Towards a bright future in the Saudi downstream

Saudi Arabia

Yahya AlYami, group CEO of Khalifa Abdulrahman Algosaibi Investment Company (KAI), talks to The Energy Year about Saudi Arabia’s unprecedented growth and the group’s potential IPO. KAI is an industrial conglomerate with businesses in catering and hospitality, construction materials and chemicals, real estate, logistics and professional training, among others.

Can you provide an overview of KAI’s portfolio of companies?
We pursue synergies and specific service sectors. Our catering and operational maintenance business has been around since 1976 and is our flagship company. It is 100% Saudi-owned and has more than 3,000 employees providing catering services to the oil and gas sector and others. We also manufacture high-end steel and alloy castings and produce a range of construction chemicals.
Along with this, we offer training to bridge the skills gap in Saudi Arabia. Our ASAS Training Institute has grown more than 300% in just two and a half years. The demand for training, particularly from the government and in government-participated sectors, is massive. We work with top universities to design tailored training programmes for workers in several fields.

What are some joint ventures or collaborations you are currently developing?
Right now, we have several JVs in the making with companies from Europe, Asia and the US. We can’t disclose details at this stage, but one will be in Azerbaijan’s manufacturing space for offshore oil and gas, and we are exploring another opportunity in sustainable building materials in Saudi Arabia.
Saudi Arabia is growing at an incredibly fast pace, but international companies can take years to set up a business here on their own. Once they have established themselves, adapting to the local culture and market takes time. By partnering with us, international companies can speed up the process significantly. Another advantage we can offer is access, as we are present in Kuwait, Qatar, Bahrain and the UAE

Given the growing number of international companies entering Saudi Arabia, how do you see the future of domestic players?
The future is bright for Saudi Arabia. The arrival of international companies creates a more competitive environment, which will push domestic companies to innovate and improve. At the same time, Saudisation and talent development initiatives will help Saudi businesses acquire capabilities to compete globally.
As long as the government maintains its support for domestic industries and fosters an environment of growth and stability, Saudi Arabia will continue to attract international players and the country will be a key participant in global markets.

How do you compare the quality of products made in Saudi Arabia with those manufactured in India or China?
I have done extensive analysis comparing Saudi products with those from India and China, and Saudi manufacturing is increasingly competitive, especially when it comes to high-end products. The challenge is the low-quality products from China and India that flood the market. We are not trying to block these products outright, but we want to protect Saudi-made high-end products that can compete globally. If a high-quality product from India or China outperforms ours, it is our responsibility to improve.

Many companies in Saudi Arabia are gearing up for IPOs. Does KAI also have plans to go public?
There are a few companies within our group that could potentially go for an IPO, but we are being careful so that when we do take them public, we do it the right way. The holding company itself will not be taken public; it will remain as is and continue to carry out centralised functions. The goal is to ensure that the companies that we take public are structured to meet international standards.
There are also other avenues for growth, such as acquisitions in Saudi Arabia and internationally. We want to develop a comprehensive strategy, and we want to ensure everything is aligned properly before taking any steps.

KAI is looking to expand in the oil and gas downstream and in the chemicals sector. Can you share any updates on your progress?
We have already made strides in the downstream segment. In chemicals, we have a manufacturing arm and we see much potential in downstream markets, which are growing thanks to giants such as SABIC. Saudi Arabia’s downstream is very attractive because the country’s industrial expansion is generating much demand for chemicals.
We plan to capture this growth with partnerships and joint ventures, and by continuing to expand our manufacturing capabilities. Government support for emerging industries under Vision 2030 should keep demand growing strong, so it is a great time to be involved in construction chemicals.

How do you see KAI’s business evolving after 2030?
I believe that growth in Saudi Arabia will continue after 2030; the country won’t slow down. The number of mega-projects here is unprecedented. The economy is diversifying and it is not just oil and gas or petrochemicals that are driving development.
We are positioned well to benefit from Saudi Arabia’s economic transformation. The family behind our group has a rich history, is globally minded and is open to opportunities. After Vision 2030 is complete, we will continue to grow in our existing businesses and we will have started new ones. Our adaptability and our focus on efficiency and prudent risk management will be the keys to our success.

Read our latest insights on:

• Azerbaijan
• Bahrain
• India
• Kuwait
• Qatar
• Saudi Arabia
• UAE