Plenty of Investment Opportunities with Saudi Arabia’s Vision 2030

Saudi Arabia is synonymous with oil, holding 16% of the world’s oil reserves which contribute 70% to the value of the country’s exports and 46% to its GDP.

Saudi Arabia is synonymous with oil, holding 16% of the world’s oil reserves which contribute 70% to the value of the country’s exports and 46% to its GDP.

While the oil crisis of 1973 helped accelerate Saudi Arabia’s economy, growing from USD $15 Billion in 1973 to a whopping USD $184 Billion in 1981, it also created a dependence on oil

Due to the country’s need to diversify beyond oil for a more robust economy, this led to Vision 2030, a Saudi Arabian investment initiative announced by Crown Prince Mohammed bin Salman in 2016.

The strategy was laid out with three main pillars: a vibrant society, a thriving economy and an ambitious nation, the development of which is funded by the Saudi Public Investment Fund (PIF)  with an estimated USD $620 Billion in assets.

Investing in sport has been a key part of the plan, with the widely publicised takeover of Newcastle United for USD $409 Million in 2021, the transfer of soccer superstar Cristiano Ronaldo and the financial backing of the LIV Golf League for USD $2 Billion last year making all the headlines. Additional sporting investments include 10-year deals with the WWE (US $1 Billion) in 2018 and the Grand Prix (US $650 Million) in 2021 with various events hosted in Saudi Arabia.

The buck doesn’t stop with sports, however. Another key aspect of Saudi Arabia’s Vision 2030 is entrepreneurship. Focussing on the technology sector which has given rise to the emergence of multiple innovative startups, the country has been investing heavily in building an entrepreneurial infrastructure.

A surge in venture capital investments in recent years has seen nine funds totalling $2.4B, at a recent LEAP 2023 in Riyad, to drive startup growth. Additionally, in 2021 and 2022, venture capital funding in Saudi startups increased 72% to $987 million across 144 deals.

The industrial sector has also been given a boost, with 212 industrial investment opportunities through the Invest in Saudi platform by the end of 2023, as confirmed by Saudi Arabia’s Minister of Industry and Mineral Resources, Bandar Al-Khorayef.

One Australian company that has greatly benefited from these Saudi Arabian investment opportunities are education and training specialists, Site Group International (ASX: SIT). 

Following three tough years during the Kingdom’s harsh lockdown measures, Site is now expecting activity to return to pre-pandemic levels and, from there, offering further upside based on Vision 2030. In December 2022, intake numbers rose by 62% at the Maharat Training and Construction Centre (MCTC), one of Site’s key local training centres. The company expects a further 40% increase in March 2023 and has presented several tangible growth opportunities for the next few years, forecasting revenues multiple times those pre-Covid by 2025.

Site CEO, Vern Wills was upbeat about the company’s direction in 2023.

“After  three difficult years due to Covid, Site is finally heading back in the right direction, with plenty of exciting business opportunities. There is a strong drive in the country to build a well-trained blue collar workforce and we are well placed to serve that need with our local experience exceeding ten years.”

Once just a leading producer of oil, Saudi Arabia is fast becoming a country that is leading the way for more diversified investment opportunities, so investors may want to keep an eye out for Australian businesses who stand to benefit from this dynamic.

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Reach Markets have been engaged by Site Group International Limited and may receive fees for its services.

Past performance is not a reliable indicator of future performance.

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