SACE, the insurance and financial group, participates to the State mission in Saudi Arabia promoted by the Italian Minister of Economic Development, to accompany Italian businesses towards one of the most promising markets in the Persian Gulf area.
“SACE is looking into new transactions worth €120 million aimed at supporting Italian exports and investments: a figure which accurately expresses the potential offered by this strategic market for Italy,” states Giovanni Castellaneta, Chairman of SACE. “For this reason we have created an operations desk dedicated to MENA countries, with the aim of expanding the network of potential clients and developing new business and partnership opportunities, increasing missions to the region”.
The portfolio of transactions insured by SACE in Saudi Arabia currently stands at over €1 billion and is mainly concentrated in the oil & gas, power, metals and mechanical engineering sectors. In the country, SACE supported both large groups which are active in plant engineering for the steel and petrochemical industries, such as Danieli and Tecnimont, as well as smaller organisations such as Proger, the Abruzzo firm specialising in engineering services, and PR Industrial, the Siena-based SME which produces machinery for the building industry, electric generators and equipment for logistics and handling under the Pramac brand.
In order to increase business opportunities for Italian companies and to support them more effectively, SACE has concluded two important (reinsurance and cooperation) agreements with ICIEC, the Saudi Export Credit Agency, aimed at consolidating and expanding business opportunities between the two countries.
Focus on exports: what are the trends?
After the United Arab Emirates, Saudi Arabia is the second reference market for Italy in the Middle East, with exports worth more than €4.5 billion in 2013, an 11.4% increase compared with 2012.
With the exception of Germany, which in 2013 exported €9 billion worth of exports to the Saudi market, exports from the largest European economies are lower than those from Italy: €3.6 billion for France and the United Kingdom and less than €2.5 billion for Spain.
Italian exports to Saudi Arabia are already well positioned in key sectors for industrial development, such as mechanical engineering (which alone accounts for over 30% of Italian exports into the country) and rubber & plastics (with a market share of approximately 7%). In the medium-long-term, significant growth margins will be found in a range of increasingly broader and diversified sectors.
According to SACE forecasts, Italian exports to Saudi Arabia will see an average growth rate of 9.2% over the next four years. Over this period of time, higher than the average performances will be recorded in exports of mechanical engineering (+10.3%), textiles and clothing (+14%), furniture (+13.8%) and other consumer goods (+12.4%), driven by the performance of jewellery.
Furniture and jewellery still offer great opportunities for Italian exports in the near future: alone, they account for over €45 billion worth of Saudi imports (a total value of €145 billion), but Italian exports currently only meet this demand to a small extent (0.4%). The same also applies to electrical equipment and metals.