Arab Press

بالشعب و للشعب
Sunday, Mar 03, 2024

Latin American SMEs keen to collaborate with Saudi Arabia

Saudi Arabia is actively seeking to diversify its economy beyond petroleum by engaging with international partners, including in Latin America.
During a tour led by Saudi Investment Minister Khalid Al-Falih in July and August 2023, the focus was on establishing economic ties with potential partners in Latin America.

Notably, Saudi Arabia is supporting small and medium-sized enterprises (SMEs), including with a $5 million fund in Paraguay aimed at creating a guarantee fund to potentially increase the initial investment tenfold.

This support is crucial as 98% of Paraguayan companies lack access to credit, impeding their ability to invest and improve productivity, according to Guillermina Imlach, who leads an industrial SME association in Paraguay.

Colombian exports to Saudi Arabia, primarily by SMEs, amounted to around $80 million, indicating significant growth potential for smaller businesses in the Saudi market.

Cecilia Porras Eraso of the Arab Colombian Chamber of Commerce suggested that Colombian SMEs could expand in Saudi Arabia through partnerships and business assistance.

Similarly, in Argentina and Brazil—major exporters of animal proteins to the Middle East—SMEs are slowly increasing their trade footprint. Argentine SMEs saw a 5% increase in exports to the Middle East in 2021, with $247 million worth of goods, 30% of which went to Saudi Arabia.

In Brazil, Tamer Mansour, CEO of the Arab Brazilian Chamber of Commerce, views Al-Falih's visit as a positive sign for Saudi investment in local SMEs. Osmar Chohfi, also from the chamber, highlighted the diverse potential of Brazilian SMEs in various sectors for Saudi investment.

In Argentina, SMEs are accessing the Arab market through international events, with companies in food and beverage, pharmaceuticals, and other industries showing great potential for Saudi collaboration, according to Walid Al-Kaddour of the Argentine-Arab Chamber of Commerce. Al-Kaddour advocates joint ventures with Saudi investors across all business scales.

Alfredo Abboud from the Argentinian Chamber of Commerce for the UAE underscores the importance of SMEs collaborating to meet Saudi market demands.

He cites his own experience in pooling Argentine alfalfa firms, alongside Gabriel Osatinsky, in a partnership with Saudi irrigation companies to exchange Argentine agricultural products for much-needed irrigation equipment.

This collaboration aims to create a beneficial cycle of trade and investment, demonstrating that even smaller producers can thrive together in the Saudi market.

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