Growth in the Saudi inspection and certification market

Saudi Arabia

Othman Al Zahrani, founder and CEO of Testing Equipment Specialist Team Company (TEST), talks to The Energy Year about the company’s planned inspection facility at NEOM, the investment opportunities in the inspection and certification value chain, and the high-quality inspection and certification services provided in Saudi Arabia.

What is the company’s inspection scope within the oil and gas value chain?
At TEST, our primary goal is to localise and develop inspection services in Saudi Arabia. We started working directly with Saudi Aramco by winning two contracts while competing with international and national companies, achieving the best position in the final performance evaluation report.
The business subsequently changed its emphasis, and we expanded our services to meet the needs of the whole oil and gas industry, including onshore and offshore drilling operations as well as water services. We collaborate with some of the most well-known drilling firms in Saudi Arabia, including SANAD [Saudi Aramco Nabors Drilling Company] and ARO Drilling.
Recently, SASO [Saudi Standards, Metrology and Quality Organization] has granted us accreditation to examine heavy machinery, oil and gas equipment, trailers and semi-trailers of all kinds. We are authorised to conduct audits of workshops for car dealerships, tanker inspections, petrochemicals, oil products and a variety of other things. Both SABIC and Saudi Aramco have approved us as service providers.

What are the main competitive advantages that set TEST apart from its competition?
The battle cry of our business is “Quality is us. Decision is yours. Future is ours.” In our industry, the client must receive the highest-quality service. Now that we have a proven track record, we can confidently state that TEST stands for ethics and dependability.
TEST is a 100% Saudi-owned company and one of the fastest-growing testing, inspection, verification, training, auditing, consulting and certification companies in the kingdom. Various sectors and industries throughout Saudi Arabia rely on our utmost attention and the precision of our efforts. For over 13 years, we have pursued a better way – inspiring ourselves to aim higher, transform and innovate.
The Saudi Vision 2030 inspires us to intensify our commitment to offering our clients excellent, dedicated and long-term services and to advancing the kingdom’s triumphant ambition.
Due to the fact that ownership and management are entrusted to the same person, our decision-making process is more agile.
At TEST, a decision that could take an international company months to approve can be made quickly in a matter of days.

What is TEST’s value proposition at NEOM, and what type of international co-operation are you seeking in this mega-project?
In 2021, we entered NEOM and carried out many inspections and verifications there. We already rent 13,000 square metres of land, where we will build our workshops and offer all of our services. We can assist global leaders in entering cutting-edge, world-class projects such as NEOM. We are willing to collaborate with foreign businesses that want to offer particular inspection and certification services in this country, such as setting up testing labs for goods.
We lack a qualified workforce despite having the facilities and certifications required to launch new testing labs for goods. Since we have already established the groundwork for business to begin, an international company that wants to partner with us only needs to send their employees over.
We are looking for trustworthy partners to join us and close the gaps along the inspection and certification value chain. The prospects in this market are limitless.

What is the opportunity for companies such as TEST to gain access to capital markets financing?
In general, business is increasing, and every industry needs inspections and certificates to function. We are in the very early stages of the inspection sector, and by 2030 I believe Saudi Arabian projects might have a market size of up to USD 100 billion. We want to have a 2% market share and be the top local inspection company.
These figures have greatly motivated us to consider an IPO. An inspection business or anything comparable has never before been listed on the Saudi stock exchange, Tadawul. We are quite delighted to have attracted significant interest from foreign service providers looking to collaborate with us or form a partnership with us.

What strategy did you use to diversify the company’s scope outside the energy sector?
We broadened our reach when Saudi Arabia’s industrial, civil, food, hotel and entertainment industries began to grow and, with the regulators’ inspiration, we became the first company to offer inspections and certificates to these industries.
In Saudi Arabia, there isn’t another inspection with the breadth of ours because we process our own accreditations eagerly and ahead of half of the competition, while the market is still developing. Using our strategy, we were able to become the first company to offer inspection services.
My successful career at Saudi Aramco, where I spent a significant amount of time, confirms my dedication to promoting nationalistic principles as a source of optimism. I was inspired to start TEST as a catalyst for kingdom-wide growth and development.
Our expertise allows us to quickly respond to Saudi Arabia’s requirements, which puts us ahead of the competition. The fact that former workers who served as inspector engineers for the most well-known multinational businesses make up the teams at our organisation is another benefit. From managers to inspectors and engineers, it’s crucial to choose the greatest experts to work in each specialised field.

What is your plan for managing the company’s international footprint?
Today, we have the international inspection accreditation 17020, which allows us to work globally and start operations in practically any country around the world. We are now planning to launch our operations in Bahrain.
Prior to Covid-19, we planned to set foot in multiple GCC countries. However, the pandemic brought a spike in demand for inspections in Saudi Arabia. Because we anticipated the situation and made preparations in advance, the year of the Covid-19 pandemic was our most financially successful year.

How would you describe the regulation of the inspection sector in Saudi Arabia?
The regulatory body known as SASO is responsible for creating and approving Saudi standards for commodities, services, products and measurement and calibration tools that govern inspection standards. The auditor who oversees the operations of inspection service providers is the Saudi Accreditation Center.
The government of Saudi Arabia is making the proper moves, from the regulators to the service providers. In the Saudi market, SASO is taking the initiative by establishing rigorous, high-quality standards for inspections in accordance with international standards and the kingdom’s rules and regulations in the Saudi market.
Although unique, these regulations meet the global standards set forth by the American Society of Mechanical Engineers. SABIC also has its own set of requirements. These focus on putting market requirements into action and monitoring their fulfilment while articulating the necessary laws and guidelines in line with Vision 2030.

What are the prospects for increasing the participation of Saudi inspectors in the market?
Saudi inspectors make up a relatively small portion of the market in our industry – likely less than 3-4%. A competent Saudi worker, however, can find thousands of positions in the inspection sector. Imagine how many careers you will be able to provide to Saudi citizens in just five years if you have special inspection institutions.
However, citizens will be unable to perform these services if they do not possess specific credentials or accreditations. We have engineers with Saudi educational backgrounds. It takes time to do this. Additionally, to support our business and provide more career chances for the citizens of Saudi Arabia, we have built a training facility.

What message would you send to international investors about Saudi Arabia’s attractiveness as an investment destination?
Investors must take immediate action to avoid losing the opportunity to invest in Saudi Arabia.
According to Saudi Minister of Finance Mohammed Al-Jaddan, as quoted in a statement to Reuters in 2021, “If a company refuses to move their headquarters to Saudi Arabia, it is absolutely their right, and they will continue to have the freedom to work with the private sector in Saudi Arabia.” Furthermore, he stated, “But for activities related to government contracts, they will have to have their regional headquarters here.”
The goal is to persuade international businesses that work with Saudi Arabia’s government to establish headquarters here. Generating jobs, improving expenditure efficiency and ensuring that the majority of the goods and services that the government agencies procured come from the kingdom were all priorities.
Instead of being influenced by what they read or hear about Saudi Arabia, I kindly ask investors to visit the country. The events taking place are unbelievable. Crown Prince Mohammed bin Salman is a distinctive leader who encourages commerce, industry and the youth. We are fortunate to have his leadership.
Finally, I recommend that Saudi Arabia’s local partners be properly vetted by foreign investors before entering into business.

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