(Source: Info-Prod Research (Middle East))Despite boasting one-fifth of proven, conventional world oil reserves, Saudi Arabia has not achieved significant economic growth outside the petrochemical sector. Petroleum has remained the backbone of the Kingdom's economic maturation with IMF figures suggesting that oil accounted for 90 percent of Saudi export earnings and over 40 percent of the country's GDP in 2006. Of its recorded trade, a considerable share is with the United States. In the decade between 1998 and 2008, the U.S. Government estimated that total Saudi exports to the U.S. jumped from $6.2 billion to $54.8 billion. Today, the United States is Saudi Arabia's largest trading partner with Saudi Arabia representing the largest U.S. export market in the Middle East. In spite of trade being largely confined to the petroleum sector, an examination undertaken by Info-Prod Research found several companies that have profited the petrochemical sector. Among these companies is the Riyadh-based Middle East Propulsion Company (MEPC), which in 2007 secured a $50.4 million contract from the U.S. Air Force to provide repair and maintenance services for aircraft engines. Another company, Saudi Logistics and Technical Support (SALTS), traded in values exceeding $81 million with U.S. partners that include the U.S. Government, Raytheon and COLSA International. In February 2009, SALTS attracted public attention after being brought to the U.S. Court of Federal Claims for allegedly overstating subcontract costs in its deal with the U.S. Government. Other large players include Alsalam Aircraft Company, Al Raha Group For Trading Services, and Atheeb Intergraph Saudi Company, which have collectively exported over $100 million worth of products and services to the U.S. in the fields of aircraft maintenance and software management services. In addition to major corporations, several smaller Saudi-based businesses have initiated noteworthy transactions with U.S. partners. Info-Prod Research analysts estimate that in 2007, Arabian Business Machines Company, for instance, earned over $20,000 from U.S.-based trade while Hoshanco Office Automation, a Riyadh-based company, exceeded $26,000 in earnings from U.S.-based trade. Though sluggish, the non- petroleum Saudi private sector is projected to grow. According to data from Standard Chartered Bank, Saudi Arabia is expected to spend over $100 billion on infrastructure projects over the next three years. This spending, in addition to amplified private investments, will boost the non-petroleum private sector resulting in increased Saudi exports to the U.S. (Ariel Goldring).

Originally published by Info-Prod Strategic Business Information.

(c) 2009 Info-Prod Research (Middle East). Provided by ProQuest LLC. All rights Reserved.

A service of YellowBrix, Inc.