MARKAZ INFRASTRUCTURE RESEARCH Saudi Ports - September 2012

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3 Table of Contents MARKAZ INFRASTRUCTURE RESEARCH I. Executive Summary... 5 ECONOMIC BENEFITS OF SEAPORTS... 8 II. GCC Seaports... 9 OVERVIEW... 9 GCC PORT DEVELOPMENT PROJECTS III. Saudi Arabia Seaport Sector OVERVIEW UPCOMING AND ONGOING PROJECTS IV. Saudi Arabia Ports OVERVIEW PRIVATISATION OF PORTS JEDDAH ISLAMIC PORT KING ABDUL AZIZ PORT KING FAHAD INDUSTRIAL PORT, YANBU KING FAHAD INDUSTRIAL PORT, JUBAIL JUBAIL COMMERCIAL PORT YANBU COMMERCIAL PORT JIZAN PORT DHIBA PORT RAS AL-KHAIR PORT MILLENNIUM SEA PORT JAZAN ECONOMIC CITY SEA PORT DRIVERS FOR PORT DEVELOPMENT Appendix I: GCC World Trade Appendix II: Importance of Suez Canal Appendix III: Saudi Arabia Economy Appendix IV: Saudi Arabia World Trade SAUDI ARABIA- EU TRADE SAUDI ARABIA-US TRADE SAUDI ARABIA-CHINA TRADE SAUDI ARABIA-JAPAN TRADE SAUDI ARABIA-S.KOREA TRADE Kuwait Financial Centre S.A.K. Markaz 3

4 Tables Charts 1 Seaports in the GCC 1 Saudi Arabia Seaport Sector in a Snapshot 2 Container Ports world ranking 2011 (TEU 000s) 2 World Container traffic and GDP 3 Seaports projects in GCC 3 GCC Ports Market Share by Container Traffic Saudi Arabia Ports 4 Forecasted port capacity, throughput and utilization of GCC ports 5 Saudi Arabia ports volume trend 5 Saudi Arabian Ports Container Volume Trend (TEU 000s) 6 Major Saudi Arabia Seaport Projects 6 Forecasted Port Volume (TEU 000s) and Total Trade (USDbn) of KSA 7 Private Sector Operators for Jeddah port terminals 7 Saudi Arabian Ports Bulk Cargo volume trend (000 tonnes) 8 Jeddah Islamic port volume trend 8 Saudi Arabian Ports General Cargo volume trend (000 tonnes) 9 Operators for Dammam port terminals 9 Saudi Arabian Ports Ro-Ro & vehicles volume trend (000 tonnes) 10 King Abdul Aziz port volume trend 10 Saudi Arabian Ports Passenger traffic ( ) 11 Timeline for Dammam New Container Terminal 11 Saudi Ports Location 12 Private Sector Operators for Yanbu port terminals 12 Jeddah Port Container Volume trend Yanbu Industrial Port volume trend 13 Jeddah Port Cargo Volume trend (Tonnes millions) 14 Private Sector Operators for Jubail port terminals 14 Dammam port container volume trend (TEU 000s) 15 Private Sector Operators for Jubail port terminals 15 Dammam port bulk and general cargo volume trend (Tonnes millions) 16 Jubail Commercial Port volume trend 16 Yanbu Industrial Port container volume trend (TEU 000s) 17 Private Sector Operators for Yanbu port terminals Yanbu Commercial Port volume trend 18 Jubail Industrial Port volume trend Yanbu Industrial Port Bulk cargo (Tonnes Millions) and General cargo volume (Tonnes 000s) 19 Private Sector Operators for Jizan port terminals 19 Jubail Industrial Port Bulk Cargo volume trend (Tonnes millions) 20 Jizan Port volume trend 20 Jubail Industrial Port General Cargo volume trend (Tonnes 000s) 21 Dhiba Port Volume Trend 21 Jubail Commercial Port bulk and general cargo volume trend (Tonnes 000s) 22 GCC as percentage of World trade 22 Yanbu Commercial Port Volume trend (TEUs) 23 Suez Canal performance ( ) 23 Yanbu Commercial Port Bulk cargo volume trend (Tonnes 000s) 24 Saudi Economy Statistics 24 Yanbu Commercial Port General cargo volume trend (Tonnes 000s) 25 Saudi Arabia Credit Ratings 25 Yanbu Commercial Port Ro-Ro & Vehicles volume trend (Tonnes) 26 Hydrocarbon exports as a percentage of KSA s total exports 26 Yanbu Commercial Port Passenger traffic (000s) 27 Saudi Arabia merchandise trade trend (USDbn) 27 Jizan Port bulk cargo volume trend (Tonnes Thousands) 28 Jizan Port general cargo volume trend (Tonnes Thousands) 29 Dhiba Port general cargo volume trend (Tonnes 000s) 30 Dhiba Port Bulk Cargo Volume trend (Tonnes 000s) 31 Dhiba Port passenger traffic (000s) 32 Dhiba Port Ro-Ro & vehicles volume trend (Tonnes 000s) 33 World Trade Trend: Imports and Exports(USDbn) 34 GCC Trade Trend : Imports and Exports with the world(usdbn) 35 GCC Forecasted growth in Imports and Exports (%) 36 GCC trade balance (USDbn) 37 Major GCC trade partners (% of trade volume, % contribution to trade surplus in brackets) 38 Suez Canal map 39 Saudi Arabia-EU trade trend: Exports,Imports and trade balance(usdbn) 40 Saudi Arabia-US trade trend: Imports, Exports and trade balance (USDbn) 41 Saudi Arabia-China trade trend: Imports, Exports and trade balance (USDbn) 42 Saudi Arabia-Japan trade trend: Imports, Exports and trade balance (USDbn) 43 Saudi Arabia-South Korea trade trend: Imports, Exports and trade balance (USDbn) Kuwait Financial Centre S.A.K. Markaz 4

5 I. Executive Summary Kingdom of Saudi Arabia is bordered by two major shipping lines: the Gulf, and the Red Sea The Kingdom of Saudi Arabia (KSA) is bordered by two major shipping lines: the Gulf, which is an extension of the Indian Ocean, is used mainly for exporting oil and gas; and the Red Sea, which links the Mediterranean Sea with the Indian Ocean through the Suez Canal. Saudi Arabia has 9 ports and the ports of Saudi had a Compounded Annual Growth Rate (CAGR) of 9% in container traffic from 3 million Twenty Foot Equivalent Units 1 (TEUs) in 2004 to 6 million TEUs in The Jeddah port alone accounted for 4 million TEUs of container traffic in 2011 and is one of the top 50 container ports in the world with a ranking of 27. According to foreign trade and container traffic data of , the container traffic of Saudi Arabia is dependent on the value of trade that happens in the Kingdom. Saudi s trade is forecasted to increase from USD 472bn in 2011 to USD 579bn by 2015 and hence there will also be an increase in container traffic during that period. Apart from the Millennium Seaport mega project in King Abdullah Economic City (KAEC) near Jeddah, other projects in Saudi Arabia are the Jizan Economic City Seaport in Jizan and Dammam port expansion. Saudi Arabia has 9 ports There are no major free trade zones in Saudi Arabia except the Tusdeer Bonded and Re-export Zone. The development of the 4 Economic Cities is Saudi s attempt to attract Foreign Direct Investment (FDI) to diversify the economy. Hydrocarbon exports that accounted for 90% of the total exports of Saudi in 2005 accounted for 87% of the total exports in Thus, it is important for Saudi to invest in port developments, to handle the increase in non-oil exports and to attract more FDI through the Economic Cities, Free Trade Zones and Industrial Cities located adjacent to the ports. Saudi Arabia s Container volume decreased in 2009 by 5%, but increased by 20% in 2010 and 7% in The bulk cargo volume too decreased during 2009 by 5%. The bulk cargo volume could not recover in 2010 and further decreased by 0.5% but increased by 4.5% in The general cargo 1 The Twenty-foot Equivalent Unit (TEU) is a unit of cargo capacity used to describe the capacity of container ships and container terminals. It is based on the volume of a 20-foot-long (6.1 m) container. Kuwait Financial Centre S.A.K. Markaz 5

6 Developing of 4 economic Cities is Saudi s attempt to attract FDI volume was the most affected because of the global crisis as it decreased by 42% in 2009 but volumes witnessed an increase of 60% from 2009 to The ports of Jeddah, Jizan and Yanbu have passenger terminals for hajj pilgrims. The overall cargo and container volume was affected by the global crisis, but the volumes have not only recovered to the previous figures but have increased considerably and are forecasted to increase further. Hence port developments are imminent for Saudi Arabia, but the port developments are concentrated only in a few major ports and not in the smaller ports. The investment opportunities available in the Saudi seaport infrastructure comprise bidding for operator contracts and investing in the Economic Cities and Industrial Cities located around the ports. To obtain full report, please contact: info@e-marmore.com Kuwait Financial Centre S.A.K. Markaz 6

7 Economic Research Infrastructure Research* Sector Research Capital Markets Research GCC Demographics (July 12) Power Banking & Financial Services GCC Defensive Bellwether Stocks (Jan- 12) Got a CMA: What Next? (Feb- 12) KSA(2012) Kuwait(2012) GCC Banking Sector (2012)* KSE 15 Index (Sept- 11) How is the GCC preparing for a AA+ World? (Sept- 11) MARKAZ RESEARCH OFFERINGS UAE(2012) Qatar(2012), Kuwait Investment Sector (Mar- 12) The Golden Portfolio (Sept- 10) MENA Unrest (Apr- 11) GCC(2012) Stress Testing Kuwait Banks (May- 11) Persistence in Performance (Jun- 10) Markaz Daily Morning Brief Markaz Kuwait Watch Periodic Research Daily Weekly Daily Fixed Income Update Oil & Gas Bulletin Kuwait Development Plan (Mar- 11) Kuwait Capital Market Law (Mar- 10) The Vicious Square Monetary Policy options for Kuwait (Feb- 08) To Leap or To Lag: Choices before GCC Regulators (Apr- 07) GCC for Fundamentalists (Dec- 06) KSA(2012) Qatar(2012) Ports Kuwait Investment Sector (Sept- 10) Missing the Rally (Jun- 09) UAE(2012) Oman(2012) The New Regulations on Kuwait Investment Sector (Jun- 10) GCC Banks - Done with Provisions? (Jan- 10) This Too Shall Pass (Jan- 09) Fishing in Troubled Waters (Dec- 08) MENA Market Intelligence KSE Market Review GCC(2012) Shelter in a Storm (Mar- 09) Down and Out: Saudi Stock Outlook (Oct- 08) Market Review Aviation Banking Sweet spots (Apr- 08) Mr. GCC Market- Manic Depressive (Sept- 08) Monthly International Market Update Real Estate Market Commentary Regional Petroleum Projects Commentary Quarterly GCC Leverage Risk (Nov- 06) UAE(2012) GCC(2012) GCC Petrochemicals * To Yield or Not To Yield (May- 08) GCC Corporate Earnings Diworsification: The GCC Oil Stranglehold (Jan- 09) Water China and India: Too Much Too Fast (Oct- 07) Semi-Annual GCC(2012) GCC Healthcare * ICT GCC(2012) GCC Asset Management & Investment Banking Report 2012* A Potential USD 140b Industry: Review of Asset Management Industry in Kuwait (Sep- 07) A Gulf Emerging Portfolio: And Why Not? (Jun- 07) Derivatives Market in GCC (Mar- 07) GCC Market Outlook GCC Equity Research Statistics Roads and Railways Managing GCC Volatility (Feb- 07) * Paid Ca te gory: Exe c utive S umma ry a nd Ta ble of Conte nts a va ila ble for fre e downloa d GCC(2012) Real Estate - Country Analysis Kuwait,, KSA, Abu Dhabi, Egypt, Lebanon, Jordan, Qatar, Syria, Algeria, Dubai, USA Website Channel Partners How to access our reports? research@markaz.com Bloomberg - Type MRKZ Nooz Capital IQ Thomson Research Reuters Knowledge Zawya Investor ISI Emerging markets FactSet Research Connect TheMarkets.com