A Long Journey with Caterpillar

“Zahid and Caterpillar have worked closely for sixty years to set the highest standards and together are continuing the challenging and rewarding work of building a bright future for Saudi Arabia” said Amr Khashoggi, Corporate Affairs Vice President for Zahid Group.

The Kingdom of Saudi Arabia’s celebration of 80 years since it was founded was a time to reflect on the rich traditions of the desert nation and the long journey of growth to build a modern country. National Day offered citizens the opportunity to rejoice over what has been accomplished in the Kingdom and the colorful splashes of green everywhere demonstrated a special spirit of national pride. It is a time when nostalgia swells the hearts of those who worked a lifetime bringing development while preserving a proud heritage. It is a time when the country’s youth look to the future with optimism and confidence.

The Kingdom has evolved from a collection of far-flung, independent tribes that shared a common nomadic experience, in little more than a single lifetime onto the world stage as a global leader. Saudi Arabia’s advancement owes much to the wisdom of its founder, King Abdul Aziz Al Saud, fondly called Ibn Saud by his countrymen, and the leaders who followed in his footsteps. The rich blessings of natural resources across the desert nation, under the prudent stewardship of generations of managers, have been the engine driving the Kingdom’s phenomenal growth. These assets have combined to afford Saudi Arabia the opportunity to build a secure, prosperous and dynamic society.

The rapid growth and developments in the Kingdom owe much to the economic and strategic partnerships forged in the early years of the nation’s history. Foremost was the special relationship between Saudi Arabia and the United States, which sprang from the quest for energy resources beneath the desert sands. The discovery of oil in 1933 produced the partnership when the American Standard Oil Company was granted an oil concession by King Abdul Aziz Al-Saud. It marked the first of many joint ventures that continue to strengthen the business-to-business ties up to this day.

Early connections

It was not until 1945, however, that the basis for the government-to-government partnership between Washington and Riyadh was formed. As the last campaigns of World War II were raging in Europe and Asia, U.S. President Franklin D. Roosevelt sailed from the historic Yalta conference with Churchill and Stalin to meet King Abdul Aziz Al-Saud, leader of a young, yet strategically important country. Ibn Saud traveled by ship from Jeddah for the meeting on the U.S. Navy cruiser Quincy in the Suez Canal’s Great Bitter Lake. The consultations between President and King laid the foundation for the formal, diplomatic, strategic partnership that has endured and been strengthened across 13 American presidential administrations.

Down the years the commercial and official relationships were sustained and strengthened through the mutuality of interests in the challenges of the Cold War, the search for stability in the Middle East, and the need for security of global energy supplies. New areas for partnerships emerged including cooperation in educational, cultural, scientific, medical, and agricultural sectors as well as expanded areas of the industrial and commercial sectors. Robust business communities have been reaching out to each other and bolstering the economies of both countries by establishing successful partnerships and associations.

The result of this enduring commercial relationship has been a partnership in which the United States is Saudi Arabia’s largest trading partner. Today, bilateral trade exceeds SR112.5 billion ($30 billion). By the end of the year imports from the United States to the Kingdom will top a record SR63.75 billion ($17 billion), that will help American businesses’ recovery in the post-recessionary period.

Teamwork and excellence

When we drill down within the story that is the Saudi-U.S. commercial relationship there are numerous examples that show the shared values – integrity, professionalism, innovation, and a strong ethical code – that have powered the growth and success of the partnership. Among these is the team built between the Saudi company Zahid Tractor & Heavy Machinery and the American company Caterpillar, Incorporated, a multi-generational relationship that serves as a model of the enduring commercial ties that bind the countries’ relations.

Starting in 1950 Zahid, teaming with Caterpillar, the world’s largest manufacturer of construction equipment and diesel engines, has played a key role in Saudi Arabia’s public works development – among the world’s most stunning displays of building a modern, world-class infrastructure. Fielding state-of-the-art methodologies and equipment has contributed greatly to an unprecedented industrial expansion in the Kingdom, essential infrastructure projects, such as airports, ports, dams, bridges, tunnels, railway lines, and road networks.

The Kingdom built a record of world-class projects and improvements carried out by a stable of homegrown Saudi contractors, assisted by premier equipment suppliers and service providers. One achievement in that long list is the King Fahd Causeway, which connects the Saudi Arabian mainland with the island nation of Bahrain. It stands out as a pivotal development, in both economic and political terms, for both countries and the wider Gulf. This spectacular project, financed completely by Saudi Arabia, is a four-lane span, 25 meters wide and 26 kilometers long. This structure was completed in 1986, and has since become the main artery of trade and commerce between the two Kingdoms. The construction of the King Fahd Causeway was a monumental project in its scope and complexity and it required exceptional support. Zahid Tractor provided the expertise and capacity required by the builders for such a project with the high performance machinery of Caterpillar.

“These companies – Zahid and Caterpillar – played a significant role in building the Kingdom’s infrastructure across several generations,” said Amr Khashoggi, Corporate Affairs Vice President for Zahid Group. This team has provided advanced, durable machinery backed by world-class support from an expansive network — 17 branches strategically located across the Kingdom. Khashoggi added, “Zahid and Caterpillar have worked closely for sixty years to set the highest standards and together are continuing the challenging and rewarding work of building a bright future for Saudi Arabia.”

World-class projects

The wisdom of the Kingdom’s leaders over the years and the commitment of firms like the Zahid Group to Saudi Arabia’s development is perhaps best demonstrated by the planning and construction of the industrial cities of Jubail and Yanbu, among the largest such projects ever contemplated. These two cities were conceived as highly efficient environments of modern industrial production. The scale and scope of Jubail was staggering. In July 1982 Time magazine reported the search for historical comparisons to Jubail was daunting, “In all the expansive sweep of civil engineering, from the Pyramids of the Nile to the construction of the Panama Canal, nothing so huge, or costly, as Jubail has ever before been attempted by anyone.” These industrial cities, which formed a foundation for the Kingdom’s economic expansion, were carved out with heavy machinery and reliable power generators provided by Caterpillar.

Progress in the Kingdom, across many sectors, has always been tied to the expansion and modernization of the infrastructure. That has been evident since the earliest days of the Saudi-American partnership. Oil and gas exploration and commercial development, mining, agriculture, power generation, logistics, transportation, and all the other critical pieces that have made possible the advances of Saudi society and its economy, were accomplished through the application of world-class techniques, technologies and construction capabilities.

So as Saudi Arabia continues to celebrate its proud tradition – 80 years as a unified nation – the quest to improve the economic and social life of the Kingdom goes on. A new generation reaches for the future marked by the guidance of the Custodian of the Two Holy Mosques King Abdullah. The Zahid Group’s Khashoggi noted, “Saudis are truly blessed to have such a visionary and energetic King, who has embarked on a mission to transform this country into a modern nation enriched with its valued traditions and cultural beliefs, for the benefit of its people.” He added, “This is vividly demonstrated by Time magazine, in 2007, including King Abdullah among the most important leaders transforming the world and Newsweek, this year, counting him among the top 10 most respected global leaders.”

Vision for the future

Under King Abdullah’s leadership Saudi Arabia is on course to build a series of “Mega-cities” by the year 2020 as special purpose hubs to meet the needs of the Kingdom, in areas such as business and finance, manufacturing, logistics and transport, mining, food, agriculture, and knowledge technology. Among these is the King Abdullah Economic City, growing on the shore of the Red Sea north of Jeddah at Rabigh that promises to become home to two million residents in a city the size of Hong Kong. Its six sectors will include a seaport, an industrial zone, a central business district, an educational zone, a residential sector and a resort zone. These “Mega-cities” are being erected with the intention to diversify and expand the economy, and provide the Kingdom’s citizens with new jobs and an improved quality of life.

The new economic cities in the Kingdom are expected to boost Saudi Arabia’s GDP by SR600 billion ($160 billion) by the year 2020, according to the Saudi Arabian General Investment Authority. They will open job opportunities for 1.3 million people and boost the earning potential for Saudi Arabian citizens.

The same challenges that local and international contractors have met over the decades to help build the Kingdom’s infrastructure, in places like Jubail and Yanbu, are evident in the demands of the “Mega-cities” and other modern projects. These contractors continue to build Saudi Arabia’s future in places across the Kingdom like Hail, Rabigh, Madinah, and Jazan, and they await new projects like those considered for Tabuk in the North West and Al-Jawf in the North East. Such contractors were well served by businesses like the Zahid-Caterpillar partnership.

Together Zahid and Caterpillar have worked to assemble and manage one of the largest heavy machinery dealerships in the world. They provide fully integrated solutions to the Kingdom’s requirements in this new, challenging infrastructure development and expansion environment. Caterpillar continues to see Saudi Arabia as among the largest and most strategically important markets. In his last visit to the Kingdom, Caterpillar Chairman, Dr. Jim Owens said, “It gives me a great sense of pride in Caterpillar’s partnership with Zahid Tractor, a long and lasting association, that has enabled us to be part of the growth and development of this great nation.” Dr. Owens, who serves as an economic advisor to the Obama Administration, commended the Kingdom’s development projects as key components in the Saudi government’s efforts to stimulate the economy.

Growth in Saudi Arabia is not limited to the economic and developmental sectors. King Abdullah has placed great emphasis and investment in educational and cultural progress in the Kingdom. Last year’s opening of advanced higher-education institutions, such as King Abdullah University of Science and Technology (KAUST) north of Jeddah and Princess Noura Bint Abdulrahman University for Women in Riyadh exemplify his vision for the Kingdom’s future. The expansion of the Holy Cities of Makkah and Madinah are testaments to the Kingdom’s efforts to nurture its culture and retain the Islamic ideals that are so indistinguishably intertwined with the nation that is the cradle and center of Islam.

The expansion projects of the Two Holy Mosques will enable Hajj and Umrah pilgrims and visitors of the Holy Cities to perform their rituals in comfort, ease and complete safety. The Holy Mosque in Makkah has the capacity to accommodate two million pilgrims in high season and New roads and bridges are being built to ease movement within these cities.

As with the many modernization and expansion projects underway in the Kingdom, Zahid is working with the main contractors of the Makkah Monorail Project to provide Caterpillar heavy machinery and on-time support. The monorail will connect holy sites within the city and transport pilgrims during the Hajj season. The scale of projects like the Makkah Monorail, their magnitude and scope, not only set new records within the Kingdom, but also are recognized internationally. It is the seamless collaboration and teamwork among Zahid Tractor, Caterpillar and the national and international contractors that consistently achieve excellence in infrastructure projects.

Partners in progress

Zahid Tractor, in its 60-year old partnership with Caterpillar, has provided the Saudi market with reliable and durable heavy machinery and equipment capable of handling the challenging work environment of the rough terrain in the Kingdom. It works to deliver high quality solutions to its valued customers, the contractors who are building the future of the Kingdom. Highly trained, professional technicians and engineers who are committed to the pursuit of excellence staff the company’s facilities. The company prides itself in attracting exceptionally talented men and women from the Kingdom and around the world for its workforce.

Saudi Arabia has a population of 28 million with the majority under the age of 25 years, which means the Kingdom must place great emphasis on the development of young people. To match these concerns Zahid works to tap the potential of Saudi youth through training programs like the Learning Center of Excellence it established. “The Center was built to develop and hone the skills and abilities of our Saudi youth,” explains Khashoggi. “The company also participates in forums focusing on mentorship, education, special needs and female empowerment, encouraging increased access into our workforce.” He added, “Today, over 42% of our workforce is made up of Saudi nationals. The award of the Best Work Environment in Saudi Arabia title demonstrates that Zahid provides a nurturing atmosphere, conducive to good working practices, job satisfaction and safety.”

This year the citizens of Saudi Arabia proudly hail the traditions that form the strong foundations of society and the historic march to build a modern country. Along the path Saudi businesses and their partners, like Zahid Tractor and Caterpillar, have made significant contributions to what has been achieved. The energy and foresight they bring to tackling the future challenges of the Kingdom, under the direction of Saudi Arabia’s wise leadership will ensure a bright future for the generations to come.

For more information on Zahid Group, visit www.zahid.com.