Driving commercial and political engagement between Asia, the Middle East and Europe
Driving commercial and political engagement between Asia, the Middle East and Europe
Driving commercial and political engagement between Asia, the Middle East and Europe
Key trends in Gulf infrastructure
From housing to giga projects, the Gulf is increasingly looking to Asia to meet its construction demand. But what’s driving this demand, and what are the key contracts awarded so far in 2022?
Asia House’s new research report, The Middle East Pivot to Asia 2022, explores these questions in detail, highlighting the role of infrastructure and construction in the rapidly evolving relationship between Asia and the Gulf.
The GCC construction sector is expected to keep growing,
with the total value of planned and unawarded projects
in the GCC expected to reach US$2trn in the next few years
A plethora of large-scale construction and infrastructure enterprises have been awarded to Asian companies in the last few years. These projects have expanded the Gulf’s construction sector, and are principally driven by the region’s efforts to diversify their economies.
Projects include a US$2.3bn contract to South Korea’s HanmiGlobal to create project management systems for Saudi Arabia’s ‘The Line’ development; a US$218mn contract for China Railway No.5 Engineering Group to build 597 houses and public buildings in Kuwait; and a US$270mn contract to build the UAE’s four-tower Aykon City.
Chinese investment into the Gulf’s infrastructure is surging
Chinese Belt and Road Initiative (BRI) investment is a large source of the funds for these projects. Chinese investment in the GCC between 2010 and 2022 reached US$96.8bn. The MENA region is the largest recipient of BRI funding globally, and Saudi Arabia was the biggest individual recipient in the first half of 2022.
Geographical BRI spending in 2021 (as a per cent of total)
Key deals in 2022
Asia is a key provider of Gulf construction and infrastructure services, a trend that is likely to continue. Key contracts in 2022 include:
In July 2022, Saudi real estate developer, Al Saedan for Development signed a joint venture with Japanese Aizawa High Pressure Concrete Co. Ltd to transfer skills and technology to help develop Riyadh. The deal will see a factory built near Riyadh, with Aizawa transferring technology for digital cloning and 3D printers, as well as delivering a programme to upskill Saudi engineers (Azhari, 2022).
In 2022, Saudi Arabian Industrial Investments Co. (Dussur), Saudi Aramco, and Doosan Heavy Industries and Construction signed an agreement to establish a high-efficiency iron moulding and forging factory in Ras Al-Khair (Kim, 2022). The ground-breaking ceremony for this project took place in March 2022 and is expected to be completed in Q1 2025 (Gulf Construction, 2022)
In January 2022, South Korea’s Kumho Tire and Saudi Arabia’s Al-Sahm Al-Usud for Tires signed a deal to establish a production facility with capacity for 15mn tyres annually (Kim, 2022).
For more information about Asia House’s Middle East expertise and research services, and to enquire about bespoke presentations on the issues covered in the report, please contact Jonathan Smith, Corporate Affairs Manager: jonathan.smith@asiahouse.co.uk
