Iktva: the five letters transforming the economic landscape of a nation
The In-Kingdom Total Value Add (iktva) program has been a story of tangible, incremental success and is a cornerstone of Aramco’s strategy.
- Aramco is building a world-class supply chain via iktva
- It aims to create a diverse and globally competitive energy sector
- The seeds are being sown for a thriving local industrial ecosystem
In 2015 Aramco launched a program that would take the lead in localization and spur new opportunities for a youthful and skilled workforce.
The In-Kingdom Total Value Add (iktva) program has been a story of tangible, incremental success, and has become a cornerstone of Aramco’s supply chain strategy.
The stated intent of the iktva program is to localize 70% of the Company’s supply chain’s content by 2021, while raising energy-related exports to 30%, in the process of creating thousands of jobs for young Saudis.
Over the next decade, the projected spend for Aramco is in the region of SR 1.5 trillion.
Fast forward to the present day and the Company has already reached 52% localization, and the results are plain to see:
Between 2015 and 2019, our suppliers doubled their local spend on materials and services, increased their spend on Saudi workforce by 60%, and their training and development of Saudis has increased fourfold.
Closing supply chain gaps
As of late 2019, there are more than 100 iktva action plans being executed, covering multiple services and commodities such as oilfield services, construction, pumps, turbines, and chemicals.
In tandem, the Company is driving local investment through closing supply chain gaps, so far creating over 140 investments opportunities which have attracted more than 460 investments with an estimated capital expenditure of $6.5 billion.
The iktva program has also seen Aramco partner with entities such as the Saudi Industrial Development Fund, the Saudi Arabian General Investment Authority, MODON, the Local Content and Government Procurement Authority, Monsha'at, the General Authority for Statistics, the Export Authority, and the Royal Commission to share best practices and achieve success in localization.
Additionally, Aramco is developing the King Salman Energy Park (SPARK) — an energy industry hub and city that will help Aramco and other major companies in the Kingdom to localize their supply chains and allow for a continued increase in local procurement.
Central to all of this is equipping the workforce with the relevant skills to deliver the new economy.
Thousands of students are undergoing vocational training in 19 academies in 10 cities Kingdom-wide.
Aramco is working with 60 stakeholders to ensure that vocational training keeps pace with industry demands.
Empowering women
The Company has spearheaded the startup of the Leading National Academy, the first female vocational training academy in the Kingdom, a sign of our commitment to empowering women who want to play an active role in the local workforce.
Yet another way that the iktva program is delivering tangible progress within an economic ecosystem created to meet the needs of suppliers and investors.
To showcase the opportunities offered by iktva, Aramco hosts an event that attracts businesses of all types to the Dammam Expo: the event drew together more than 4,000 participants representing 1,000 companies from 40 countries.
Local and international investors also attended a full program of panel discussions, seminars, workshops, and exhibits.
Mohammed A. Al Shammary, Aramco’s vice president of Procurement and Supply Chain Management (P&SCM), says the ultimate goal of the iktva program is to fuel the Saudi economy and equip it for a bright future: “Sourcing Saudi Aramco’s value chain in our own backyard is a strategic move for greater integration and agility, with business benefits that dramatically multiply our contribution to the Kingdom’s long-term prosperity, in addition to being a win for our global suppliers, subject matter experts, manufacturers, and service providers."
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The information in this article is provided for general informational purposes only and it reflects information available at the time of publication. It may be subject to change, and Saudi Aramco does not undertake any obligation to update or revise this content following publication.