B. Data on Best Prospect for Agriculture and Industry Sector Exports (All data in US$ millions, unless otherwise noted.) A. Rank: 1 B. Name of Sector: Oil & Gas Field Machinery and Service C. ITA Code: OGM 1993 1994 1995 D. Total Market Size 1600 2000 2500 E. Total Local Production 0 0 0 F. Total Exports 0 0 0 G. Total Imports 1600 1840 2116 H. Total Imports from U.S. 800 920 1058 I. Exchange Rate 301 297 290 Comments: The oil and gas sector will continue to expand in Kuwait over the next two years. The state-owned Kuwait Oil Co. has embarked on an expansion proposal that will cover the various aspects of the oil and gas industry. This includes such projects as petrochemical plants, gathering centers, pipeline construction, drilling of oil wells and the reconstruction of storage tanks. The strong presence of U.S. contractors in Kuwait, coupled with the Kuwaiti preference for high quality American goods and the dominance of U.S. technical standards, makes the Kuwaiti market extremely receptive to American products and services. A. Rank: 2 B. Name of Sector: Furniture C. ITA Code: FUR 1993 1994 1995 D. Total Market Size 135 184 200 E. Total Local Production 8 6 10 F. Total Exports 20 6 10 G. Total Imports 163 196 220 H. Total Imports from U.S. 9 29 38 I. Exchange Rate: 1KD = 0.301 0.297 0.290 Comments: Building housing units for Kuwaitis is one of the Government's top priorities. It increased the housing support loan from USD170,000 to USD250,000. It is also planning to build two border cities in the north and in the south. Several Ministries will be built and planned building includes: a new university, new headquarters for Kuwait Airways Corporation, the Central Tenders Committee and the Kuwait Audit Bureau. This will create substantial demand for home and office furniture in the next few years. A. Rank: 3 B. Name of Sector: Table Eggs C. ITA Code: FOD 1993 1994 1995 (Million Eggs) D. Total Market Size 300 335 375 E. Total Local Production 50 60 75 F. Total Exports 0 0 0 G. Total Imports 250 275 300 H. Total Imports from U.S. 34 45 60 I. Exchange Rate 301 297 290 Comments: Exports of U.S. table eggs to Kuwait increased from two million eggs in 1992 to 34 million in 1993. This was mainly due to a successful EEP initiative for table eggs to the Gulf region. U.S. eggs are recognized for their high quality by the trade and consumers. The U.S. share of the Kuwaiti egg market is expected to increase steadily for the above reasons. Saudi Arabia, the Netherlands and Lebanon are other principal suppliers. A. Rank: 4 B. Name of Sector: Automotive Parts and Service Equipment C. ITA Code: APS 1993 1994 1995 D. Total Market Size 176 185 200 E. Total Local Production 0 0 0 F. Total Exports 0 0 0 G. Total Imports 176 185 200 H. Total Imports from U.S. 90 100 110 I. Exchange Rate: 1KD = 0.301 0.297 0.290 Comments: There are about 731,000 vehicles in Kuwait at present. 20,000 to 25,000 new vehicles are added to the market every year. The demand for automobile spare parts and service equipment is high due to Kuwait's tough climatic conditions, the lack of proper after-sale service, the shortage of skilled mechanics, and the high accident rate. U.S.-made cars make up approximately 50 percent of the total market. GM, Chrysler, Ford, and Jeep are represented locally. Genuine spare parts are favored, but counterfeit parts are widely available. A. Rank: 5 B. Name of Sector: Apparel C. ITA Code: APP 1993 1994 1995 D. Total Market Size 130 150 160 E. Total Local Production 2 5 9 F. Total Exports 0.5 0.7 1 G. Total Imports 130 150 160 H. Total Imports from U.S. 110 120 130 I. Exchange Rate 301 297 290 Comments: Local production of apparel is insignificant. Low-middle and low-end apparel in Kuwait consists mostly of imports from India and Pakistan, which are then relabeled in Kuwait. The high end and some of the good middle-end apparel market is dominated by the European firms. American firms can capture a larger market share by exporting maternity and childhood apparel and products as well as sports and casual wear. A. Rank: 6 B. Name of Sector: Computers and Peripherals C. ITA Code: CPT 1993 1994 1995 D. Total Market Size 110 120 130 E. Total Local Production 4 7 10 F. Total Exports 0 0 0 G. Total Imports 95 110 110 H. Total Imports from U.S. 110 120 130 I. Exchange Rate 301 297 290 Comments: Major American firms are present in the Kuwaiti market and possess about 90 percent of the total imports of mainframes, minicomputers, workstations, microcomputers and data communication equipment. Opportunities exist for U.S. firms to supply software, image processing systems and business solutions, although suppliers are cautioned that Kuwait offers no copyright protection. There are several upcoming major government projects which create an excellent potential for U.S. computer equipment. A. Rank: 7 B. Name of Sector: Security and Safety Equipment C. ITA Code: SEC 1993 1994 1995 D. Total Market Size 80 90 100 E. Total Local Production 0 0 0 F. Total Exports 0 0 0 G. Total Imports 80 90 100 H. Total Imports from U.S. 35 40 55 I. Exchange Rate 301 297 290 Comments: The Government of Kuwait is concerned with its safety and security more than ever. Frequent border intrusions forced the government to develop plans to better secure the country. Near-term major projects like the border security program and the Shuaiba Industrial Area will create good sales potential for U.S. safety and security companies in the Kuwaiti market. A. Rank: 8 B. Name of Sector: Telecommunications Services C. ITA Code: TES 1993 1994 1995 D. Total Market Size 64 70 75 E. Total Local Production 0 0 0 F. Total Exports 0 0 0 G. Total Imports 64 70 75 H. Total Imports from U.S. 20 20 33 I. Exchange Rate: 1KD = 0.301 0.297 0.290 Comments: The Ministry of Communications is gradually replacing its customer service and networking systems with several new electronic exchanges replacing the existing ones. Paging and cellular phone networks are in high demand. There are plans to proceed with a 40-channel cable TV network. AT&T was recently awarded a contract to install 33,000 phone lines. The four satellite earth stations project will be awarded to an American firm if the Ministry decides to go ahead with it. Other U.S. companies like Sprint and MCI are also present in the market offering communications services, including international long distance calls. Foreign competition in this sector comes mainly from Sweden, Japan and the U.K. A. Rank: 9 B. Name of Sector: Process Control - Industrial C. ITA Code: PCI 1993 1994 1995 D. Total Market Size 57 65.5 75.4 E. Total Local Production 0 0 0 F. Total Exports 0 0 0 G. Total Imports 57 65.5 75.4 H. Total Imports from U.S. 35 40.25 46.3 I. Exchange Rate 301 297 290 Comments: With the growth of the oil and gas sector, there will be corresponding development in the industrial process control market. This will pave the way for U.S. companies to enter the Kuwaiti market. A. Rank: 10 B. Name of Sector: Air Conditioning and Refrigeration Equipment C. ITA Code: ACR 1993 1994 1995 D. Total Market Size 95 110 120 E. Total Local Production 4 7 10 F. Total Exports 0 0 0 G. Total Imports 95 110 110 H. Total Imports from U.S. 58 60 68 I. Exchange Rate 301 297 290 Comments: Kuwait is an excellent market for air conditioning equipment. High temperatures during most of the year, intense seasonal humidity, and frequent dust storms make Kuwait an excellent market for air conditioning and refrigeration equipment. Estimated sales of such equipment during 1994 were USD 100 million. A. Rank: 11 B. Name of Sector: Sporting Equipment C. ITA Code: SPT 1993 1994 1995 D. Total Market Size 60 70 85 E. Total Local Production 0 0 0 F. Total Exports 0 0 0 G. Total Imports 60 70 85 H. Total Imports from U.S. 20 25 30 I. Exchange Rate 301 297 290 Comments: There are more than 60 sporting clubs and health and physical fitness institutes in Kuwait. In addition, there are also several physical fitness and health clubs affiliated at the seven five-star hotels. All of these facilities are potential customers for modern American sporting equipment. As Kuwait's coastal waters cover 2200 square miles, as its coastline stretches 290 km. and as it has nine islands, water sports are becoming very popular, especially among Kuwaiti youth. Recently, FCS Kuwait received a number of requests for jet skis and other water sports equipment. A. Rank: 12 B. Name of Sector: Electrical Power Systems C. ITA Code: ELP 1993 1994 1995 D. Total Market Size 47 50 55 E. Total Local Production 0 0 0 F. Total Exports 0 0 0 G. Total Imports 47 50 55 H. Total Imports from U.S. 17 20 22 I. Exchange Rate: 1KD = 0.301 0.297 0.290 Comments: The contract for building the Sabiya Power Plant project which will generate 2,400 Megawatts was signed in April 1994. The first of the eight units will operate in 1997. Rebuilding and repair of the control rooms for the Doha East and Doha West power plants were also completed. The focus now is on the rebuilding of some of the substations in various locations. There is also heavy demand need for 132/11 KV high voltage power lines. Japanese companies dominate the power generation equipment market in Kuwait. A. Rank: 13 B. Name of Sector: Airport and Ground Support Equipment C. ITA Code: APG 1993 1994 1995 D. Total Market Size 67 77 88 E. Total Local Production 0 0 0 F. Total Exports 0 0 0 G. Total Imports 67 75 84 H. Total Imports from U.S. 20 23 26.5 I. Exchange Rate 301 297 290 Comments: The Government of Kuwait's Directorate General of Civil Aviation has a master plan prepared by NAACO of the Netherlands to expand the existing airport to accommodate more traffic and passengers. This major project will require various types of equipment, including navigational instruments, radars and conveyors. A. Rank: 14 B. Name of Sector: Pharmaceuticals C. ITA Code: DRG 1993 1994 1995 D. Total Market Size 50 57.5 66 E. Total Local Production 0 0 0 F. Total Exports 0 0 0 G. Total Imports 50 57.5 66 H. Total Imports from U.S. 20 23 26 I. Exchange Rate 301 297 290 Comments: The Ministry of Health and Kuwait University Medical School are embarking on a revamping of the medical sector, including the pharmaceutical industry. Much of Kuwait's financial resources will be allocated to the establishment of American-standard health care services. There are six major government hospitals, 53 clinics and 6 privately owned hospitals in Kuwait, with an overall anticipated growth rate of about 5%. These developments will likely make the pharmaceutical industry in Kuwait more profitable. A. Rank: 15 B. Name of Sector: Dental Equipment C. ITA Code: DNT 1993 1994 1995 D. Total Market Size 37 40 48 E. Total Local Production 0 0 0 F. Total Exports 0 0 0 G. Total Imports 37 40 48 H. Total Imports from U.S. 13 15 19 I. Exchange Rate 301 297 290 Comments: European companies hold about 60 percent market share of the total imports, while the U.S. firms retain the remaining 40 percent. There are many new private clinics, and more than 15 licenses have been granted to establish new private hospitals in Kuwait. In addition, government and private sectors will upgrade existing medical services facilities. Opportunities exist in this field, especially in the areas of laboratory equipment, disposables, and consumer items. A. Rank: 16 B. Name of Sector: Construction Equipment C. ITA Code: CON 1993 1994 1995 D. Total Market Size 30 35 40 E. Total Local Production 0 0 0 F. Total Exports 0 0 0 G. Total Imports 30 35 40 H. Total Imports from U.S. 9 10.5 12 Exchange Rate: 1KD = 0.301 0.297 0.290 Comments: Due to the budgetary restraints in Kuwait, only key construction major projects are being carried out. Work on the first and sixth ring roads has resumed and is almost complete. However, there are plans to build two new cities and allocations to build thousands of new houses as part of the huge al Qurain housing project. The civil works of the 2400 MW Sabiya Power Plant, the new American Embassy compound, a new building for the Voice of America, and the new headquarters of the Kuwait Airways Corporation, just to name a few, are all projects that will increase the demand in Kuwait for construction equipment. A. Rank: 17 B. Name of Sector: Cosmetics and Toiletries C. ITA Code: COS 1993 1994 1995 D. Total Market Size 28 31 34 E. Total Local Production 0 0 0 F. Total Exports 0 0 0 G. Total Imports 28 31 34 H. Total Imports from U.S. 7 8.4 10 I. Exchange Rate 301 297 290 Comments: Imports account for 100% of this very competitive market. Despite their low market share, American products are in high demand. With a competent local agent and a long term policy of increasing one's presence, an American firm can substantially increase its market position in this sector. A. Rank: 18 B. Name of Sector: Corn Oil C. ITA Code: FOD 1993 1994 1995 (Thousand Metric Tons) D. Total Market Size 15 17 19 E. Total Local Production 0 0 0 F. Total Exports 0 1 1 G. Total Imports 15 18 20 H. Total Imports from U.S. 7 9 10 I. Exchange Rate 301 297 290 Comments: Corn oil is the preferred cooking oil in Kuwait and the other Gulf countries. As of 1992, a local firm started to pack corn oil imported from the United States in bulk. Consumption of corn oil, and consequently imports from the United States, are expected to increase steadily as the locally packed oil is offered at competitive prices. U.S. corn oil exports to Kuwait more than doubled in 1993. Saudi Arabia, Singapore and the U.A.E. are other principal suppliers of corn oil to the Kuwaiti market. A. Rank: 19 B. Name of Sector: Management Consultancy Services C. ITA Code: MCS 1993 1994 1995 D. Total Sales 18 20 22 E. Sales By Local Firms 0 0 0 F. Sales By Local Firms 0 0 0 G. Sales by Foreign Firms 15 18 22 H. Sales by U.S. Firms 8 9 11 I. Exchange Rate 301 297 290 Comments: The planned privatization of many industries in Kuwait coupled with the fast pace of technological development sweeping international business promise many opportunities for management consulting companies to restructure Kuwaiti firms to compete in world markets. A. Rank: 20 B. Name of Sector: Pumps, Valves and Compressors C. ITA Code: PVC 1993 1994 1995 D. Total Market Size 50 55 61 E. Total Local Production 0 0 0 F. Total Exports 0 0 0 G. Total Imports 50 55 61 H. Total Imports from U.S. 6 7.5 9 Exchange Rate: 1KD = 0.301 0.297 0.290 Comments: The total annual demand for pumps, valves and compressors for the oil industry is estimated at $20 million. Oil sector sources expect a considerable demand increase in the next few years due to the drilling of new wells, the re-establishing of several gathering centers, the extension of hundreds of kilometers of pipe lines and the building of new projects. Although American PVC products are well received in Kuwait, they occupy only 30% of the market. Japanese and Italian firms are the main competitors of U.S. suppliers. A. Rank: 21 B. Name of Sector: Pollution Control Equipment C. ITA Code: POL 1993 1994 1995 D. Total Market Size 18 21 25 E. Total Local Production 0 0 0 F. Total Exports 0 0 0 G. Total Imports 18 21 25 H. Total Imports from U.S. 7 8 9.2 I. Exchange Rate 301 297 290 Comments: The Kuwait Institute of Scientific Research has done a study calling for automobile pollution control standards. Also, the National Assembly is studying implementation of legislation imposing stricter environmental protection standards. These developments augur well for suppliers of air, water and land pollution equipment. A. Rank: 22 B. Name of Sector: Poultry Meat C. ITA Code: FOD 1993 1994 1995 (Thousand Metric Tons) D. Total Market Size 60 65 65 E. Total Local Production 18 19 20 F. Total Exports 1 1 1 G. Total Imports 50 45 45 H. Total Imports from U.S. 3 4 5 I. Exchange Rate 301 297 290 Comments: U.S. frozen chicken and chicken parts are known for their high quality. The existence of an EEP program for whole chickens is expected to enhance sales of frozen whole chickens to this country. Also, more brands of U.S. chicken parts are being offered on the Kuwaiti market. Brazil, France and Denmark dominate the market for whole chickens. The United States and Brazil dominate the market for chicken parts. Whole chickens represent 90 percent of total imports of chicken meat. The preferred size for whole chickens ranges from 900-1,200 grams per bird. Chicken parts are imported in two pound trays. A. Rank: 23 B. Name of Sector: Telecommunications Equipment C. ITA Code: TEL 1993 1994 1995 D. Total Market Size 105 25 50 E. Total Local Production 0 0 0 F. Total Exports 0 0 0 G. Total Imports 105 25 50 H. Total Imports from U.S. 50 8 35 I. Exchange Rate: 1KD = 0.301 0.297 0.290 Comments: Market size will decline sharply over the next two years because a significant amount of the telecommunications equipment needed for reconstruction has already been purchased. However, several larger exchanges will be bought to replace existing smaller ones. The telecommunications tower will require a lot of equipment to be ready for operation in two years. A lot of equipment, mainly from the U.S., will also be needed for the four satellite earth stations if that project materializes.