- South Korea seeks to diverse its bilateral relations with Saudi Arabia by strengthening economic cooperation between the two countries, said Song Min-soon, former Foreign Minister and member of Korea's National Assembly during a visit to Saudi Arabia as head of parliamentary delegation. Song said the purpose of the annual visit by Korean parliamentarians to Saudi Arabia was aimed at exploring and strengthening economic cooperation by forging joint venture projects “and not merely buying oil from Saudi Arabia.” He said South Koreans would be interested in forging joint venture projects in areas such as power generation, petrochemical and IT-related industries, he said citing LG-Shaker Co. Ltd., as an example of future economic cooperation between the two countries. LG Electronics, a leading Korean air-conditioning company set up its manufacturing plant, a joint venture with its sole distributor H.G. Ibrahim Shaker and Company in Riyadh. The joint venture project in Riyadh was named LG-Shaker Co. Ltd. and started its operation early this year. The South Korean parliamentary delegation was taken on a tour of LG-Shaker Co. Ltd, which Song referred to as an example of future Saudi-Korean economic cooperation. Located at Al-Taweer Industrial City, south of 2nd Industrial City in Riyadh, the new LG-Shaker factory was built with an investment of SR131 million and is expected to produce around 250,000 air-conditioning units per year. The plant will operate at its full capacity and will reach 500,000 units per year within the next 5 years. LG Electronics owns 49 percent while H.G. Ibrahim Shaker Company and other partners have 51 percent. Song said the Saudi-Korean economic cooperation should be a two-way street and he would like Saudi investors to invest in South Korea. “LG-Shaker Co. Ltd., is just one example of a Korean manufacturing operation in Saudi Arabia. This joint venture partnership can serve as an example of future cooperation between Korean and Saudi businessmen,” he said. Ambassador Lee Jae-gil, said a number of South Korean companies are engaged in Saudi Arabia in areas such as water desalination, petrochemical and power plants. “Very soon we are going to announce a huge multimillion riyal joint venture project to manufacture electric cables in Saudi Arabia,” he said. With the setting up of a electric cable manufacturing unit in Saudi Arabia, the total value of Saudi-Korean joint venture projects will reach around $7 billion by the end of this year, up from $5 billion last year, the envoy said. He said Koreans wanted to set a new paradigm of economic cooperation with Saudi Arabia by encouraging businessmen from both sides to enter into joint venture projects, particularly in areas such as petrochemicals, power generation and the IT sector. M.G. Rhee, Assistant Executive Manager of LG-Shaker Co. Ltd., said the factory will be fully operational by the end of this year. Although there is a constant demand for window AC units, the future of the air-conditioning market in Saudi Arabia will be for wall mounted units. “There has been a growth rate of around 10 percent in the Saudi air-conditioning market with demand for split units ever increasing,” he said. __
