A look at five key Saudi investments in Asia

Saudi Arabia’s King Salman is currently on a month-long tour of Asia aimed at building ties with oil-importing countries and promoting investment opportunities in the kingdom. Argaam takes a look at five key Saudi investments and projects in Asian countries. 

1) Saudi Arabia’s Public Investment Fund (PIF) agreed with Japan’s Softbank Group last October to set up a $100 billion technology investment fund. SoftBank has injected $25 billion in the new entity, named the SoftBank Vision Fund, while PIF will commit $45 billion over the next five years.

2) State-owned Saudi Aramco is planning to invest $7 billion in an oil refinery, which will be built by state-run Petroliam Nasional Bhd (Petronas) in Johor, Malaysia. The new refinery is part of the planned $27 billion Refinery and Petrochemical Integrated Development (RAPID) project, sponsored by Petronas.

3) Aramco also signed a deal with Indonesia’s PT Pertamina last December to speed up the upgrade of the Cilacap refinery in central Java. The new agreement enables the upgraded project to move to the Front End Engineering Design (FEED) phase by Q2 2017. The project is expected to start up in 2021, and will be 55 percent owned by Petramina, with the rest to be held by Aramco.

4) Saudi Basic Industries Corp (SABIC), along with China’s Shenhua Ningxia Coal Industry Group Co. Ltd. (SNCG) and the Ningxia Hui government, agreed last year to cooperate on developing a potential joint venture (JV) between SABIC and SNCG to build a coal-to-chemicals complex. Located in the Ningxia Hui region, the project will focus on producing polymer derivatives. SABIC CEO Yousef Al-Benyan said the JV is expected to cost between $3 billion to $4 billion.

5) Saudi Arabia’s Lionhorn Pte Ltd bought franchise rights last December for McDonald’s restaurants in Singapore and Malaysia, as the New York-listed fast food chain looks to move away from direct ownership in Asia. McDonald’s said it transferred its ownership interest in 390 restaurants, more than 80 percent of which were company-owned, on Dec. 1 to Lionhorn. The financial value of the deal was not disclosed. However, Reuters had earlier reported that Mc Donald’s was nearing a deal worth up to $400 million to franchise the outlets to Saudi Arabia’s Reza Group.

Write to Jerusha Sequeira at jerusha.s@argaamnews.com