South Africa and Saudi Arabia have set up a joint holding company to enhance business opportunities and investment between the two countries, officials announced in Cape Town on Monday.
Trade and Industry Minister Rob Davies said the establishment of the holding company - Saudi Arabian South Africa Holding (Sasah) - had the potential to create R20-billion worth of business opportunities in the two countries.
Sasah comprises different business sectors, including real estate, health services, agriculture, trading, technical services, automotive industries, mining and minerals, construction, power construction, petro-chemicals downstream and engineering.
It falls in line with South Africa's strategy of "seeking out new sources of investment and trade with dynamic economies", Davies said, noting that both countries had the biggest economies in their respective regions.
He said Saudi Arabia was a "dynamic economy", but that South Africa also had plenty to offer. "The African continent is the new great frontier, and SA has a pivotal role to play."
The idea for a holding company was first proposed by Saudi Arabia South Africa Business Council co-chairs Iqbal Surve and Said Al Qahtani.
Sasah was formally endorsed by Saudi rince Faizal bin Saud Arabia in April, and has already secured R20-million to carry out feasibility studies for investments, particularly in agriculture, mining, mineral processing and petrochemicals.
Davies said many of the Gulf nations were looking to make investments in agriculture in Africa to ensure food security for their own population.
Saudi Arabia was also looking for South African expertise and technology in mining and other sectors, as a mining boom was expected in the northwest of Saudi Arabia.
Earlier this year, at the fourth session of the South Africa-Saudi Arabia Joint Economic Commission, the two countries agreed to increase their total trade to a targeted R60-billion within the next five years.
Davies said the current total trade between the two countries stood at R34-billion in 2011. This represented an annual growth rate of about 32.6% in just one year.
Surve said that "very large Saudi Arabian companies have indicated their willingness to participate. We're expecting significant investment running into tens of billions of rands over the next few years."
The Sasah and Saudi Arabia South Africa Business Council consortium will be open to all legally registered and financially sound business entities in both countries.