Petro Rabigh: supply chain transformation in Saudi Arabia
(Norwich, UK, 07/12/2018)
In a country driven by change amidst the incoming Saudi Vision 2030, Michael Gustafson, General Manager of Material, Procurement and Contracts discusses the procurement strategies Petro Rabigh are utilising in this exciting new era for the Kingdom.
“We’ve almost finished Phase II to expand our business. It’s like you’re running on a treadmill and the speed is set at a six-minute mile but you're used to running an eight-minute mile,” he explains. “People think of procurement as being some sleepy, back office support group. But, it’s not. You're actually on the front line and if this spare part, chemical additive, or catalyst doesn't arrive on time, you could shut down a facility.”
With the company investing almost $400mn annually on its supply chain activities, Gustafson is well aware just how big Petro Rabigh’s supply chain is.
“The magnitude of it is that it spans to over 2,000 suppliers worldwide that are split evenly between America, Asia and Europe,” says Gustafson. “Of those, we have around 1,200 really active, highly consumable suppliers. They deal with everything from highly dangerous explosive and chemical additives, all the way to papers and pens. We cover the full spectrum.”
In a bid to reduce Saudi Arabia’s reliance on oil and diversify its economy, the Crown Prince Mohammad bin Salman announced plans in 2016 to launch Saudi Vision 2030. With around 80 projects expected to be completed in Saudi Arabia by 2030, Gustafson believes it’s an interesting time to be involved in such a historic process.
“These are exciting times for Saudi Arabia. When I tell my friends about it back home in America, I feel like I've got a front row seat,” explains Gustafson. “It's a major transformation in the Kingdom and these are fabulously exciting times. There are things going on in Saudi Arabia that are truly historical.”
You can read more about Petro Rabigh’s journey in the magazine.