x Abu Dhabi, UAEMonday 24 July 2017

New city's date with destiny

As Saudi Arabia continues its drive to rely less on its oil exports and more on its other natural resources, the latest focus of attention is on dates.

JEDDAH // Saudi Arabia has opened its first "date city" north of the capital in a bid to develop its 5.5-billion riyal (Dh5.4bn) date industry, part of the oil-rich kingdom's efforts to ease its dependence on oil revenues. The new city will encompass the kingdom's first commodity bourse for trading dates, a hotel, a mall, a training centre for young Saudis wishing to join the industry, packaging factories and offices for major marketing and agricultural companies.

The 52 million riyal area, located in al Qaseem province, covers 165,000 square metres, and was partially opened last week allowing a limited number of farmers and traders to sell this year's produce. Usually, the farmers sell their dates out of the back of their pick-up trucks. Saudi Arabia is one of the world's top three date producers after Egypt and Iran, but only a small proportion of its yield, (3.9 per cent), is exported as the country lacks the production and marketing capability.

Saudi exports of dates brings in revenue of around 96 million riyals, or around three per cent of the entire foodstuff exports worth 3.2bn riyals, according to the ministry of agriculture numbers. Currently Saudi produces 970,000 tonnes of dates a year; the number is expected to rise above one million by 2010. "There are other parties that are benefiting from our dates by repackaging and re-exporting them to the international market under other names," said the deputy governor of al Qaseem province, Prince Faisal bin Mishaal.

"I always hear that Saudi dates are sold in Europe under the name of exporters from other countries and this makes me feel bad as these countries are gaining a good reputation from our dates," he said. Prince Faisal said one of the main reason that Saudi had been unable to develop its date industry was that it did not have the correct tools. "If we don't have a farmer to produce dates, a marketer to market it and a manufacturer to package it based on international standards, our dates production will never develop and the local farmer will always market his produce using traditional methods," said Prince Faisal, who called on Saudi businessmen to open packaging factories to help date producers compete internationally.

According to the ministry of agriculture, there are 50 date packaging plants in Saudi with the capacity to process 70,000 tonnes annually, which amounts to just eight per cent of the entire Saudi production. "We are in front of a completely integrated city to market dates and this makes it a core for an agro-industrial city for the dates industry," the columnist Abdul Aziz al Jarallah wrote in the al Eqtisadiah business daily newspaper.

"The city will have factories to serve the entire Saudi date industry, and marketing companies to market and distribute the produce," he said. But Mr al Jarallah still questioned the city's ability to develop into a large scale, agro-industrial city such as other industrial cities in the kingdom. Dates are grown mainly in three regions: Riyadh, al Qaseem and al Hassa in the eastern province where one quarter of the world's proven oil reserves exist.

Developing its overseas markets for dates has become more important for the kingdom as it tries to diversify away from oil. To achieve this, Saudi Arabia has embarked on a major plan to build several economic centres based on the success of its Jubail and Yanbu industrial cities, which are home to the kingdom's petrochemical industry. The first oil boom of the 1970s helped Saudi to finance the building of the two cities while the current boom that ended in July last year after the price of oil started to drop sharply has brought to the fore four new economic cities under development and another two under consideration.

The Saudi Arabia General Investment Authority estimates that the six economic cities, which are planned to be fully operational by 2020, will contribute US$150 billion to them GDP growth, create 1.3 million jobs and accommodate 4.8 million people. The cities will also be home to industries in steel, plastic, glass and ceramic. One of the cities will serve as a logistic centre linking Iraq, Syria and Jordan with the Gulf through a network of railways.

Another is dedicated to investment in knowledge-based industries such as education, health and science, worth another $100bn in investments. wmahdi@thenational.ae