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Creation of LCCC to maximize use of local contents in Saudi Arabia

Saudi Arabia, October 20, 2019

RIYADH — The Local Content & Government Procurement Authority (LCGPA) launched the Local Content Partnerships initiative during a ceremony in Riyadh attended by several VIPs including ministers and representatives from government entities and major national companies. This initiative forms LCGPA’s first strategic plan that aims to establish lasting and sustainable partnerships with public and private sector companies in order to effectively contribute towards developing local content throughout various sectors in Saudi Arabia.

The ceremony also witnessed the announcement of the Local Content Coordination Council (LCCC) as LCGPA’s arm for coordinating efforts between public and private sector entities in order to develop the elements of local content and raise their potential within the Kingdom. LCGPA signed several MoUs in this regard with LCCC members which comprise a number of major Saudi companies including: Saudi Aramco, Sabic, Saudi Arabian Mining Company (Maa’aden), Saudi Telecom Company (STC), Saudia Airlines, Saudi Electricity Company (SEC), and Saudi Commerce Chambers.

Moreover, the event included signing several MoUs between LCGPA and the Saudi General Authority for Military Industries (GAMI) to ensure an integrated development of local content at the local economy level.

Dr. Ghassan bin Abdulrahman Al Shibel, LCGPA Chairman, said the Local Content Partnerships initiative comes at the right time, only one year following the establishment of LCGPA. He said the initiative enables members from major public and private sector entities to work together towards a clear mission to develop and activate a strategy to boost local content, incorporate increased national elements on various fronts, including the workforce, commodities, services, assets, and technologies, and promote non-oil sectors’ capabilities based on Saudi Vision 2030. Al Shibel added that this strategy seeks to attract national purchasing power to develop local content and ensure a sustainable economy, and also enhance government procurement procedures to become more transparent and aligned with established guidelines and policies.

Furthermore, Al Shibel described LCCC as LCGPA’s primary division responsible for coordinating companies’ joint efforts to raise awareness on the significance of content on a wide scope. He also announced the first LCCC conference, set to be conducted during the first quarter of 2020, and expected to serve as a platform gathering partners from the public and private sectors alongside international experts, in aims to shape future cooperation strategies for developing and fostering national content.

Additionally, entities signing the MoUs reiterated their commitment towards activating their efforts and developing policies that augment the presence of local content throughout all the Kingdoms’s sectors.

Speaking at a panel discussion held during the ceremony, Chairman of SABIC, Dr. Abdul Aziz bin Saleh Al Jarbou said SABIC is proud to be a member of LCCC and committed to playing a leading role in enabling Saudi Vision 2030 and the National Industrial Development and Logistics Plan (NIDLP) to increase the local content and enable it as an economic source to increase the GDP and increase employment opportunities for citizens. He added that “Nusaned” initiative is one of the company's output for effective internal and external integration, especially since the company's strong position enables it to leverage its global reach to enhance local content.

In this respect, STC’s Chairman Eng. Nasser bin Sulaiman Al Nasser expressed the telecom giant’s pride in being part of the Local Content Partnerships initiative seeking to promote local content as outlined in Saudi Vision 2030. He highlighted several programs launched by STC including the ‘Rawafed’ program which supports the nationalization of jobs, industries, and innovation, in addition to supporting SMEs. Rawafed has resulted in raising the Saudization rate at STC’s key partners up to 40%, with plans to increase it further to 60% by end of 2020. Additionally, Al Nasser underlined STC’s leading role in hiring national talents within leadership positions, over 90%, and supporting SMEs via direct and indirect procurements valued at SR4 billion, or through innovation centers. Al Nasser also expressed STC’s keenness to pursue nationalization of the technology sector by creating opportunities for national talents in related industries in cooperation with local and global partners.

Chief Executive Officer of the Saudi Electricity Company Fahad bin Hussein Al-Sudairy said over the past five years, the company has given a competitive advantage of 10% to the prices of local factories, compared to foreign products, to stimulate them and increase their market share in the field of electrical industries. The number of local factories registered with the company’s systems surged by 840% to 575 factories. He added that the company's Board of Directors has adopted a strategy of localization and maximizing local content, titled “Benaa program”, which contains three initiatives to localize industries and services, including the development of policies and mechanisms to support and motivate local manufacturers and contractors, and others to support and stimulate SMEs, in addition to identifying investment opportunities for industry and services. He also stated that the company has succeeded in increasing the localization rate, where the number of Saudis exceeded 92% of the total company’s staff of engineers, technicians and administrators.

On this occasion, Mr. Abdul Aziz Askar Al Harbi, Vice President of Ma'aden for Consolidated Support Services, Safety and Security, stated that the local content is a critical priority for Ma'aden, . He said the company is working hard to contribute to the diversification of the national economy by providing more opportunities for SMEs and local companies at Ma'aden and across its supply chain, especially in remote areas. He added that the cooperation agreement with LCGPA will support the further development of Ma’aden’s local content program by helping it adopt best practices and coordinate activities across the value chain to increase the effectiveness and efficiency of local content initiatives.

Chairman of the Council of Saudi Chambers (CSC) Dr. Sami bin Abdullah Al Obaidi said launching LCCC as an LCGPA-led body that ensures liaison among major national entities, including the Saudi Chambers, is a remarkable step towards coordinating efforts between the public and private sectors and increasing local content throughout various economic arenas in aims to accomplish Saudi Vision 2030’s goal of raising the private sector’s economic contribution to 65% of GDP. He also shed light on the major role that CSC contributes within LCCC stemming from its role as the private sector’s institutional body and its experience in the challenges faced by national enterprises which hinder their contributions to local content. Moreover, he reiterated the importance of the ‘Local Content Increase Program’ and the supporting services which involved signing MoUs with 10 government and semi-government entities in aims to promote joint efforts aspiring to develop local content.

The Director General of Saudia Airlines Eng. Saleh bin Nasser Al Jasser praised LCGPA’s Local Content Partnerships initiative and its strategic targets supporting Saudi Vision 2030’s goal to achieve comprehensive and sustainable development for the Kingdom. He also reiterated Saudia Airlines’ dedication to be an active supporter of local content partnerships and initiatives through sharing experiences and practices with all partners and offering an array of products and support to other projects launched by national companies.

The MoUs signed between LCGPA and its partners seek to develop local content through sharing best practices and experiences and enhancing cooperation with the private sector to promote local content initiatives via LCCC, in addition to capitalizing upon the visions of both the public and private sectors to establish unified policies that support local elements and enable the nationalization of industries and technologies. Moreover, LCGPA will work alongside its partners to unify the local content methodology and calculation mechanism, in addition to developing programs dedicated for each partner in what will result in comprehensive strategies that fully encompass this significant national aspect.

saudigazette