March 1, 2024

On International Arabian Leopard Day, together we can make a difference

SÃO PAULO: Saudi Arabia is committed to diversifying its economy, moving it away from oil, exploring all opportunities available in the domestic and foreign markets.

This same search took the Saudi Minister of Investment, Khalid Al-Falih, to several countries in Latin America between July and August 2023. The objective of the trip was to explore paths for economic cooperation.

The Kingdom does not seem to be focused solely on strengthening ties with large companies, as is evident by the creation of a 5 million dollar fund to support small and medium-sized companies in Paraguay.

According to the Paraguayan authorities, the resources will be used to form a guarantee fund with up to 10 times the initial investment. Money can be important to boost many businesses in the country, said Guillermina Imlach, who heads an association of industrial SMEs in Paraguay.

“In the country, around 98 percent of all companies are small or medium-sized. Most of them do not have access to credit, so they cannot make the necessary investments,” she told Arab News.

To be able to reach Middle Eastern markets, Paraguayan SMEs first need to improve their productivity, said Imlach.

“This would be possible with the association of several companies that operate in the same segment”, he stated. The Saudi fund will be able to help them in this regard.

Colombia, a South American country where Saudi Arabia does not have an embassy, ​​exported goods worth around US$80 million to the Kingdom between October 2022 and October 2023. Most of the items were produced by SMEs, such as costume jewelry and jewelry, headgear and perfumes.

“There is a lot of room for smaller companies to grow and enter the Saudi market,” Cecilia Porras Eraso, president of the Arab Colombian Chamber of Commerce, told Arab News.

These companies are very diversified in their areas of activity and certainly investments such as those sponsored by Saudi funds could have a special impact on the commercial relationship between Brazil and Saudi Arabia.

Osmar Chohfi, president of the Arab Brazilian Chamber of Commerce

The chamber recently joined forces with a company that helps companies from the Arab world that wish to establish a branch in Colombia.

“This can be done through partnerships with Colombian companies, including SMEs,” said Porras Eraso.

In Argentina and Brazil — two major exporters of animal proteins to the Middle East — most trade with Saudi Arabia is conducted by large companies, but SMEs are gradually increasing their participation in this exchange.

In 2021, the number of Argentine SMEs exporting to the Middle East grew by 5 percent and reached a total volume of 247 million dollars, with around 30 percent of this value going to Saudi Arabia. Most of these exports involved agribusiness products, but industrial items were also part of this list.

During an event for SMEs in Brazil in August 2023, Tamer Mansour, CEO of the Arab Brazilian Chamber of Commerce, stated that a new cycle is beginning in the relationship between the two nations in terms of investments and partnerships.

“I see (Al-Falih’s) visit as a great sign that Saudi public funds want to come and invest here. Therefore, medium and small companies, cooperatives and industries outside hubs such as Rio Grande do Sul, Santa Catarina and São Paulo should be on the radar,” he stated.

According to Osmar Chohfi, president of the chamber, the great potential of Saudi investments in Brazilian SMEs is “evident”.

“These companies are very diversified in their fields of activity and certainly investments such as those sponsored by Saudi funds could have a special impact on the commercial relationship between Brazil and Saudi Arabia,” he told Arab News.

In Chohfi’s opinion, Brazilian SMEs operating in segments such as clothing, footwear, construction materials and food and beverages are among the most promising to receive Saudi investments.

In Argentina, several small companies have participated in international events and gained access to the Arab market, mainly those in the food and beverage sector, Walid Al-Kaddour, secretary general of the Arab-Argentine Chamber of Commerce, told Arab. News.

“There is great potential not only for small and medium-sized agribusiness companies, but also for companies in the pharmaceutical and medical products segments, the wood industry, metal pipes and materials for the oil industry,” he said.

Al-Kaddour argues that Saudi investors should favor private partners and seek to establish joint ventures with local partners.

“This should not only involve big companies, but also small companies,” he said.

EMPHASIS

Colombia, a South American country where Saudi Arabia does not have an embassy, ​​exported goods worth around US$80 million to the Kingdom between October 2022 and October 2023. Most of the items were produced by SMEs, such as costume jewelry and jewelry, headgear and perfumes.

Alfredo Abboud, secretary general of the Argentine Chamber of Commerce and Services for the United Arab Emirates, argues that SMEs must come together to be able to gain scale and partner with Saudi investors or enter the Kingdom’s market.

This is something he accomplished himself. Abboud, owner of the alfalfa company Cadaf, and his partner Gabriel Osatinsky, owner of another company, California, which also produces the crop, came together on a project to promote a long-term partnership between a group of Argentine alfalfa companies and Saudi irrigation companies. .

“Our idea is to bring irrigation equipment from Saudi Arabia to Argentina and exchange it for human or animal nutrition products,” he told Arab News.

In the last three years, Argentina has faced long periods of drought, which have affected its rural production, including alfalfa.

“We were unable to meet all the export demand and needed irrigation equipment. That’s when Osatinsky got the idea to work on this partnership,” he said.

The duo has been bringing together other alfalfa producers with the aim of reaching 100 thousand hectares of irrigated areas. A Saudi irrigation company will establish a branch in Argentina to supply equipment and monitor production.

“Paying for the Saudi investment with a commodity it needs creates a virtuous cycle. It’s more than just selling and buying,” Abboud added.

He said it would be difficult for a small alfalfa producer to serve the Saudi market alone. But, by associating with other producers, it is possible.

“SMEs from other areas of activity can certainly do the same”, he concluded.

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