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In Kingdom Total Value Add (IKTVA) program is created to steer domestic value creation and maximize long-term economic growth and diversification to support a rapidly changing economic environment. It is a vital program for Saudi Aramco to create value in every aspect of the business, maximizing long-term economic growth and diversification.
IKTVA recognizes the prioritization of domestic value creation. IKTVA created to steer increased investment, economic diversification, job creation, and workforce development within Saudi Arabia. By 2021, Saudi Aramco aims to achieve 70% localization of all spending, creating a business environment that will provide thousands of new jobs, and enable 30% export of Saudi energy sector products.
Why is the IKTVA program imperative?
- Competitive Cost
How is IKTVA calculated?
- Localized goods and services
- Salaries paid to Saudis
- Training and development of Saudis
- Supplier development spending
- Research & Development
- Export Revenue Factor (%)
- Company revenue
%IKTVA = [(L+S+T+D+r)/E]+X
Who will benefit from IKTVA?
The benefits of a self-sustainable economy are widespread and long-term those are:-
- Quality jobs for citizens of Saudi Arabia,
- Innovation and diversification of industry, and
- Improved global competitiveness.
In addition to the direct benefits, suppliers will gain access to a higher-skilled Saudi workforce and will be recognized as prioritizing value creation which can lead to increased opportunity for expansion into markets across the Kingdom and beyond.
How can IKTVA benefit businesses?
IKTVA recognizes the prioritization of value creation. Increasing the IKTVA score has the potential to:-
- Increased chances of business with Saudi Aramco and others in Saudi Arabia,
- Drives toward developing a local cost-effective workforce, and
- Making goods and services more competitive locally, regionally, and globally.
This program has the potential to help companies develop new products, services, and technologies through partnerships in and outside of the Kingdom. All of which will lead to greater business performance and a more diversified economy.