Trading with the Gulf States is about much more than oil and fighter jets.

The countries sharing the coastline of the Persian Gulf are famous for their abundant natural resources. Oil and gas underpin the economies of Qatar, Saudi Arabia, Bahrain, Oman, Kuwait and the UAE – yet opportunities for UK businesses looking to trade with these countries exist across a range of sectors including environment, training, education, fire, police, security, transport and agriculture, as well as the more obvious oil, gas and petrochemical industries.

The Gulf States can easily be overlooked by British businesses in favour of established markets in Europe and North America or emerging ones in Brazil, Russia, India and China, yet firms with the right technology and expertise are in a good position to capitalise on the prospects in the Middle East.

Many UK technology companies are creating new and more efficient systems for detecting, extracting and processing hydrocarbons in the oil and gas industry, while scores of British construction and engineering firms are involved in the design and building of some of the world’s most ambitious development projects that are currently being planned in various Gulf States.

Mustaq Birader, UKTI’s North West expert on Middle East markets, says that companies cannot afford to ignore the area’s economic growth and massive infrastructural development. He says, “The Gulf States has money to spend to meet the many demands of its fast growing population, and is just a seven-hour flight away from the UK.”

Alongside the UAE, which is making a bold bid to be the region’s tourism capital and a hub for Arabian commerce, the two other thriving markets in the region are Saudi Arabia and Qatar. Saudi Arabia is Britain’s largest trading and investment partner in the Middle East, with business flourishing in both directions. UK exports to Saudi were worth £1.6bn in 2005, and Britain is Saudi’s second largest foreign investor after the USA. The Kingdom has a vibrant financial services sector, helped by its recent accession to the World Trade Organisation and its increasing integration with international markets in recent years.

“We are spending over £620bn on a huge range of projects... and we would like British companies to help us spend it,” said Saudi Arabian Ambassador HRH Prince Mohammed bin Narwaf on a recent visit to Manchester, which was held to encourage trade links between the countries.

Much of the nation’s impressive economic growth is being fuelled by the consistently high oil price, coupled with its Government’s goal to re-invest this wealth in properly-structured strategic planning.

Saudi Arabia has an ambitious programme to develop the Kingdom’s infrastructure, with the biggest private sector project being the $26.8bn King Abdullah Economic City (KAEC) (www.kingabdullahcity.com) being developed near Rabigh, by construction company Emaar.

Other new “City” projects such as Knowledge Ecomonic City, Prince Abdul Aziz bin Mosaed Economic City, Raz al Zour (mining and minerals) and the King Abdullah Financial District have all been recently announced.These are all designated as Special Economic Zones (SEZ) to facilitate trade and foreign investment through tax breaks, free trade zones, preferential utility costs and other incentives.

UK Trade & Investment has several teams in Saudi Arabia (based in Riyadh, Jeddah and Al Khobar) to help British companies ready to match Saudi Arabia’s own steps towards economic development and prosperity. Meanwhile, to the east of the Kingdom, Qatar is enjoying something of an unprecedented boom. The recent host of the 2006 Asian Games (held in its capital, Doha) is becoming one of the world’s richest nations, having literally doubled its economy in size since 1999.

Qatar’s oil reserves measure around 15bn barrels – or 1.4 per cent of the world’s proven stocks – and its current production rate of around 660,000 barrels per day means that its supplies should last for another 63 years. More impressive, however, are the country’s plentiful gas fields, which at 909 trillion cubic feet are the third largest in the world.

UK exports to Qatar during 2005 amounted to £362.6 million, and the Qataris are also large investors into the UK, currently working on the construction of a gas terminal at Milford Haven (a joint venture between Shell and QatarGas) that will supply up to ten per cent of the UK’s domestic gas demand by 2010. The Qataris also hold significant investments in property and other portfolios.

Qatar presents a number of real prospects for British industry. As well as recent investments to increase its oil and gas outputs, there are many projects underway, including the construction of the New Doha International Airport. This will help to cater for a planned increase in passenger traffic to 12.5 million flights per year by the time the first phase is complete in 2009, with further expansion due to continue until 2015. The airport has been designed specifically to accommodate the new Airbus A380 – of which Qatar Airways is a launch customer.

Another major project is the Pearl Qatar – a huge, man-made island of 400 hectares which will eventually contain ten themed parks, 8,000 residential units, four marinas, hotels, schools and retail/leisure facilities for up to 30,000 people. It will also be the country’s first development to offer freehold properties to international investors.Qatar is also developing an education and medical city, and plans for the construction of a 40km Causeway linking Qatar with Bahrain are now moving forward.

The Qatar Government welcomes foreign investors and is keen to promote projects involving the transfer of foreign expertise and technology to the Qatari economy. The enactment of the Foreign Investment Law in 2000 – allowing up to 100 per cent foreign ownership in sectors including agriculture, manufacturing, health, education and tourism – confirms the Government’s commitment to attracting new investors to participate in the development of business in the State.

For more information on opportunities in Qatar and Saudi Arabia, or any other of the Gulf States, contact UKTI North West’s Middle East markets expert Mustaq Birader on 0161 237 4145, or e-mail: This e-mail address is being protected from spam bots, you need JavaScript enabled to view it

CASE STUDY –
PURPLE GOLD
Oil isn’t the only valuable liquid in the Gulf States. One of the most popular soft drinks in the MiddleEast is fruit cordial Vimto – a North West favourite created by John Noel Nichols in 1908 in Manchester and now produced in nearby Newton-le-Willowsby the firm, which is still led by his grandson.

The purple-coloured cordial has long been a favourite in the Arab states as a non-fizzy alternative to the major US brands. Manufactured to a sweeter formula under licence by Aujan Industries, it is said to be a great accompaniment to dates.

“Since its introduction in 1928, Vimto has become an intrinsic part of the Ramadan celebrations, when over 20 million bottles are sold across the region, dominating the diluted drinks sector with over 90 per cent of the market share,”
explains Mike Segar of Vimto International.

“Vimto has just celebrated its 80th Ramadan and continues to go from strength to strength.”

Another North West company, Accepta, based in Trafford, Manchester, is building up a steady stream of business in the Middle East.The company provides advanced chemical treatment technology and carries out a lot of transaction via its website, accepta.com, which won a DTI award for e-commerce in 2004.

Managing director Nigel Richardson admits that he had limited knowledge of exporting when he set up the business five years ago but, after attending UKTI’s Passport to Export course for new and inexperienced exporters, he now exports to 70 countries and overseas trade makes up a third of his business.

“There are lots of opportunities for us in the Middle East because of the petrochemical industry,” he says. “We have recently sent out water treatment chemicals to put in the water used to pressure test oil pipes for leaks, because if untreated water were used it would contaminate and corrode the pipes.

“Most of our international business is done via the website, which we believe is the most visited water treatment website in the world, but I have been to Dubai to meet potential and existing customers as they like to do business face to face. I also visited UKTI staff at the Embassy who were most helpful. We would encourage companies who think they have the right sort of products or services to seriously consider the Gulf States as a market.”

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