(MENAFN - Arab News) With the setting up of a Saudi Arabia South Africa Holding (SASAH) in Riyadh yesterday, a strategic partnership between the two countries has taken shape.
The new venture was launched during the Fourth Saudi Arabian African Joint Committee held in Riyadh in the presence of Commerce and Industry Minister Tawfiq Al-Rabiah and South Africa's Trade and Industry Minister Rob Davies.
South African Deputy Minister of International Relations and Cooperation Ebrahim Ebrahim and South African Ambassador in Riyadh Sadick Jaafer were also present at the ceremony.
The launching ceremony was followed by the meeting of the Saudi-South African Business Council held at the headquarters of the Council of Saudi Chambers of Commerce and Industry.
Al-Rabiah said: "The meeting of the joint committee is part of the constructive dialogue that binds the Kingdom and South Africa to discuss ways to strengthen cooperation and push the level of current trade, which reached SR19.7 billion last year.
Saudi exports to South Africa have reached SR18.2 billion, while imports from South Africa to the Kingdom had reached SR1.5 billion.
Al-Rabiah stressed the need for activation of bilateral agreements signed between the two countries. Al-Rabiah added that the political relations between the two friendly countries would contribute to strengthening bilateral cooperation in economy, trade and investment.
Davies expressed confidence that the keenness of the two governments on the continuity of meetings of the joint committee is a sign of sincere desire to strengthen their current cooperation.
During the business council meeting, the Saudi team was led by Co-Chairman of the Saudi-South Africa Business Council Said Jubran Al-Qahtani, while the visiting team was headed by Iqbal Surve, the council's co-chairman.
Davies was also present at the council's meeting.
Secretary General of the Council of Saudi Chambers Fahad Al-Sultan made the opening remarks, while Abdullah Al-Hazani gave a presentation on National Industrial Clusters Development Program. Emad Sandawi from Maaden also told the visiting delegates of the investment opportunities available in his company.
Besides the key officials, representatives from 17 African companies formed the visiting delegation from South Africa.
Later in the evening, the two leaders signed the agreement at the headquarters of the Saudi Arabian General Investment Authority (SAGIA) here.
Announcing the launch of the new company, Al-Qahtani said SASAH was a special purpose vehicle to enhance business activities between the two consortiums from both Countries and to improve and enhance the business relationship between Saudi Arabia and South Africa.
"It will help the two countries to invest in profitable business ventures and facilitate joint ventures between two countries," he noted.
The company will be a legally registered entity in their respective countries and fulfill the legal requirements of investment authorities and tax regimes of both countries. It may become a major shareholder in some strategic joint ventures.
The new company is entitled for free 5 percent equity in any joint venture initiated by SASAH.
"Creating such a legal entity to create co-investment represents a historic opportunity for the business communities of the two countries to promote their business and diversify their investments," Al-Qahtani said.
Surve said the SASAH aims to create mutual business opportunities in mining, petrochemical and agriculture. "We are excited by the magnitude of the economic development plans of the Saudi government relating to the diversification of its economy which will embrace private sector partnership too," he added.
Describing the initial activities of the new company, Adnaan Grimsel consultant to the Saudi-South African Business Council said the initial capital of SR10 million would be utilized to conduct the bankable feasibility studies for the initially identified sectors such as agriculture, mining and petrochemical downstream industries.
"SASAH aims to be a leading blue chip profitable investment company in the region capitalizing on the strength of Saudi Arabian and South African economies," Grimsel said, adding that the two countries are keen on developing a strategic relationship to enhance the business opportunities between two countries, which has resulted in the formation of this new venture.
