KSA firms claim Saudisation hitting profits
Firms claim that government levy on foreign workers is increasing the costs of production
RELATED ARTICLES: The Labour Drain | Saudisation measures criticised by contractors | Saudi offers projects worth $1 trillion to American investors The Saudi Arabian firm Abdullah AM Al Khodari Sons Co, has revealed that their net profit for the third quarter of the year dropped by 44% to $3.24 million. The firm claimed that the government levy on foreign workers increased their costs of production. This announcement followed a 43% reduction in profits in the second quarter. The country’s government, in an effort to promote employment amongst its citizens, applies a fee of $640 on each foreign worker excess of Saudi nationals in the company. This accounts for a major chunk of the company’s profits, as do other expenses and funding costs as per Al Khodari’s statement. Tadawul reported the company claimed delays in issuance of visas for foreign workers added to labour costs, the effects of which would be found in next year’s operations as well. “Start-up of some manpower intensive projects just weeks after award, the slow issuance of visas, and the pending balance of more than 1,500 visas (difference between number of visas demanded based on government client support letters and those granted based on the Ministry of Labor’s applied formula) related to current projects started prior 2013, has kept the need to hire temporary manpower at exorbitant rates, and further increased the manpower rental by $1.01 million,” added the statement.
