Clean drinking water is among the most prominent natural resources in the world. Its value is dictated by the laws of supply and demand, which are effected by geographic location, economic and social well being. After much research and development the Wilson Corporation has decided to undertake a direct foreign investment in Saudi Arabia. This project will pursue the lucrative opportunities in developing and implementing a desalination plant in Saudi Arabia's Eastern Sea Port of Jubail, which is located next to the Red Sea. The plant will be called Myraj desalination plant and will provide the highest quality bottled drinking water to the Eastern and Central Province's. In order to avoid difficulties in implementing the Myraj project the Wilson Corporation will enter into a joint venture with Aramex Distributing Company. In entering into a joint venture, Wilson Corporation agrees to give up 25% share ownership in the Myraj project.
The decision to enter into a direct foreign investment was made on the basis that the Wilson Corporation wanted to maintain controlling interest over operations, avoid transport costs and trade restrictions. This also allowed for a long-term investment that would acquire fixed assets such as land, equipment and buildings. Labor is also considered to be a key aspect because labor costs are substantially lower than in the United States. This is especially important considering Saudi Law requires that Saudi nationals make up 75% of a foreign company's workforce (U.S. Department of Commerce 5). In the event a shortage of supply of skilled labors occurs, only 5% need be employed. Most importantly, current water supplies are not meeting consumer demands (U.S. Saudi Arabian Business 1). This is crucial because Saudi Arabia consumers have strong buying power and are considered as being a young thriving population with 60 %of its population under the age of 25 (US Bureau 1-2).
