BMI's Executive Summary

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Saudi Arabia's state-controlled National Shipping Company (NSCSA) said in 2006 that it had secured SAR3.1bn (US$825.6mn) in loans to fund 60% of an expansion plan that would double its fleet of oil and chemical tankers. In recent years, Saudi Arabia, the world's biggest oil exporter, has increased production and sales of its crude to try to meet growing demand for oil and to check rising oil prices; more recently however it reduced output as part of OPEC production cuts agreed in late 2006. NSCSA registered a 15.8% year-on-year (y-o-y) decrease in net profit to SAR225.4mn (US$60.1mn) for the first six months of 2007. The company posted a net profit of SAR441.5mn (US$117.7mn) for 2006, up from SAR437.8mn (US$116.7mn) in 2005. Even though oil prices are set to ease over the next couple of years, BMI believes that Saudi Arabia's status as OPEC's swing producer, together with capacity increases, positions NSCSA for continued growth. In our latest Saudi Freight Transport Report, BMI concludes that the country's sea-freight tonnage is likely to grow by an annual average of 6.8% over the next five years.

Various factors underpin our prediction. We now think that Saudi GDP growth in 2007-2011 will reach an annual average of 3.7% (lower than the 4.7% achieved over the preceding five years). Oil and gas exports will be the drivers of foreign trade. Although the pace of trade growth will ease, tanker exports will remain dynamic. Big infrastructure projects will also help expand maritime transport capacity and boost demand for cargo.

By transport mode, we expect the fastest growing area to be sea cargo, followed by rail at an annual average of 4.8%, airfreight at 4.4%, road haulage at 3.9%, and pipeline throughput at 2.6%. The slower growth of oil and gas pipeline throughput will reflect the cooling of the current price boom towards the end of the forecast period. Saudi Arabia scores in a low range in terms of its growth forecast for freight transport across all modes through to 2011, with an annual average of 3.9%. However, with its petrodollar revenues, the country has shown recent commitment to reform and improve its transport sector and the current policy agenda (including greater private sector involvement) will bring results further forward. Saudi Arabia's overall business environment rating is a little below the average for the Middle East and Africa (MEA) region. It scores well in terms of its economic outlook because of its abundant natural resources, principally oil and gas. However, it does less well in terms of its freight-transport growth projections over the 2007-2011 period and its current regulatory environment.

For the 2007-2011 forecast period, we expect the transport and communications sector to continue outpacing the economy as a whole in GDP growth terms. It will achieve average annual growth of 4.6%, versus 3.7% for overall GDP. The total value of transport and communications GDP will rise to US$22.8bn in nominal terms by 2011, representing 5.6% of Saudi Arabia's GDP.

Contents

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Chapter 1 - Executive Summary

Chapter 2 - SWOT Analysis: The Landbridge Project

Saudi Arabia Transport Industry SWOT

Saudi Arabia Economic SWOT

Chapter 3 - Business Environment Overview

Regional Overview

Country Overview

Chapter 4 - Business Environment Ranking

Africa & Middle East (AME) Countries Freight Business Environment Ranking

Economics Long-Term Risk

Politics – Long-Term Risk

Freight Transport Growth

Transport Infrastructure Growth

Regulatory Environment

Competitive Environment

Transport Intensity

Political Risk Summary

Economic Risk Summary

Business Environment

Chapter 5 - Industry Trends And Developments

Road

Rail

Air

Sea

Chapter 6 - Macroeconomic Forecast Scenario

Table: Economic Activity

Industry Forecast

Table: Industry Forecast Scenario

Table: Main Industry/Macro Indicators

Trade Environment

Table: Total Value of Imports (US$mn)

Table: Total Value of Exports (US$mn)

Table: Top Export Destinations, US$mn

Table: Export Trade, % y-o-y

Table: Top Import Sources

Table: Import Trade, % y-o-y

Chapter 7 - Country Snapshot: Saudi Arabia Demographic Data

Section 1: Population

Table: Demographic Indicators (2005)

Table: Rural/Urban Breakdown

Section 2: Education & Healthcare

Table: Education As % Of Total Age Group

Table: Healthcare: Vital Statistics

Table: Healthcare: Expenditure

Section 3: Labour Market And Spending Power

Table: Employment Indicators

Table: Consumption and Stratification

Chapter 8 - Market Overview

Multimodal

Competitive Landscape: Multimodal

Company Profiles

Road

Infrastructure

Competitive Landscape: Road

Rail

Infrastructure

Competitive Landscape: Rail

Air

Infrastructure

Competitive Landscape: Aviation

Company Profiles

Water

Infrastructure

Competitive Landscape: Maritime

Company Profiles

Pipelines

Competitive Landscape: Pipelines

Chapter 9 - BMI Forecast Modelling

How We Generate Our Industry Forecasts

Transport Industry

Sources

Chapter 10 - Appendix: Regional Demographic Data

Table: The Long View: Data Over The Economic Cycle (2000-2007)

Table: Population

Table: Household Spending Per Capita, US$

Table: Private Consumption Per Capita, US$ PPP

Table: Market Size, GDP, US$bn

Competitive Landscape for Middle East & Africa Freight Transport Reports: Sample of Companies Ranked

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Analysis of latest projects across the freight transport sector – road, rail, air, sea, logistics – including market overview which provides an outline of the key elements driving development. SWOT analysis of the state’s business environment, transport sector, politics and economics, which carefully evaluates the short- and medium-term issues facing the industry.

Network of Middle Eastern & African Freight Transport Sources

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BMI's Middle Eastern & African Freight Transport Reports are based on an extensive network of multilateral organisations, government departments, freight transport industry associations, chambers of commerce and company reports. Information sources include: