Saudi Aramco, the world's largest oil-producing company, the Public Investment Fund and China's Baoshan Iron and Steel (Baosteel) have signed an agreement to build the kingdom's first steel plate manufacturing complex.
The complex is projected to have an annual production capacity of up to 1.5 million tonnes annually and will be built in Ras Al Khair Industrial City, one of the four new special economic zones recently announced by Saudi Crown Prince Mohammed bin Salman, the three companies said on Monday.
The complex will feature equipment mindful of the environment, including an iron furnace that runs on natural gas and emits 60 per cent less carbon emissions than traditional furnaces. Its compatibility with hydrogen could increase this to 90 per cent.
The companies did not disclose the value of the project, which would be the first of its kind in the GCC.
The project — which is under Aramco's flagship industrial investment programme Namaat and supported by the government’s Shareek initiative — is “expected to create jobs and contribute to economic growth and diversification”, Amin Nasser, president and chief executive of Saudi Aramco, said.
“This joint venture is also an example of bringing together expertise from other sectors. With Baosteel and the PIF supporting in capacity building in the kingdom’s industrial sector, Aramco aims to create additional value for our company and our partners,” Mr Nasser said.
Shareek was launched in 2021 by Prince Mohammed to boost the contribution of local companies towards the country’s economic growth, and is part of an investment programme worth 27 trillion Saudi riyals ($7.2 trillion) through the decade.
Namaat, launched in 2020 and expanded in 2022, is Aramco's programme that aims to tap into the vast opportunities available in Saudi Arabia to create value and drive economic expansion and diversification, while also supporting industrial investment partnerships and creating jobs for citizens.
Saudi Arabia, the Arab world's largest economy, is expanding its industrial, manufacturing and mining sectors as part of its Vision 2030 strategy that aims to reduce its reliance on oil revenue and diversify its economy.
In September, the kingdom set out plans to build three iron and steel projects worth 35 billion riyals, with a combined production capacity of 6.2 million tonnes, as part of the strategy.
Business activity in the kingdom's non-oil private sector economy remained robust in March as output and new business continued to expand, further supporting employment growth in the kingdom at the end of the first quarter, the Riyad Bank purchasing managers' index showed last month.
This partnership ... will strengthen Saudi Arabia’s industrial development and enable its role as a supplier within the metal industry
Yazeed Al Humied,
deputy governor and head of Mena investments at the PIF
Business confidence in the country hit a two-year high in January as output growth strengthened, the Riyadh-based lender said in February.
The joint venture will allow the PIF, Saudi Arabia's sovereign wealth fund, to boost its contribution to the economy, as well as expand its growing portfolio. The fund has invested in 13 sectors and established 77 new companies locally, said Yazeed Al Humied, deputy governor and head of Middle East and North Africa investments at the PIF.
“The PIF is diversifying the Saudi economy by unlocking opportunities and enabling key strategic sectors in the local market. This partnership … will strengthen Saudi Arabia’s industrial development and enable its role as a supplier within the metal industry,” he said.
The steel plate factory is expected to boost the domestic manufacturing sector through the localisation of the production of heavy steel plates, the transfer of expertise between the three companies and creating export opportunities, the companies said.
“The project aims to contribute positively to the localisation of the steel industry chain, job creation and local economic prosperity in Saudi Arabia,” said Zou Jixin, chairman of Baosteel.
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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.”
Key recommendations
- Fewer criminals put behind bars and more to serve sentences in the community, with short sentences scrapped and many inmates released earlier.
- Greater use of curfews and exclusion zones to deliver tougher supervision than ever on criminals.
- Explore wider powers for judges to punish offenders by blocking them from attending football matches, banning them from driving or travelling abroad through an expansion of ‘ancillary orders’.
- More Intensive Supervision Courts to tackle the root causes of crime such as alcohol and drug abuse – forcing repeat offenders to take part in tough treatment programmes or face prison.
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Real estate tokenisation project
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
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