Genesis to build 3 manufacturing plants in Saudi Arabia |
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JEDDAH - Genesis Worldwide Inc., a provider of "green" structural building technology using light gauge steel, said it has entered into a five-year license and services agreement with Sawabeh International GroupSawabeh International Group
of Riyadh, a diversified technology and construction group of companies, to construct three light steel panel manufacturing facilities within the Kingdom.The agreement will automatically renew for an additional 10 years.
The first plant will be commissioned in Riyadh by July 2009, with two other plants to be built by July 2011 and July 2012, respectively.
Genesis said it will earn initial revenue of around $2.2 million from licensing the Genesis technology, the sale of industrial equipment and hardware, and various training and consulting services required for the commissioning of the first plant.
Genesis will earn similar revenue from the commissioning of each of the two additional plants, with revenue recognized at the time the plants are commissioned.
Part of the backdrop of this announcement is the strategic plan developed by the government of Saudi Arabia to reinvest in its economy by using its budgetary surplus in the development of new "economic cities."
Based on information from the Saudi Arabian General Investment Authority (SAGIA), these new cities will contribute $150 billion to the country's GDP by the year 2020. The cities are also expected to provide job opportunities for 1.3 million people and an increase in per capital GDP to SR125,625 ($33,500) for those living in the cities.
According to the CIA World Factbook, nearly 40 percent of the Saudi population is under 15 years of age.
Using the Genesis Solution, a turn-key solution which includes leading-edge software, industrial equipment, hardware, processes and engineering services, the SawabehSawabeh
plant will produce light steel structural panels. The proprietary Genesis technology platform will be used to build residential and commercial structures using recycled light-steel building materials, in lieu of the more expensive concrete or masonry block construction, which has traditionally been used in Saudi Arabia.Waleed S. Abalkhail, president of SawabehSawabeh
, said Genesis was the perfect fit for SawabehSawabeh's needs. "We were very interested in what Genesis could offer right from the start. There isn't a lot of infrastructure or light steel frame building expertise in place in Saudi Arabia. The Genesis turn-key Solution, which amounts to a "business in a box" approach that enables us to acquire all needed know-how to produce light gauge steel residences quickly and very efficiently, addresses our needs perfectly."Mag Mostafa, Genesis' vice president, Business Development, said that, for its part, Genesis is fully prepared to participate in this growth opportunity within the thriving Saudi economy. "We developed a comprehensive five-year business plan, conducted preliminary market research for Saudi Arabia, and ran a cost simulation for SawabehSawabeh
to illustrate different cost scenarios based on steel prices from lowest to highest, in order to provide a comfort zone for them. They recognized that the savings were significant and also saw all the additional benefits that we offer. They are already working on projects and developing a sales pipeline while establishing the new plant. This announcement solidifies our growth and expansion opportunities in a very important part of the world nowadays."Mostafa added that Saudi construction methods historically utilized concrete (which continues to rise in price), while it still uses steel rebar to build. Building with light gauge steel, which can be adapted to the different types of buildings without the additional expense of concrete, is much less expensive.
Genesis develops and licenses structural building technology aimed at the residential, commercial and institutional building markets. Genesis offers licensees a turn-key solution enabling them to custom design, manufacture and install complete light steel building structures.
The Genesis Solution encompasses engineered processes and materials that are environmentally sustainable or "green". Genesis is headquartered in Mississauga, Ontario, Canada and has licensees in the United States, Canada, Europe and the Middle East.
© The Saudi Gazette 2008
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