwait • China • Japan • Qatar • Algeria • Australia Source: IDA 2010.

4. Desalination Investment 2010 - 2016 • The global desalination industry requires SR 393billion ($105 b) in capital investment from 2010 to 2016. • 50 - 60% (~$57.5 billion) of this investment will be directed toward the MENA region. • The Kingdom represents 18% of the world’s desalinated production. • SWCC plans to invest SR133 b. ($35 billion) in next decade. المصدر: IDA 2010

5. Global Desalination Facts & Figures • There are 115 countries that have plants to desalinate water. • SWCC capital investment in 2012 is SR15.5b ($4.1 billion). • Yanbu- Medinah plant under construction cost is $1.05 billion.

6. Kingdom Desalination Facts & Figures A total of 50% of all drinking water in the Kingdom comes from desalination. The Kingdom has the world’s highest water consumption per capita – more than 250 liters per person per day. Water demand is rising at the rate of 7% per year. The Kingdom has more than 35 desalination plants located in 16 cities. The amount of energy used for desalination is more than 50% of the total production cost. Many of the Kingdom’s water plants built in the 1970’s are nearing the end of their useful work life Source: The Oil & Gas Year Saudi Arabia 2012; SWCC.

7. Desalination Industry Requirements • There are 7 major products, services and suppliers required to support the desalination industry.

8. Spare part market in Kingdom • Some studies estimate that the size of the market for specialized materials and spare parts for desalination and major companies in kingdom exceed SR 200 billion annually.

9. Investment Opportunities in SWECC Saudi Arabia is among the top countries with the appropriate environment for investment where all key factors for investment are as follows: 1 – Governmental support. 2 - Financial support. 3 – Strategic location. 4 – Available workforce.

10. Investment Opportunities • Mechanical • Electrical • Chemical

11. Mechanical Opportunities • Mechanical opportunities represent the largest share of other opportunities because of the nature of the production equipment of water and electricity. • Mechanical opportunities include the following: • 1 - pumps and parts. • 2 - valves and parts.

12. Mechanical Opportunities

13. Investment Opportunities • Mechanical • Electrical • Chemical

14. Electrical Investment Opportunities • Electricalopportunities include the following: • 1- Oil and dry transformers. • 2- Electric motors. • 3- Switchgear.

15. Electrical Opportunities

16. Investment Opportunities • Mechanical • Electrical • Chemical

17. Chemical Investment Opportunities • Used for a number of chemical products in the various plants and numbering about 64 products and most of them are imported from outside the Kingdom. • The annual consumption of chemicals • SR 133, 646, 306

18. The annual consumption rate of the most consumed chemicals (tons / year) by SWCC only

19. The annual consumption rate of the most consumed chemicals (tons / year) by SWCC only

20. Cost of spare parts and chemicals for the year 2012 (in millions of SR) by SWCC only

21. Nationalization Initiative Partners • Saline water conversion corporation • Saudi Electricity company • Ministry of Water & Electricity • Power and water utility company for J&Y (MRAFIQ) • SABIC • Saudi Arabian Mining Company • Saudi Aramco • Industrial cluster • Ministry of petroleum & minerals • Royal commission for yanbu

22. Nationalization Initiative • The Initiative is based on: • Strategic procurement concept. • Actual Market data. • Actual growth data. • Nationalization Incentives.

23. Nationalization Initiative • The partners have prepared a program to collect and list economically viable for industrialization spare parts. • Identified five groups for common template : • Pumps • valves • Motors • Gauges • Bearing • An economic feasibility studies will select the top 100 industries as first phase to be nationalized in Yanbu Industrial City.

24. RC-Yanbu Desalination Park • RC-Yanbu has set aside a prime industrial area to • support “ the desalination Park”.

25. RC-YanbuDesalination Park • Several of Yanbu’s existing industries are positioned to contribute to the desalination industry.

26. Nationalization Incentives • RC-Yanbu Offers the option to provide ”Plug & Play” sites.

27. Royal Commission for Jubail and Yanbu Royal Commission At Yanbu Thank You WWW.rcjy.gov.sa