Comprehensive reforms create business opportunities
Saudi Arabia is undergoing profound economic upheaval. One decisive factor was the announcement by Saudi Crown Prince Mohammed bin Salman in April 2016; then still Deputy Crown Prince, he pronounced the “Vision 2030,” a reform agenda intended to help Saudi Arabia to reduce its dependence on oil and diversify its economy. Among other things, privatization and liberalization of various economic sectors are planned, with the aim of attracting foreign investment and expertise.
Swiss SMEs are also reacting to these changes, says Ruedi Büchi, Senior Consultant for the countries of the Middle East at S-GE. “Since the announcement of the Vision 2030, the interest of Swiss exporters in Saudi Arabia has again increased significantly.”
Saudi Arabia is already the second most important export market in the Arab world for Swiss companies. This is especially true in the luxury goods industry, where the largest of the Arab economies is an important sales market.
Competitive advantage thanks to free trade agreements
Switzerland has a free trade agreement with Saudi Arabia; in force since 2014, it give Swiss exporters a significant competitive advantage. Ruedi Büchi explains: “Unlike the EU, Switzerland is economically tied to the Gulf Cooperation Council via a free trade agreement. Cooperating countries in the Gulf region include Saudi Arabia, Bahrain, Qatar, Kuwait, Oman and the United Arab Emirates. The free trade agreement with these countries allows Swiss exporters to benefit from lucrative tariff savings.”
Personal testimony from two businesswomen
In order to show Swiss SMEs the business opportunities in Saudi Arabia, Switzerland Global Enterprise organized a business trip for women to Riyadh. Under the leadership of S-GE President Ruth Metzler-Arnold, the four-day program included meetings with local chambers of commerce, officials and Saudi business people.
One of the participants was Marion Klein, CEO and owner of Pack Easy AG, an SME from Emmen LU specializing in the production and sale of Swiss luggage. What made you decide to take part in the business trip to Saudi Arabia? “Saudi Arabia is currently undergoing major economic and social changes. The market and the people are open and dynamic. These are attractive conditions for us as an internationally active SME.”
Yvonne Breier, Marketing Manager of chocolate waffle producer Kägi Söhne AG, also participated in the trip to Saudi Arabia: “It may come as a surprise, but Saudi Arabia is today the most important export country for Kägi.” The Toggenburg-based SME has been active in the Kingdom since 1981. How did Kägi manage to establish itself in the Saudi Arabian market? “For one thing, we certainly were able to accommodate the relatively high consumption of sweets in the country,” lists Breier as a reason for their success. “And as a Swiss company, we benefit in particular from the fact that local consumers are very keen on quality food.”
Ruth Metzler-Arnold, Chairwoman of S-GE, praises the Swiss participants: “I am deeply impressed by how professionally the 15 Swiss women entrepreneurs from the most diverse industries presented themselves as well as the level of enthusiasm and excitement we received from the Saudis.”
“When talking to people, you quickly realize that Switzerland enjoys an excellent reputation in Saudi Arabia,” says Marion Klein. But she stresses that quality and Swissness alone are not enough: “The business culture in Saudi Arabia is a challenge. For example, cultural and religious rules seep into business life much more than in Western countries.”
Yvonne Breier attests to this by giving us an example: “The Swiss brand enjoys an excellent reputation here, but that doesn’t mean that one should aggressively promote their product with the Swiss Cross. Because this is often perceived here as a religious symbol.”
Sound out business opportunities
Would you like to sound out your business opportunities in Saudi Arabia with no commitment? Sign up for a free country consulting session and discuss your export project with Ruedi Büchi, our Senior Consultant for Saudi Arabia. Contact now