To understand the Marafiq of today, one has to go back to where it all started. The company and its employees are proud of its heritage. Marafiq's foundations were laid in the 1970s when the government established the Royal Commission to develop the two industrial cities of Jubail and Yanbu. The objective was to diversify the national economy and reduce the Kingdom's reliance on its oil revenue by providing the requisite infrastructure and facilities for the establishment of primary, secondary and support industries.

Today the two industrial cities are symbols of the Kingdom’s unprecedented growth in the industrial sector. It is also a reflection of the confidence of foreign investors in the industrial capabilities of the country. Several successful joint ventures between Saudi and international companies such as Chevron, Mitsubishi, Shell and Mobil are located in the two industrial cities. A recent international survey named Jubail as the city with the best economic potential in the Middle East.

It was His Highness Prince Abdullah Bin Faisal Bin Turki, President of the two industrial cities at the time and former Governor of the Saudi Arabian General Investment Authority, who first came up with the idea to privatise the utility services in the two cities. Driven by the national economic development programme, his idea eventually led to the formation of Marafiq as a private enterprise.

The vision of privatisation was embraced and supported by His Highness Prince Saud Bin Abdullah Bin Thunnayan Al-Saud, Chairman of Marafiq and President of the Royal Commission. He started to look at ways and means to implement a privatisation plan, while ensuring continuation of utility services to current and future customers at competitive prices. His vision of the way forward was to benefit from international experience, based on international best practice, starting off where others have left. Under his guidance it was decided to call in the help and advice of a number of highly reputable international consultants to help tackle the company’s establishment in an orderly, proper and structured manner.

The groundwork for the establishment of a private utility company progressed through several challenging pioneer stages, calling for sound team work between the international consultants and Saudi officials, and essentially setting up a new company from scratch. Due to the diversity and complexity of the task at hand, no consultant could implement the process single-handedly. It had to be carried out by more than one to ensure collective expertise in the legal, technical, financial, regulatory, management, commercial, information technology and human resources fields. A consortium of consultants was appointed to work side by side with the Marafiq management to develop the new company.

The consortium's task was to set up the structure and organisation of the new company, do a technical assessment of the facilities, asses the assets and their value, attract the required human resources, transfer employees from government structures to Marafiq, and transfer existing contracts. Numerous successful international utility companies were studied. The best international practices were adopted and tailored to the Kingdom's unique circumstances and needs. The multinational consortium and the Saudi team laid the right foundation for a world-class commercial utility. This ensured continuation of services and also served as a catalyst for privatisation in Saudi Arabia. This solid start has generated confidence in Marafiq and is an assurance to the investor and banking communities.

The daunting task of forming a new company was completed within two years. On the first of January 2003, Marafiq gave its first steps as a fully operational and private integrated power and water utility company.

The company regards itself as privileged to have credible owners who are amongst the most highly respected institutions in the Kingdom. Its four major shareholders, each owning 24.81 percent of Marafiq, are the Royal Commission for Jubail and Yanbu, Saudi Aramco, Saudi Basic Industries Corporation, and the Public Investment Fund. Seven other private companies together hold 0.76 percent.

The Board of Directors is constituted of the Chairman and eight members. The four major shareholders – the Royal Commission, Aramco, Sabic and the Public Investment Fund – have two representatives each on the Board. The seven additional shareholders are represented collectively by the ninth member.

Marafiq's core business is the operation, maintenance, management, expansion and construction of power and water systems to provide essential utility services to industrial, commercial and residential customers in the industrial cities of Jubail and Yanbu.

The utility services comprise four major types of operation:
· Seawater cooling systems for the heavy industries in Jubail and Yanbu
· Desalinated and treated water systems and potable water production
· Sanitary and industrial wastewater treatment and disposal
· Electric power generation, transmission and distribution

Marafiq's utility plants in Jubail comprise 12 kilometres of canals delivering filtered seawater to the industries for their cooling operations, two desalination plants producing potable water for household use, and a sanitary and industrial wastewater treatment plant.

In Yanbu, the seawater cooling, desalination, wastewater treatment and power generation, transmission and distribution plant constitutes an integrated power and water utility system which is regarded as one of the largest utility complaxes of its kind in the world.

Marafiq has a customer-focused vision. The company is committed to performance and operational excellence to exceed its customers' needs and expectations. Their satisfaction is Marafiq's success, and their continued success is Marafiq's satisfaction. Supported by its employees and all its systems, the entire company is structured around one common goal – to make sure that it satisfies its customers' needs, support them, add value for them, and help them to succeed.

At the outset Marafiq's first main objective has been to anchor the company, enhance its operations, and add value for our stakeholders. It is now ready to grow and develop, to expand beyond water and power and cement its position as a major player in the utility market. Continuing its focus on adding value for its stakeholders, the company is preparing itself to be highly competitive and to venture into new, related businesses. It is developing its people's leadership and technical skills, and combining the development of its processes, performance, resources and knowledge through assessment and alignment. Performance enhancement and assessment systems are being put in place to ensure full utilization of resources and reduce redundancies, and it is focusing on asset management and process management of its core functions.

The executive management team is fully aware of Marafiq’s daunting task once the new industrial developments of Jubail II and Yanbu II come on stream. They realise what pivotal role the company will play as this new venture opens up vast new avenues to Marafiq. The two cities are set to grow at a rapid pace. As the nearest and most viable provider of utility services, Marafiq plans to provide integrated services common to all customers in a plug-and-play concept designed to reduce their capital cost. In addition to power and water, Marafiq intends to provide other essentials such as steam, air and gas as a central utility service. The company may even offer other central services such as financial, human resources, materials and communication services to help customers reduce their overheads.

To meet the projected increase in demand for power and water in the two new industrial cities, Marafiq is developing two independent water and power plants (IWPPs) in Jubail and Yanbu. The status of the IWPP in Jubail is to be upgraded from a local initiative tailored to meet the specific demand for power and water in Jubail Industrial City to one of national importance. The project’s upgrading will result in a significant increase in desalinated water output from the originally planned 300,000 to 700,000 cubic meters per day. Power output will be increased from 2,400 to 2,500 megawatts. The additional 500,000 cubic meters of water will be made available to residents in Dammam, Al-Khobar and other parts of the Eastern Province, hence taking Marafiq’s operation beyond Jubail and Yanbu.

The project is has reached the bidding stage and soon it will move frfom the drawing board to implementation stage.

Marafiq also intends to increase its power generation and water production capacities in Yanbu. A pre-feasibility study has been carried out on the technical, financial, environmental and economic aspects of the project. These include the demand-supply forecast within Yanbu Industrial City, the availability of fuel, and specific site conditions. The preliminary results show that building approximately 1500 megawatts of new power generation is likely to be feasible by late 2009 or early 2010 to meet the growing power requirement in Yanbu. The shortfall of potable and process water in Yanbu during the same period is likely to be 34,000 cubic meters per day. To optimize the water production capability of the IWPP, surplus water will be made available to users outside the industrial city.

The pre-feasibility study will be followed by a more extensive study and preparation of functional specifications. Marafiq intends to seek expressions of interest from international and Saudi Arabian investors and developers early in 2006. A Request for Proposal for the development of the project on a BOT (Build Operate Transfer) basis is expected to be issued this year.

As the first company in the Gulf to employ one of the world's leading enterprise resource planning systems, mySAP.com, as well as mySAP Customer Care System, Marafiq's management and its customer service department are well equipped to monitor all aspects of the business and to increase response levels to customer needs.

The high ambition and its dynamic mission never led the company to ignore its professional and national commitment. Quality and environment protection have always been high on its agenda. This commitment eventually bore the fruit in form of the coveted ISO 9001:2000 and ISO 14001:1996 certificates in recognition of its compliance with the stringent quality and environmental management standards of the International Organization for Standardization (ISO). Two teams of external auditors from the Geneva-based certification company, Société Générale de Surveillance (SGS), declared Marafiq as ISO 14001 and ISO 9001 certified after an exhaustive audit of the company's environmental and quality practices, procedures and standards. The auditors' decision to award the certificates to Marafiq was unanimous.

Such laurels and achievements are reflective of a consistent drive to meet challenges and achieve excellence. One of the biggest challenges for Marafiq has been to mould itself into a perfect and genuine private company. The logical culmination of this challenge would be putting its majority share on the stock market. The company has already started its move for IPOs in a planned manner and once the IPOs hit the stock market, the company will have a mission well accomplished.