Locally made generators face export obstacles

Call to lift customs tariffs imposed by Saudi authorities, and facilitate GCC market access

Manufacturers of electric generators are calling for easy access to Gulf market via Saudi Arabia, considered the gateway to the GCC market. Saudi authorities have been levying customs tariffs on imports of locally-made generators since October last year.

“Saudi Arabia is the gateway to all GCC markets,” said Ghantous Nakad, CEO of Sakr Power Generators. He said Saudi Arabia is charging a five percent fee on small generators and 12 percent on large generators.

According to the Greater Arab Free Trade Agreement (GAFTA), industrial exports from Arab countries are fully exempt from customs duties as long as 40 percent of the product is manufactured in the Arab country of origin.

Local manufacturers of generators import engines and alternators from abroad. They produce cables and other parts and assemble the generators locally. “The customs fees are reducing our ability to compete in those markets,” said Nakad.

A committee of manufacturers of electric generators will study the production cycle to verify that at least 40 percent of electric generators are manufactured locally.

Reported by Rania Ghanem