APPENDIX B BEST PROSPECT SECTORS FOR U.S. EXPORTERS TO SAUDI ARABIA (US$ millions, unless otherwise noted) A. Rank: 1 B. Name of Sector: AIRCRAFT & PARTS C. ITA or PS&D Code: AIR 1993 1994(E) 1995(E) D. Total Market Size 2200 2684 3274 E. Total Local Production 0 0 0 F. Total Exports 0 0 0 G. Total Imports 2200 2684 3274 H. Total Imports from U.S. 2050 2500 3050 I. Exchange Rate 3.75 3.75 3.75 Comments: The Saudi national airlines, Saudia, will soon purchase some 60 aircraft. This will be among the largest foreign aircraft sales of the 1990's. The overall sale of aircraft will be worth $5 billion or more, and parts will add another $2 to 4 billion, spread out over several years. Competition has been fierce, but U.S. suppliers are well positioned to take some or all of this business. Military aircraft sales also represent a substantial opportunity for U.S. suppliers. Saudi Arabia recently ordered 72 American-built F-15's and 48 British Tornados. Most promising subsectors within the sector, along with estimated 1995 total market size of each subsector (USD millions): Civilian aircraft $500, Military aircraft $500. A. Rank: 2 B. Name of Sector: TELECOMMUNICATION EQUIPMENT C. ITA or PS&D Code: TEL 1993 1994(E) 1995(E) D. Total Market Size 1500 1500 1700 E. Total Local Production 10 15 25 F. Total Exports 5 7 20 G. Total Imports 1495 1492 1695 H. Total Imports from U.S. 300 500 600 I. Exchange Rate 3.75 3.75 3.75 Comments: The Kingdom is currently in the process of awarding a massive telephone expansion project (TEP6), which will add up to a million additional lines to the Saudi phone system. Associated with this project are large investments in public switching, microwave links, radio communications and fibre optics. The total value of the contract should reach $3 billion over several years. Most promising subsectors within the sector, along with estimated 1995 total market size of each subsector (USD millions): On-premises customer equipment $100-120; Cellular Telephones $100. A. Rank: 3 B. Name of Sector: AUTOMOBILE & LIGHT TRUCKS/VANS C. ITA or PS&D Code: AUT 1993 1994(E) 1995(E) D. Total Market Size 2400 2500 2600 E. Total Local Production 0 0 0 F. Total Exports 190 190 200 G. Total Imports 2590 2690 2800 H. Total Imports from U.S. 960 1050 1150 I. Exchange Rate 3.75 3.75 3.75 Comments: Traditionally Saudi per capita spending on automobiles is among the highest in the world,and market downturn in other sectors of the Saudi economy is not expected to affect motor vehicle sales in 1995. In addition to individual purchasers, end users include company fleets and car rental companies,which are among the largest purchasers of motor vehicles in Saudi Arabia. Competition from Japanese smaller cars and light trucks is strong. Almost 10 percent of imported vehicles are re-exported to neighboring markets in Sudan, Yemen, Djibouti and Ethiopia. The most promising subsector within the sector, along with its estimated 1995 market size (USD millions): Passenger cars, $1700. A. Rank: 4 B. Name of sector: AUTOMOTIVE PARTS & SERVICE EQUIPMENT C. ITA or PS&d Code: APS 1993 1994(E) 1995(E) D. Total Market Size 1950 2125 2330 E. Total Local Production 375 411 467 F. Total Exports 15 16 17 G. Total Imports 1590 1730 1880 H. Total Imports from U.S. 635 690 750 I. Exchange Rate 3.75 3.75 3.75 Comments: Saudi Arabia is the fifth largest world market for U.S. auto parts and equipment, and it is a major importer of both new and used motor vehicles from the U.S. Used vehicles are repaired and refurbished in Saudi Arabia for resale, and this represents a significant portion of the market for automotive parts. Although some spare parts are manufactured locally under license, the bulk of automotive parts are imported. Most promising subsectors within the sector, along with estimated 1995 market size of each subsector (USD millions): engine replacement parts $450-500; A/C automotive parts $30-35. A. Rank: 5 B. Name of Sector: DEFENSE EQUIPMENT AND SERVICES C. ITA or PS&D Code: DFN 1993 1994(E) 1995 (E) D. Total Market Size 5500 n.a. n.a. E. Local Production 0 0 0 F. Total Exports 0 0 0 G. Total Imports 5500 n.a. n.a. H. Total Imports from U.S. 3150 n.a. n.a. I. Exchange Rates 3.75 3.75 3.75 Comments: The Gulf War exemplified the hostile atmosphere prevailing in the Middle East. In the aftermath of the Gulf war, the Saudi government boosted its defense spending to counter any external threat to its sovereignty. Defense spending accounts for more than 30 per cent of government spending. Most promising subsectors within the sector, along with estimated 1995 total market size of each subsector (USD millions): Over-the-road military vehicles $300-350; Armored vehicles $1500-$2000; Communications equipment $200-500. A. Rank: 6 B. Name of Sector: ELECTRICAL POWER SYSTEMS C. ITA or PS&D Code: ELP 1993 1994(E) 1995(E) D. Total Market Size 1000 1020 1040 E. Total Local Production 80 85 90 F. Total Exports 4 4.1 4.2 G. Total Imports 924 939 954 H. Total Imports from U.S. 250 255 260 I. Exchange Rate 3.75 3.75 3.75 Comments: The electric power sector is being expanded with the construction of a new 1200 MW power plant in Riyadh. The plant if begun in summer of 1994, should be completed by 1996. An additional 13 projects should be awarded in the next two years, for a total of 9455 MW of capacity. In addition, annual procurement of parts and materials for replacement and other expansion works will fuel demand. Forthcoming major project is GAZLAN for SCECO-East for 2400 MW additional capacity and Shoiaba for SCECO-WEST adding 1500 MW capacity to the grid. The most promising subsectors within the sector, along with estimated 1995 total market size of each subsector (USD millions) are: Mobile electric generators $80-100; Generator spare parts and accessories $20-25. A. Rank: 7 B. Name of Sector: OIL & GAS EQUIPMENT AND SERVICES C. ITA or PS&D Code: OGM 1993 1994(E) 1995(E) D. Total Market Size 1400 1100 880 E. Total Local Production n.a. n.a. n.a. F. Total Exports n.a. n.a. n.a. G. Total Imports 1190 930 740 H. Total Imports from U.S. 550 420 330 I. Exchange Rate 3.75 3.75 3.75 Comments: Saudi Arabia is the largest single producer of oil in the world, and industry estimates put Saudi reserves at one quarter of the world total. The OGM market is large but is undergoing a rapid contraction which is expected to continue through 1995. Saudi Aramco is winding down its big expansion program. Warehouse stocks are high and will be drawn down before new purchases are made. Because of the weak oil market, facilities are being mothballed, personnel demobilized, and work schedules stretched out. Current production is only about 8 million barrels per day - 80 percent of capacity. A few sizeable projects will go forward, however, and U.S. products are considered very competitive in high-technology areas. The most promising subsector within each sector, along with estimated 1995 total market size of each subsector (USD millions) is: Oil & gas field equipment $360. A. Rank: 8 B. Name of Sector: CHEMICAL PRODUCTION MACHINERY C. ITA or PS&D Code: CHM 1993 1994(E) 1995(E) D. Total Market Size 1225 1300 1475 E. Total Local Production 185 200 220 F. Total Exports n.a. n.a. n.a. G. Total Imports 1040 1100 1255 H. Total Imports from U.S. 260 275 315 I. Exchange Rate 3.75 3.75 3.75 Comments: The private sector and joint venture SABIC companies are pushing forward with many industrial ventures in the downstream petrochemical and support industries located in Jubail and Yanbu industrial cities. The $1.0 billion first phase of the Ras Tanura refinery upgrade is progressing along with lesser projects at other Saudi ARAMCO (formerly SAMAREC) refineries. Most promising subsectors within the sector, along with estimated 1995 total market size of each subsector (USD millions): Petrochemical Production Machinery $1100. A. Rank: 9 B. Name of Sector: COMPUTERS AND PERIPHERALS C. ITA or PS&D Code: CPT 1993 1994(E) 1995(E) D. Total Market Size 445 440 450 E. Total Local Production 0 0 0 F. Total Exports 0 0 0 G. Total Imports 445 440 450 H. Total Imports from U.S. 315 310 320 I. Exchange Rate 3.75 3.75 3.75 Comments: Computer utilization is on the rise and the replacement market for upgraded and higher capacity computers is also growing. Saudi businesses and government agencies are shifting away from mainframes and mid-range computers to more flexible, faster, and cheaper micro computers or PC's in a networking environment. One industry study estimated that there are now as many as 400,000 personal computers in the Kingdom. Most promising subsectors within the sector, along with estimated 1995 total market size of each subsector (USD millions): Personal computers $250-275; Laser printers $60-65. A. Rank: 10 B. Name of Sector: AIR CONDITIONING AND REFRIGERATION EQUIPMENT C. ITA or PS&D Code: ACR 1993 1994(E) 1995(E) D. Total Market Size 900 972 1050 E. Total Local Production 72 78 84 F. Total Exports 45 49 53 G. Total Imports 873 943 1019 H. Total Imports from U.S. 235 306 397 I. Exchange Rate 3.75 3.75 3.75 Comments: Prevailing harsh climatic conditions make the Kingdom a highly lucrative market for A/C equipment and parts. The mini boom in construction since the end of the Gulf War has meant strong growth in the demand for new air conditioning systems. Industry experts expect construction, especially in the private sector, to continue unabated over the medium term. Despite aggressive competition from local and third country producers, U.S. manufacturers continue to dominate the Saudi market. U.S. manufactured products is experiences increasing markets due to the consumer's perception that A/C equipment produced in America is of a better quality than U.S. products manufactured elsewhere. Most promising subsector within the sector, along with estimated 1995 total market size of each subsector (USD millions): OEM parts and components $100-155; A/C compressors $40-45; Chiller A/C $120-180. A. Rank: 11 B. Name of Sector: FRANCHISING C. ITA or PS&D Code: FRA 1993 1994(E) 1995(E) D. Total Market Size 220 238 257 E. Total Local Production 33 36 39 F. Total Exports 0 0 0 G. Total Imports 187 202 218 H. Total Imports from U.S. 154 167 180 I. Exchange Rate 3.75 3.75 3.75 Comments: Although no concrete data is available, US&FCS Saudi Arabia estimates that there is excellent potential for this type of investment, especially for restaurants and fast-food outlets. There is already a large number of U.S. based fast-food restaurants in the country, but the rapid population growth and high regard for American products offer potential for additional franchises and expansion of those already present. Most promising subsectors within the sector, along with estimated 1995 total market size of each subsector (USD millions): Fast-food outlets $125-130. The non-food franchise market in Saudi Arabia is estimated to account for 55 percent to 65 percent of the total franchise market. Non-food growth areas include the following: quick printing, dry cleaning, office temporary services, laundry, and retail and convenience stores. A. Rank: 12 B. Name of Sector: COMPUTER SOFTWARE C. ITA or PS&D Code: CSF 1993 1994(E) 1995(E) D. Total Market Size 340 330 315 E. Total Local Production 0 0 0 F. Total Exports 0 0 0 G. Total Imports 340 330 315 H. Total Imports from U.S. 260 250 245 I. Exchange Rate 3.75 3.75 3.75 Comments: Government industries, companies, and private individuals are upgrading and updating hardware and software. There is especially strong demand for arabized software and packages tailored to the Saudi market. Imports of software core programs and data base programs account for almost 60 per cent of the market. Newly promulgated copyright laws may improve protection for software, making the Kingdom a far more attractive market for U.S. suppliers. Most promising subsectors within the sector, along with estimated 1995 total market size of each subsector (USD millions): Application software $350; Process simulation software $175-200. A. Rank: 13 B. Name of Sector: PUMPS, VALVES AND COMPRESSORS C. ITA or PS&D Code: PVC 1993 1994(E) 1995(E) D. Total Market Size 325 225 240 E. Total Local Production 5 5 5 F. Total Exports n.a. n.a. n.a. G. Total Imports 320 220 235 H. Total Imports from U.S. 165 110 120 I. Exchange Rate 3.75 3.75 3.75 Comments: Imports of pumps, valves, and compressors surged to record levels in the early 1990s due to the Saudi Aramco capacity expansion program (which is currently winding down), and to low inventories in the aftermath of the Gulf war. With the Aramco oil and gas field program nearing completion and a weak oil market, PVC demand is contracting but should rebound somewhat in 1995 and beyond due to major projects in the refinery, petrochemical, and power generation sectors. The U.S.-sourced products are very competitive in high-tech items. The most promising subsectors within the sector, along with estimated 1995 total market size of each subsector (USD millions) are: Pumps, valves, and compressors for refineries and petrochemical plants $120. A. Rank: 14 B. Name of Sector: TEXTILE PRODUCTS: MADE-UP C. ITA or PS&D Code: TXP 1993 1994(E) 1995(E) D. Total Market Size 450 470 500 E. Total Local Production 72 70 80 F. Total Exports 12 10 10 G. Total Imports 390 410 430 H. Total Imports from U.S. 115 122 130 I. Exchange Rate 3.75 3.75 3.75 Comments: The industrial sectors downturn notwithstanding, the continuing strength of the private home construction sector, as well as local custom of redecorating during religious holidays, should produce some increase in market demand for textile products, especially carpeting, curtains, upholstery products and linings. A. Rank: 15 B. Name of Sector: COSMETICS AND TOILETRIES C. ITA or PS&D Code: COS 1993 1994(E) 1995(E) D. Total Market Size 290 310 335 E. Total Local Production 10 10 11 F. Total Exports 7 7 7 G. Total Imports 287 307 331 H. Total Imports from U.S. 46 49 53 I. Exchange Rate 3.75 3.75 3.75 Comments: Saudi Arabia has one of the highest per capita expenditures on perfumes and cosmetics. Cosmetics and perfume stores are a common scene at almost every street corner. Men and women alike wear perfumes and colognes. Many American brands are expected to enter the market over the next couple years. Most promising subsectors within the sector, along with estimated 1995 total market size of each subsector (USD millions): Perfumes $132.5; Cosmetics $70; Health & Beauty aids $100. A. Rank: 16 B. Name of Sector: APPAREL C. ITA or PS&D Code: APP 1993 1994(E) 1995(E) D. Total Market Size 835 870 910 E. Total Local Production 50 52 60 F. Total Exports 15 12 10 G. Total Imports 800 830 860 H. Total Imports from U.S. 64 67 70 I. Exchange Rate 3.75 3.75 3.75 Comments: In spite of the industrial sector's downturn, continuing stability of the Saudi Riyal and high per capita income combine with the local custom of buying new clothing during major religious holidays to generate demand for consumer items such as apparel. In addition, purchases made by the large number of Western expatriate workers in Saudi Arabia, as well as by the 2 million religious pilgrims who visit Saudi Arabia yearly, should create some expansion in the apparel market. A. Rank: 17 B. Name of Sector: WATER RESOURCES EQUIPMENT AND SERVICES C. ITA or PS&D Code: WRE 1993 1994(E) 1995(E) D. Total Market Size 600 640 682 E. Total Local Production 0 0 0 F. Total Exports 0 0 0 G. Total Imports 600 640 682 H. Total Imports from U.S. 120 128 136 I. Exchange Rate 3.75 3.75 3.75 Comments: Irrigation equipment is still a highly lucrative market sector in view of Saudi Arabia's large agricultural sector. Saudi Arabia has the largest desalination volume in the world and is still expanding its capacity. A Bechtel led consortium was awarded a $1.06 billion contract to build phase II of the Shaiba power and desalination project. The project is the largest desalination plant in the world. Most promising subsectors within the sector, along with estimated 1995 total market size of each subsector (USD millions): reverse-osmosis plants $85-90; water pipeline equipment and parts $200. A. Rank: 18 B. Name of Sector: PROCESS CONTROLS: INDUSTRIAL C. ITA or PS&D Code: PCI 1993 1994(E) 1995(E) D. Total Market Size 165 170 180 E. Total Local Production 10 10 10 F. Total Exports 0 0 0 G. Total Imports 155 160 170 H. Total Imports from U.S. 70 75 85 I. Exchange Rate 3.75 3.75 3.75 Comments: Although Saudi Aramco's expansion program is winding down and overall economic growth is depressed, demand for process controls will be buoyed by major new projects in the refining, petrochemical, power generation, and industrial sectors stretching through and beyond the 1995 time frame. New opportunities are also expected for revamping and upgrading process controls in older facilities. U.S. products are considered highly competitive. Most promising subsectors within the sector, along with estimated 1995 total market size of each subsector (USD millions): Petroleum, gas, refining, and petrochemical applications $ 125. A. Rank: 19 B. Name of Sector: FURNITURE C. ITA or PS&D Code: FUR 1993 1994(E) 1995(E) D. Total Market Size 365 380 400 E. Total local Production 40 50 65 F. Total Exports 6 8 10 G. Total Imports 331 338 345 H. Total Import from the U.S. 50 52 55 I. Exchange Rates 3.75 3.75 3.75 Comments: Privatization is being encouraged by the government, and the private sector has good opportunities to maintain and renovate housing complexes and commercial centers. At the beginning of 1994, more than six joint stock companies were established for developing commercial centers and residential complexes. About 4 five star hotels, including Hilton, will be built in the next two years. Many old hotels and residential complexes built during the past 10 years are being renovated. In addition, the young and rapidly growing Saudi population is forming new families, requiring housing and new furniture. Most promising subsectors within the sector: Household Furniture. A. Rank: 20 B. Name of Sector: EDUCATION AND MANPOWER TRAINING SERVICES C. ITA or PS&D Code: EDS 1993 1994(E) 1995(E) D. Total Market Size 615 595 580 E. Total Local Production 0 0 0 F. Total Exports 0 0 0 G. Total Imports 615 595 580 H. Total Imports from U.S. 50 50 50 I. Exchange Rates 3.75 3.75 3.75 Comments: Higher education and manpower training continue to have a high priority for Saudis. Each year, an increasing number of young Saudis enter the job market with a requirement for additional training to complement their education. Training of Saudi's by Americans is mainly conducted in the United States. This training is not included in the value of U.S. manpower training in the Kingdom. Most promising subsectors within the sector, along with estimated 1995 total market size of each subsector (USD millions): Training services in the United States $150-200. A. Rank: 21 B. Name of Sector: HEALTH CARE SERVICES C. ITA or PS&D Code: HCS 1993 1994(E) 1995(E) D. Total Market Size 530 562 595 E. Total Local Production 11 11 12 F. Total Exports 0 0 0 G. Total Imports 297 315 334 H. Total Imports from U.S. 223 236 250 I. Exchange Rate 3.75 3.75 3.75 Comments: The Ministry of Health (MOH) is planning to build about 200 primary health care centers Kingdom-wide. Many MOH hospitals will be tendered for management, operation and maintenance as the performance of some contractors was below standards. Opportunities exist for joint venture firms to tackle this lucrative market. Physicians' services $350 million; Nursing services $216 million; Hospital administration & management $30-35 million. A. Rank: 22 B. Name of Sector: OPERATIONS AND MAINTENANCE SERVICES C. ITA or PS&D Code: OMS 1993 1994(E) 1995(E) D. Total Market Size 4600 4600 4600 E. Total Local Production 920 920 920 F. Total Exports 0 0 0 G. Total Imports 3680 3680 3680 H. Total Imports from U.S. 2300 2300 2300 I. Exchange Rate 3.75 3.75 3.75 Comments: Harsh climatic conditions, limited technical expertise, and industrial expansion create a high demand for O&M services in the Kingdom. Demand is especially high in sectors dependent on high tech hardware and software, in the oil and petrochemical industries, in public utilities and infrastructure agencies, and in the commercial sector, where a construction boom has generated opportunity for suppliers of O&M services. This construction boom has flattened out. Most promising subsectors within the sector, along with estimated 1995 total market size of each subsector (USD millions): Industrial O&M $650-675; Utility O&M $300-400; Oil and gas O&M $800. A. Rank: 23 B. Name of Sector: MEDICAL EQUIPMENT C. ITA or PS&D Code: MED 1993 1994(E) 1995(E) D. Total Market Size 220 228 235 E. Total Local Production 11 13 14 F. Total Exports 0 0 0 G. Total Imports 209 215 221 H. Total Imports from U.S. 125 129 132 I. Exchange Rate 3.75 3.75 3.75 Comments: The King Fahd Medical Center should begin operations within the next year or so; purchases for this new hospital represent a major opportunity for U.S. suppliers of medical equipment. The Saudi Arabian National Guard is also building two additional hospitals. 500 new health care centers as well as new rural hospitals are planned. Replacement market also presents excellent potential as new equipment is launched. Most promising subsectors within the sector, along with estimated 1995 total market size of each subsector (USD millions): Disposables $50-55; Electro-Medical apparatus $150-175. A. Rank: 24 B. Name of Sector: SPORTING AND RECREATION GOODS C. ITA or PS&D Code: SPT 1993 1994(E) 1995(E) D. Total Market Size 72 75 78 E. Total Local Production 3 3 3 F. Total Exports 0 0 0 G. Total Imports 69 72 75 H. Total Imports from U.S. 17 18 19 I. Exchange Rates 3.75 3.75 3.75 Comments: Market demand for sporting goods will increase slightly or even remain stable throughout 1995. The slight increase in imports is expected to occur in the sale of soccer balls and associated gear, boating and diving equipment, as well as equipment for other water sports. There will also be an increase in demand for jogging suits and shoes and some indoor exercise equipment. A. Rank: 25 B. Name of Sector: AIRPORT AND GROUND SUPPORT EQUIPMENT C. ITA or PS&D Code: APG 1993 1994(E) 1995(E) D. Total Market Size 160 150 160 E. Total local Production 0 0 0 F. Total Export 0 0 0 G. Total Imports 160 150 160 H. Total Import from the U.S. 70 65 70 I. Exchange Rate 3.75 3.75 3.75 Comments: Since 1993, Saudi Airlines has reduced its expenditure on airport and ground support equipment, and plans for expansion of Jeddah's International Airport have been postponed, following government budget cuts. However, the necessity to support the new fleet of planes about to be purchased from the U.S. should cause a return to previous funding levels by 1995. If the current economic downturn continues, this sector may decline considerably for lack of government funding, therefore it should no longer be considered a best prospect. AGRICULTURAL BEST PROSPECTS A. Rank: 1 B. Name of Sector: RICE C. ITA or PS&D Code: 0422110 1993 1994(E) 1995(E) D. Total Market Size 293 304 313 E. Total Local Production 0 0 0 F. Total Exports 0 0 0 G. Total Imports 293 304 313 H. Total Imports from U.S. 96 100 105 I. Exchange Rates 3.75 3.75 3.75 Comments: The market for rice in Saudi Arabia is large and continues to grow. The country depends on imports to cover all of its needs for this product. More than 80 percent of Saudis and the majority of expatriates in the Kingdom are thought to eat rice as a major part of their daily diet. There are opportunities to increase U.S. market share, but the market is very competitive. It requires competitive pricing, strong trade servicing and consumer promotion programs. A. Rank: 2 B. Name of Sector: PROCESSED FRUITS AND VEGETABLES C. ITA or PS&D Code: 1993 1994(E) 1995(E) D. Total Market Size 122 126 131 E. Total Local Production 2 3 4 F. Total Exports 0 0 0 G. Total Imports 120 123 127 H. Total Imports from U.S. 27 28 29 I. Exchange Rates 3.75 3.75 3.75 Comments: The demand for processed fruits and vegetables in Saudi Arabia has been substantial due to the presence of a large expatriate population. However, the growth of supermarket food sales is helping to broaden the market among Saudis; and good market growth is expected to continue. Local production is just beginning and may provide a market for fruits and vegetables to be processed, but the small amount of local fruit and vegetable output and the high cost related to importing them for use in local processing suggest that most of the demand will continue to be met by imports. Competition is severe, with regular imports from a large number of European and Asian countries. A. Rank: 3 B. Name of Sector: CORN C. ITA or PS&D Code: 0440000 1993 1994(E) 1995(E) D. Total Market Size 109 114 120 E. Total Local Production 2 3 3 F. Total Exports 0 0 0 G. Total Imports 107 111 117 H. Total Imports from U.S. 88 92 97 I. Exchange Rates 3.75 3.75 3.75 Comments: Livestock and poultry farming are growing steadily in the Kingdom. Several of the Kingdom's poultry producers, by far the major consumers of imported corn, have embarked on major expansion projects which are projected to be completed by the end of 1996. There is a modest amount of locally produced corn, but production costs are high relative to the price of imported corn; so most of the market growth is expected to be filled by imports. The U.S. is the dominant supplier and is expected to benefit the most from increased demand for imports in the next few years. However, occasional quality problems and the entry of China as well as Argentina as low priced suppliers are impediments that could reduce the U.S. market share in this sector. A. Rank: 4 B. Name of Sector: SOYBEAN MEAL C. ITA or PS&D Code: 0813100 1993 1994(E) 1995(E) D. Total Market Size 75 77 85 E. Total Local Production 0 0 0 F. Total Exports 0 0 0 G. Total Imports 75 77 85 H. Total Imports from U.S. 56 58 62 I. Exchange Rates 3.75 3.75 3.75 Comments: Soybean meal is used in both poultry and livestock rations. However, the largest soybean meal users are the poultry producers. The leading poultry producers are expected to increase soybean meal imports by over 100,000 tons by the end of 1996. The major poultry producers import all of their soybean meal requirements from the U.S. due to the superior quality of U.S. soybean meal. A. Rank: 5 B. Name of Sector: SNACK FOODS (EXCLUDING NUTS) C. ITA or PS&D Code: 1993 1994(E) 1995(E) D. Total Market Size 50 52 53 E. Total Local Production 8 8 9 F. Total Exports 0 0 0 G. Total Imports 43 44 44 H. Total Imports from U.S. 13 13 14 I. Exchange Rates 3.75 3.75 3.75 Comments: The last official census concluded that more than 60 percent of the Saudi population is in their teens, and that group is a heavy user of snack foods. Local production is expected to grow rapidly in the next five years. The U.S. has a strong positive image in the market, since U.S. products are associated with quality. However, U.S. products are generally priced at a 10 to 15 percent premium over other products. Products focusing on Saudi trade preferences, which tend to favor sweeter items, generally find better market reception. A. Rank: 6 B. Name of Sector: BREAKFAST CEREALS C. ITA or PS&D Code: 1993 1994(E) 1995(E) D. Total Market Size 26 27 29 E. Total Local Production 1 2 2 F. Total Exports 0 0 0 G. Total Imports 25 26 27 H. Total Imports from U.S. 16 16 16 I. Exchange Rates 3.75 3.75 3.75 Comments: The U.S. is the market leader in this sector. However, breakfast cereals from Europe are very competitive and are making inroads in the market. Promotion and advertising efforts are particularly important to acquaint potential consumers with these non-traditional products in order to gain wider consumer acceptance.