GLOBAL SUPPLY CHAIN JANUARY 2020 ISSUE by GLOBAL SUPPLY CHAIN

January 2020 Issue 66

ENHANCING THE BUSINESS OF LOGISTICS

GCC

ENERGY SECTOR Where volatility and resilience dovetail

NAFL Commemoration

31st GAM in luxurious ambience

DP World

Full steam ahead

LogiPoint

Making the point

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                                                                  ’                            



Vicissitudes, vulnerability and volatility in energy SIGNATURE MEDIA FZ LLE P. O. Box 49784, Dubai, UAE Tel: 04 3795678 Email: info@signaturemediame.com Exclusive Sales Agent Signature Media LLC P.O. Box 49784, Dubai, UAE Publisher: Jason Verhoven jason@signaturemediame.com Editor: Malcolm Dias malcolm@signaturemediame.com Art Director: Johnson Machado johnson@signaturemediame.com Production Manager: Roy Varghese roy@signaturemediame.com

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Contributor’s opinions do not necessarily reflect those of the publisher or editor and while every precaution has been taken to ensure that the information contained in this handbook is accurate and timely, no liability is accepted by them for errors or omissions, however caused. Articles and information contained in this publication are the copyright of Signature Media FZ LLE & SIGNATURE MEDIA LLC and cannot be reproduced in any form without written permission.

Happy New Year 2020! We wish our readers the very best in store for this year. Talking of fortunes, there are few industry verticals that are as unpredictable and susceptible to global and regional geo-political developments as the oil and gas sector. Oil and to a lesser extent—the gas price movements are sensitive to a host of factors including levels of production; prices of benchmark crudes on the spot and futures markets; political stability; embargoes and policies of oil cartels such as the 13-member OPEC which controls roughly 45% of global oil production and over 80% of the world’s proven oil reserves. We begin 2020 with an overview of the GCC Energy sector in this January edition. The region after all is the nucleus of the international oil and gas industry. The industry is central to each of the six GCC states. Its economies and fortunes are largely governed and determined by the fate of the energy industry. Elsewhere, we engage one-on-one with Mohammed Al Muallem, CEO & Managing Director, DP World, UAE Region, for his take on the international ports behemoth’s stellar performance in 2019, the many accomplishments and its navigation amid challenges and choppiness in the future. Saudi Arabia has been in the forefront of the regional logistics and supply chain landscape with its professed aspirations for an enhanced role and domination of the logistics landscape with its grand ambitions as reflected in the Crown Prince’s lofty ‘Saudi Vision 2030’. We review the high ranking of the country and its leap across 72 points (World Bank rankings) to become a logistics powerhouse in the region. Staying with the Kingdom, we feature LogiPoint, now a force to reckon with and its ascent over the past few years as it makes its mark in the nation’s logistics setting. On another happy note, we were witness to the 31st Annual NAFL General Assembly Meeting and celebrations held on board the stately Queen Elizabeth 2 moored at Dubai’s Port Rashid. Read on for a report. Our regular contributor and Global Supply Chain veteran Tom Craig, offers his unique insights into what 2020 has in store for the logistics and supply chain across the world with his Craigesque 25 distinctive predictions.

Happy reading! Malcolm Dias

Editor malcolm@signaturemediame.com

JANUARY 2020 3

January 2020 Issue 66 September 2019 Issue 62

ENHANCING THE BUSINESS OF LOGISTICS

06 NEWS 20 GCC Energy Outlook 2020 We survey the regional oil

and gas sector in this energy-rich centre of the world. 26 2020

Predictions for the logistics and supply chain industry Logistics guru Tom Craig issues

forth 25 predictions in his own inimitable style. 28 LogiSYM

-2020Dubai

LogiSYM 2020 returns to Dubai in

June with an exciting agenda. 30 NAFL

General Assembly Meeting NAFL commemorated its 31st

Anniversary in style on board the majestic Queen Elizabeth 2. 4 JANUARY 2020

46 LogiPoint

LogiPoint has been making waves in Saudi

34 DP

World Group

Mohammed Al Muallem, CEO

& Managing Director, DP World, UAE Region, chronicles the accomplishments at the conglomerate. 40 Frost

& Sullivan ME Best Practices Awards Frost & Sullivan presented its ME

Awards at a glittering ceremony at the Atlantis, The Palm. 44 World

Future Energy Summit 2020 We preview the pointers and

indicators at WFES 2020.

Arabiaâ&#x20AC;&#x2122;s logistics and supply chain industry with its many accomplishments. 50 Abu

Dhabi Ports

It has been a fruitful year for Abu

Dhabi Ports in 2019. 54 Saudi

Arabian Logistics The new Saudi Arabian Logistics

entity from Saudia Airlines has its work cut out for it. 58 Prof.

Omera Khan

A recent roundtable in Germany examines the problem of cargo theft and pilferage.

You wouldn’t accept price uncertainty in a restaurant. So why do it in shipping? Introducing Maersk Spot – our simplified booking tool to improve the efficiency and predictability in your supply chain. With Maersk Spot, you get Loading guarantee

Fixed price

Compensation if in a rare case rolled

DP World awarded 30-year concession at Jeddah Islamic Port n DP World has been awarded a 30-year Build-Operate-Transfer (BOT) concession by the Saudi Ports Authority (Mawani), for the management and development of the Jeddah South Container Terminal at the multi-purpose Jeddah Islamic Port, the global trade enabler revealed in a press communiqué. Under the agreement, DP World will invest up to US$ 500mn to improve and modernise the Jeddah Islamic Port, including major infrastructure development to enable the Port to serve the ultra-large container carriers (ULCCs), which are considered the world’s largest mega containerships. Established in 1976, the Jeddah Islamic Port located on the western Red Sea coast is the largest port in the Kingdom of Saudi Arabia with annual volumes of over 6 million TEUs. As a crucial link on the world’s busy east-west trade route and the Kingdom’s main commercial centres, the Port currently handles approximately 60% of the country’s sea-imports and is a strategic hub that connects East-West cargo. Developing Jeddah Islamic Port will contribute to achieving Saudi Vision 2030 as the project is considered a key milestone towards achieving the targets of ‘The National National Industrial Development and Logistics Vision Realization Programme’, one of the Vision’s major initiatives. The concession will also be instrumental in facilitating the smooth and efficient movement of cargo and greater access to local and international markets. DP World has operated the South Container Terminal on a lease agreement for more than 20 years. The concession will also be instrumental in facilitating the smooth and efficient movement of cargo and greater access to local and international markets. DP World has operated the South Container Terminal on a lease agreement for more than 20 years. As the main trade destination for Saudi Arabia and one of the Kingdom’s major port privatisation projects, the new terminal will also

DP World recently inked a long term deal with Saudi’s Jeddah Islamic Port. have an upgraded capacity of 3.6mn TEU up from 2.4mn TEU, to meet the expected growth demands of the future, and will provide 1,400 jobs. DP World has committed to investing significantly to modernise the Jeddah South Container terminal, which will not only result in greater direct and indirect job creation but also deliver best-in-class efficiency and productivity to the Port’s operations,”affirmed Sultan Ahmed Bin Sulayem, DP World Group Chairman and CEO. DP World Group Chairman and CEO held a recent signing ceremony of the BOT Concession at the Jeddah Islamic Port. In attendance were dignitaries and high-level officials including Makkah Acting Governor, HRH Prince Badr Bin Sultan Bin Abdul Aziz Al Saud; HE Engineer Saleh Bin Naser Al Jasser, Saudi Minister of Transport and Mawani’s Chairman of the Board; HE Bandar Alkhorayef; Minister of Industry and Mineral Resources, HE Saad Al Khalb, President of Mawani and HE Sheikh Shakbout Bin Nahyan Al Nahyan, UAE Ambassador to Saudi Arabia.

Tristar adds LNG tanker to its fleet

n The Tristar Group has announced the

recent delivery of the Liquefied Natural Gas (LNG) Tanker, Tristar Ruby, to its shipping fleet. Formerly known as the British Ruby, the tanker will be the first LNG vessel to be added to the Tristar fleet of 30 ocean-going tankers. The Tristar Ruby will be on long-term time charter with BP Shipping. The vessel was built by Hyundai Heavy Industries in 2008 and has a cargo carriage capacity of 155,000 cubic metres. She has been chartered by BP Shipping since delivery and trades worldwide. She will be technically managed by Wilhelmsen

6 JANUARY 2020

Ship Management and commercially operated by Tristar. “We are excited with this new opportunity to expand our presence into LNG shipping and look forward to strengthening and growing this new relationship with BP with a strong commitment to safety in operations and high standards of service and excellence,” remarked Eugene Mayne, Group CEO, Tristar. Tristar is a global integrated energy logistics business, head-quartered in Dubai, which offers end to end fuel logistics solutions to blue-chip clients including international and national oil companies and international NGOs.

Fujairah Terminals in expansion mode; empowered with sophisticated cranes

Etihad Rail awards US$ 1.25bn contract for East Coast ports rail linkage to Chinese Consortium n HE Sheikh Theyab Bin

Advanced ZMPC Cranes at Fujairah Terminals.

n Fujairah Terminals, wholly owned by Abu Dhabi Ports,

recently announced the arrival of two new quay cranes at Fujairah Port as part of its extensive expansion plans. The brand new advanced Post Panamax ship-to-shore cranes, which are among the biggest currently available from manufacturers, were purchased from ZMPC China. The arrival of Quay Cranes will significantly increase handling capability and improve operations As part of the ongoing AED 1bn (US$ 273mn) expansion programme currently undertaken by Abu Dhabi Ports, the arrival of the quay cranes will provide the capability to handle close to an additional 500,000 TEUs (twenty-foot equivalent units). Boasting an enhanced propulsion speed during the movement of containers between ship and quayside, the new cranes will heighten productivity, speed up the turnaround of vessels, and increase safety. To reach maximum efficiency in the operation of the new cranes, Fujairah Terminals seconded two UAE national graduates to China to undergo a technical training programme at ZPMC’s facility. Additional elements of the ongoing expansion mode include a capacity increase to 1.5 million TEU, a general cargo handling increase to 1.3mn tonnes, 18m draft, a larger quayside, and the ability to accommodate bigger vessels. “This ambitious expansion plan underscores our commitment to continuing development of a world-class infrastructure capable of facilitating global trade and logistics and will contribute to the UAE’s economic growth,” affirmed AbdulAziz Al Balooshi, Acting CEO, Fujairah Terminals. Fujairah Port is a multi-purpose port capable of handling general cargo, containers, RoRo and cruise ships, offering excellent connectivity to India, Africa, and Asia.

Mohamed Bin Zayed Al Nahyan, Member of the Abu Dhabi Executive Council, Chairman of Abu Dhabi Crown Prince’s Court and Chairman of Etihad Rail, recently supervised a board meeting during which he approved a AED 4.6bn (US$ 1.25bn) tender for the civil works and construction of Package D of Stage Two of the UAE’s national railway. Package D will link the ports of Fujairah and Khorfakkan to the network at the Dubai border with Sharjah, and stretches over a distance of 145km. Through connecting key ports to manufacturing, production and population centres, Package D will connect to quarries for building material in the Northern Emirates, contributing to the improvement of the transport and infrastructure industries in the UAE. Etihad Rail awarded the contract of Package D to a joint venture of the China Railway Construction Corporation, CRCC, and National Projects and Construction, NPC, a UAE company specializing in construction and engineering. The agreement signing ceremony was attended by HE Sheikh Theyab Al Nahyan and Wenzhong Wang, Vice President, China Railway Construction Corporation. The agreement was signed by Shadi Malak, Chief Executive Officer, Etihad Rail and Zhao Dianlong, the representative of CRCC and Hamad Al Amri, Managing Director, NPC. “While expanding a vital sector that constitutes the lifeline of our national economy, we continue

The signing ceremony for EtihadRail’s Package D. to provide a safe, modern, and sustainable national railway network that meets the aspirations and expectations of our nation,” remarked Sheikh Theyab. The 145-kilometer Package D includes the construction of 15 tunnels through the Hajar Mountains with a total length of 16 kilometres, in addition to the construction of 35 bridges and 32 underpasses. Linking the ports of Fujairah and Khorfakkan to the railway network, will allow the transportation of up to two million TEU’s (twenty-foot equivalent container units) per year, thus promoting international trade. In addition, Etihad Rail trains will carry up to 30mn tons of construction material annually to distribution centres in Abu Dhabi and Dubai, cutting the overall cost of transport and reducing on-road truck trips by more than 2,000 journeys per day. This comes as part of the company’s mandate to establish a 1,200 km national railway network, which will also form an integral part of the proposed GCC Railway. JANUARY 2020 7

SOHAR signs second plot lease agreement with Matrix Prime Logistics n SOHAR Port and Freezone recently

signed an agreement with Matrix Prime Logistics for the development of Phase 2 of the warehousing project, which commenced its operations in 2018. The agreement was signed between Omar Mahmood Al Mahrizi, CEO, representing SOHAR Freezone and Dawood Al Rajhi and Dr. Sahib Jasim, partners at Matrix Prime Logistics. Phase 1 of Matrix Prime Logistics (FZC) saw an investment of over US$ 1.7 million, offering customised warehousing solutions for different commercial, logistics and industrial activities. The smart designs of the warehouses allow tenants to select respective sizes and shapes that best suit their business needs. All warehouses have been designed and built to accommodate business flexibility and operational efficiency. In addition, Matrix Prime Logistics also provides services to accommodate a wide range of business requirements, including general trading imports, exports and re-export, warehousing, logistics, light manufacturing,

SOHAR and Matrix officials at the logistics deal signing ceremony. spare parts warehousing and much more. “The availability of modern warehouses in the Freezone has contributed significantly in facilitating the logistics movement of goods between the port and the free zone, and this is an important factor for increasing the volume of goods coming to the port and thus to the

Sultanate,” commented Al Mahrizi. “The second phase of our project is scheduled to have a construction duration of 100 days with an investment value of over US$ 1.2 million. We have already begun marketing the new facilities and there is a high demand from clients to reserve their space,” noted Sahib Jasim.

P&O Maritime Logistics makes its debut n P&O Maritime Logistics (POML), a Dubai-based marine solutions and logistics company, has been formed following DP World’s recent acquisition of Topaz Energy and Marine and its integration with P&O Maritime. Through the synergies created by the merger of the two companies, under the DP World umbrella, the POML business is well positioned to grow and build further scale and value for customers and shareholders alike, the company revealed n a press statement. Offering a distinctive value proposition to customers, POML will focus on three strategic segments–Offshore, Port Services and Logistics, delivering world-class capabilities across industries, with safety and the environment at the forefront. A core focus for POML’s will be the further optimisation of offshore logistics for energy companies. With the company’s very robust 8 JANUARY 2020

Rene Kofod-Olsen, Head, P&O Maritime Logistics. track record, global clients, diverse assets and knowledge of its customers’ operations, POML is uniquely positioned to continue disrupting this part of the supply chain. The company will be led by René Kofod-

Olsen, former Topaz Energy and Marine CEO. “P&O Maritime Logistics is strategically positioned to provide a wide portfolio of services to our customers, be it within one segment such as offshore or port services, or an integrated logistics offering with a combination of services,”affirmed KofodOlsen. “We look forward to seeing the company develop through its next phase of growth under René’s leadership,”commented Sultan Ahmed Bin Sulayem, Chairman and CEO, DP World. Kofod-Olsen has appointed an Executive Committee consisting of Martin Helweg, Chief Operating Officer; Robert Desai, Chief Commercial Officer; Prasad Narayan, Chief Financial Officer; and Latifa Mohammad, Chief Human Resources Officer, to support him in managing the day-to-day operations of POML’s business.

Bahri signs agreement for transport of desalinated water n Saudi Arabia’s Bahri has signed a 20-year agreement, valued at SAR 760 million (US$ 203mn) with Saline Water Conversion Corporation (SWCC), a Saudi Government Corporation responsible for the desalination of seawater, producing electric power, and supplying various regions in the Kingdom with desalinated water, to transport desalinated water from the floating stations to desalination tanks. The agreement includes establishing three floating stations to desalinate water and the transfer of desalinated water from the stations to desalination tanks. Each station will have a capacity of 50,000 cubic meters per day with a total capacity of 150,000 cubic meters a day.

A section of the winners of the awards instituted by Abu Dhabi Airports at the annual celebration ceremony.

Abu Dhabi Airports awards top industry partners at annual celebration ceremony n Abu Dhabi Airports recently held a special ceremony to

Bahri and SWCC officials exchange documents following the agreement. The project will be operational for 20 years, starting from the date of commercial operation, which is expected to be in the fourth quarter of 2020. “With this agreement, we aim to support our partner to meet rising demand for water and electricity, thereby serving the needs of businesses and communities in the Kingdom,” remarked Abdullah Aldubaikhi, CEO, Bahri. The new contract follows an agreement signed between Bahri and Saline Water Conversion Corporation earlier this year that sets a fixed price on a five-year term for the shipment of spare parts needed at desalination plants in the Kingdom’s Eastern and Western coasts. The company owns a fleet of 89 vessels and is the world’s largest owner and operator of Very Large Crude Carriers (VLCCs) as well as the largest owner and operator of chemical tankers in the Middle East.

recognize the contributions made by its local and international stakeholders at the Ritz Carlton Abu Dhabi. Abu Dhabi Airports operates with an extensive range of stakeholders which supports a range of passenger and cargo services year-round, alongside free zone operations and training opportunities. More than 80 stakeholders attended the ceremony, where 26 awards were presented to stakeholders throughout the night, from different sectors including airline companies, government entities and additional organizations. Amongst the list of winners were significant industry organizations, whether airlines or support services which operate in partnership with Abu Dhabi Airports. Biman Bangladesh Airlines won the Best Airline in Passenger Load Factor, while Oman Air won the Best Airline in On Time Performance – Departure, and Kuwait Airways won the Best Airline in On Time Performance – Arrival. Etihad Airport Services won two categories for Best Improved Services in the On Time Arrival and Baggage Delivery categories. Additional categories also included the Federal Authority for Identity & Citizenship, The General Directorate of Customs, the Airport Security Police Department, Etihad Hub Operations, Terminal Operations, Facilities Management, amongst others. “We entrust our partners to help ensure we deliver a seamless and internationally renowned operation around the clock,” commented Bryan Thompson, CEO, Abu Dhabi Airports. “The continued support of our valued partners is an asset to our sophisticated infrastructure and extensive operation that unlocks the gateway to Abu Dhabi for more than 20 million visitors each year,” remarked Ahmed Al Shamsi, Acting Chief Operations Officer, Abu Dhabi Airports. JANUARY 2020 9

AquaChemie to set up US$ 41mn chemical terminal at Jebel Ali Port

Almajdouie Logistics is Frost & Sullivan Award recipient for the fourth consecutive time n Almajdouie Logistics has won the ‘Frost

Chemical storage tanks at Jebel Ali Port.

n AquaChemie Middle East, a leading regional chemical distributor with an extensive supply chain network and manufacturing base across the GCC region, is to build a state-of-the-art chemical terminal facility at Jebel Ali Port in Dubai, United Arab Emirates. Estimated to cost AED 150mn (US$ 41mn), the one-of-its-kind facility will serve as a strategic gateway hub to enable and facilitate vital petrochemical trade across the GCC region and beyond. The new facility will benefit the global petrochemicals market valued at AED 146.5 trillion (US$ 539.3bn) in general and the UAE in particular. AquaChemie Middle East has signed on Mott MacDonald, a renowned global engineering, management and development consultancy, for the design, engineering and project management of the chemical terminal, scheduled to be commissioned by mid-2021. In its entirety, the new chemical terminal will also comprise bulk storage tanks for liquid hydrocarbons (approximately 30,000cbm total capacity) along with day tanks, chemical processing units, automated drumming lines, tanker loading-unloading gantry with top loading arms, covered warehousing for storage of NFPA (National Fire Protection Association) Class 1B and C chemicals. “In addition to serving as a sales channel, the project will also allow regional petrochemical majors to market their various product lines in drums or intermediate bulk containers for distribution to the tertiary chemical industry,” remarked V. Anandkumar, Co-Founder and Director, AquaChemie Middle East. “It will adhere to a fill locally and ship globally modus operandi by sourcing by-product streams available in the region at attractive terms, collecting them in storage tanks and exporting in bulk,” elaborated Subrato Saha, Co-Founder and Director, AquaChemie Middle East. 10 JANUARY 2020

& Sullivan KSA Logistics Service Provider Company of the Year’ Award for the fourth year in a row. Frost & Sullivan Global President and Managing Partner, Anoop Zutshi presented the award to Almajdouie Logistics Deputy CEO, Mohammed Ali Almajdouie at the 2019 Annual Middle East Best Practices Awards Banquet that took place recently in Dubai, UAE. “Winning this prestigious award for four consecutive years is a great honour. I would like to thank all our stakeholders and employees for their hard work and dedication, without which this achievement would not have been possible. In the past year, we have launched a range of innovative new services with our customers’ evolving requirements in mind, and we look forward to building on our achievements in 2019 and beyond,” remarked Almajdouie on this occasion. The Frost & Sullivan awards recognise companies driven by visionary growth, innovation, and leadership that will catalyse and transform industries in the near future. The winners were selected for their exceptional accomplishments and superior performance in technological innovation, customer service, and strategic product development. This year, 40 Awards were presented across seven industry verticals: Transportation & Logistics; Healthcare; ICT; Industrial; Mobility; Chemicals, Materials and Nutrition; and Metals & Minerals. A rigorous measurement-based methodology was used to select the winners in each category. Established in 1965, Almajdouie Logistics Company (MLC) is a powerhouse in the logistics and supply chain industry in the Middle East. The award-winning company operates in Saudi Arabia, the Middle East, and Far East, providing integrated logistics and supply chain solutions to major industries ranging from FMCG to petrochemicals. Its offerings include transportation, heavy lift, project logistics, freight forwarding, terminal handling, warehousing and distribution, and automotive logistics.

Jebel Ali Port accounts for 65% of polymer exports from GCC n Global trade enabler DP World’s flagship Jebel Ali Port handles 65 percent of the polymer exports from the GCC region and has showcased this industry-leading strength at the 14th Annual GPCA Forum in Dubai, organized by the Gulf Petrochemicals and Chemicals Association in early December 2019. A highlight of DP World UAE Region’s participation at the threeday event was the port’s enormous capacity to handle petrochemical and chemical products, as well as the world class integrated logistics hub created by Jebel Ali Port and Jebel Ali Free Zone (JAFZA). Over 10,000 petrochemical manufacturers and traders benefit from the high value added services offered by the hub, and JAFZA is home to more than 500 petrochemical companies. “DP World UAE Region counts the chemical and petrochemical sectors as part of our key industry clusters. Jebel Ali Port and JAFZA as an integrated hub, caters to the extensive demands of the industry at local and international levels,” stated Mohammed Al Muallem, CEO and Managing Director, DP World UAE Region. The GCC economies are quickly moving into leadership position along the downstream supply chain, including distributing and selling the petroleum products.

The DPW UAE Pavillion at the 14th Annual GPCA. In light of this, DP World UAE Region is strengthening its bond with every manufacture, trader and business under the chemical and petrochemical umbrella in line with its policy of seeing them as true partners in the supply chain.

DHL Express inaugurates new US$ 5.5mn logistics facility at Dubai World Central n DHL Express officially opened its Dubai World Central Facility

today. The new import and export gateway and service center will see DHL invest US$ 5.5mn over five years to support the rapid growth of e-commerce in the UAE and the region. Strategically located at the Logistics District at Dubai World Central (DWC), the centre occupies 4,870sqm area and has a capacity to manage 2,400 shipments per hour and up to 57,600 shipments a day. “Our new facility at DWC will accommodate inbound and outbound shipment growth in Dubai South, the new strategic hub in the Emirate. It will also support local e-commerce merchants, online entrepreneurs and startups by allowing them to reach potential global consumers, and improve their e-commerce proposition within the current market,” affirmed Nour Suliman, CEO, DHL Express MENA. “The new center reiterates DHL’s mission to expand and strengthen our presence across the UAE and the wider Middle East region to serve our customers better,” remarked Geoff Walsh, UAE Country Manager, DHL Express. The new logistics facility will offer customs’ clearance import and police-controlled export services with x-ray screening and bonded storage. The facility will also come equipped with an automated bi-directional conveyor system, which will enable faster and more efficient sorting of packages.

L to R-Mike Barrett, Geoff Walsh, Nour Suliman and Bachi Spiga at the inaugural ceremony. The logistics fulfillment and storage center on the upper floor will support tailored logistics solutions for multiple customers. As a Transported Asset Protection Association (TAPA) certified facility, it will employ the latest technology with a dual-view x-ray screening machine and CCTV equipped with 70 IP Cameras, all connected to the main control room, to enable smooth process flows.

JANUARY 2020 11

ADNOC and India’s Reliance Industries sign deal for Ruwais chemical facility n The Abu Dhabi National Oil Company (ADNOC) recently signed a Framework Agreement with Reliance Industries Limited (RIL) to explore development of an Ethylene Dichloride (EDC) facility in Ruwais. The signing of the agreement was witnessed by HE Dr. Sultan Ahmed Al Jaber, UAE Minister of State and ADNOC Group CEO, and Mukesh Dhirubhai Ambani, RIL Chairman and Managing Director. The agreement was signed by Abdulaziz Alhajri, Executive Director, ADNOC Downstream Directorate, and Nikhil R. Meswani, Executive Director, RIL. Under the terms of the agreement, ADNOC and RIL will evaluate the potential creation of a facility that manufactures EDC adjacent to ADNOC’s integrated refining and petrochemical site in Ruwais, Abu Dhabi and strengthen the companies’ existing relationship supporting future collaboration in petrochemicals. ADNOC would supply ethylene to the potential joint venture and provide access to world-class infrastructure at Ruwais, while RIL will deliver operational expertise and entry to the large and growing Indian vinyls market, in which it is a key participant. EDC is a basic building-block for manufacture of PVC, a polymer product in increasingly higher demand globally. PVC plays a critical role in the housing and agriculture sectors, and demand for PVC, particularly in the Indian vinyls market, is expected to grow significantly. We look forward to working closely with RIL to identify opportunities to capitalize on the strengths of the Ruwais

HE Dr. Sultan Ahmed Al Jaber and Mukesh Dhirubhai Ambani (both standing)at the recent ADNOC-Reliance Industries EDC deal signing ceremony. ecosystem, while delivering a compelling new commercial platform for satisfying the large Indian PVC market,” commented Alhajri. This co-operation ideally combines advantaged feedstock and energy from the UAE with Reliance’s execution capabilities and the growing Indian market,” observed Meswani. ADNOC’s expansion and new investment in downstream will accelerate the delivery of its 2030 strategy, powered by a US$ 45 billion investment, and create a more flexible, resilient and diverse energy business, optimizing its performance and stretching the dollar from every barrel of oil it produces.

Zahid Tractors and UD Trucks strike a new partnership in Saudi Arabia n UD Trucks has recently confirmed Zahid

Tractor as the new exclusive importer and distributor of UD Trucks in the Kingdom of Saudi Arabia. This announcement follows a mutual agreement between UD Trucks and Rolaco Group, (the brand’s previous partner in the Kingdom), to terminate their collaboration. Together, UD Trucks and Zahid Tractor are committed to raising the standards of customer service and support to the highest levels, reflecting UD Trucks’ ambitions for the Kingdom and Zahid Tractor’s longstanding reputation as a customer-centric organization, the companies revealed in a joint press statement. The new partnership between UD Trucks and Zahid Tractor is a natural transition, with the Saudi-based company already serving as the importer for several other Volvo Group brands. Founded in 1967, and today focused on three core business units—construction machinery, commercial vehicles and rental. Zahid Tractor’s branches network includes 26 locations, strategically situated 12 JANUARY 2020

UD Trucks and Zahid Tractor officials at the partnership signing ceremony. across the Kingdom. “Saudi Arabia has always been, and continues to be an extremely important market for UD Trucks. In our new partnership with Zahid Tractor, we see excellent potential for future growth and look forward to implementing the significant plans we have for the Kingdom together,” remarked Mourad Hedna, President, UD

Trucks, MEENA. “The same infrastructure, after sales services, Customers Centres network we already have in place serving our Volvo Trucks, Renaults Trucks, and Volvo Bus customers will be welcoming all of UD existing and new customers,” commented Nasser J. Bayram, Group President, Transport, Zahid Group.

EGA’s Al Taweelah refinery surpasses one mn tonnes of alumina production n Emirates Global Aluminium recently announced that Al Taweelah alumina refinery in Abu Dhabi has produced one million tonnes of alumina since operations began in April 2019. Al Taweelah alumina refinery is now expected to reach sustained production at its nameplate capacity during the first half of 2020 Al Taweelah alumina refinery is expected to produce some two million tonnes of alumina per year once full ramp-up is achieved, enough to meet 40% of EGA’s alumina needs. Alumina refineries convert bauxite ore into alumina, the feedstock for aluminium smelters. “Our preparations to operate Al Taweelah alumina refinery safely and efficiently began when the project was still on the drawing board. These plans are being effectively put into action by our operations team of global industry veterans and UAE nationals,” remarked Abdulla Kalban, Managing Director and Chief Executive Officer, EGA. EGA invested some US$ 3.3bn to build Al Taweelah alumina refinery. Construction took 72 million man-hours of work,

An engineer at work at EGA’s Al Taweelah Plant. equivalent to one person working for over 25,000 years. The new plant contains some 9,500 instruments, 222 tanks, enough piping to stretch from Abu Dhabi to Muscat, and cabling that would reach from Abu Dhabi

to Cairo. It covers an area equivalent to 200 football fields, and contains enough steel to build seven Eiffel Towers. Separately EGA began bauxite exports from its subsidiary Guinea Alumina Corporation in August 2019.

Kerry Logistics launches regional operations in Bahrain n The Bahrain Economic Development

Board (EDB), the investment promotion agency for the Kingdom of Bahrain, has recently announced that one of Asia’s largest third-party logistics providers, Kerry Logistics Network, has launched operations in the Kingdom. The Hong Kong-headquartered company which manages 60mn sqft. of logistics facilities over 53 countries and territories, investment in Bahrain is part of their regional footprint expansion plans to enhance access to key markets such as the Saudi market, the Gulf’s largest market. As well as access to Saudi Arabia and the opportunity to scale across the wider $1.5 trillion GCC markets, Kerry Logistics cited the EDB as part of their decisionmaking process in launching operations in Bahrain.

Hussain Rajab, Co-Chief Investment Officer – Manufacturing, Transport and Logistics, EDB. “The Kingdom has acted as a commercial bridge between the East and the West for thousands of years. In today’s increasingly digital and hyper-connected world, it is the ideal regional logistics hub,” commented Raymond Cheng, Director— Middle East & Africa.

“The rapid access to key decisionmakers enjoyed by businesses, large or small, when looking to set up in Bahrain is unparalleled. We call it our ‘Team Bahrain’ approach and it embodies the access and connectivity that really sets Bahrain apart,” stated Hussain Rajab, Co-Chief Investment Officer – Manufacturing, Transport and Logistics, EDB. Bahrain enjoys easy access to GCC markets via Saudi Arabia by the 25km King Fahad causeway, and with a second causeway to Saudi Arabia in the planning stage. Also due for completion in the first quarter of next year is a new terminal for Bahrain International Airport, which will increase annual capacity of passengers to 14 million from 8 million, and cargo capacity to 1 mn metric tonnes per annum. JANUARY 2020 13

DHL Express and Abu Dhabi Airports collaborate in new expansion deal n Abu Dhabi Airports Free Zone Authority (ADAFZ), a wholly owned subsidiary of Abu Dhabi Airports, has signed an expansive 27-year ‘Musataha Agreement’ with Middle East General Enterprises (MGE) to facilitate the presence of DHL Express in the Abu Dhabi Airports Free Zone (ADAFZ). The long-term relationship between ADAFZ, MGE and DHL represents a milestone achievement in the development of the Express Integrator cluster at the East Midfield Development Zone located in the ADAFZ. DHL Express will serve as a key client within ADAFZ’s Express Integrator cluster, and in close collaboration with MGE combined will invest up to AED 365mn (approximately US$ 100mn) in the new facility. The DHL expansion will cover 30,000 square meters and aims to be operational by the fourth quarter of 2021. “The signing of this agreement is a testament to the longstanding relationship between Abu Dhabi Airports and DHL. E-commerce is transforming the retail landscape throughout the region,” commented Sheikh Mohammad Bin Hamad Bin Tahnoon Al Nahyan, Chairman, Abu Dhabi Airports “The collaboration reiterates DHL’s strategic mission to strengthen our facilities and key positions across the UAE and the wider Middle East region,” observed Nour Suliman, CEO, DHL Express MENA.

Abu Dhabi Airports and DHL Express’ groundbreaking ceremony. DHL’s operations at Abu Dhabi International Airport have grown significantly over the years, starting with a facility at AUH Cargo Village, prior to expanding to more than 4,300sqm in the Logistics Park, and now to an expansive plot of land with both airside and landside access in a prime location.

CMA CGM and Total to develop LNG ship refuelling n CMA CGM will use the French

Mediterranean Port of Marseille for refuelling its planned gas-powered vessels, backed by a supply partnership with energy group Total. Total will supply liquefied natural gas (LNG) and a refuelling barge to enable CMA CGM to refuel LNG-powered vessels at the Marseille-Fos hub starting in 2021, the companies said in a recent joint statement. The initiative covers five vessels with a capacity of 15,000 twenty-foot equivalent units (TEU) each that will come into service from 2021 and operate between the Mediterranean and Asia. Total will supply around 270,000 tonnes of LNG per year over 10 years at Marseille, while also providing a complementary refuelling service in Singapore, according to the statement. LNG has been promoted as an alternative to bunker fuel oil for shipping lines facing an IMO January 2020 deadline to meet new international standards on emissions.

14 JANUARY 2020

The CMA CGM’s Amerigo Vespucci. French-based CMA CGM, the world’s fourth-largest container shipping line, turned to LNG two years ago when it ordered the first-ever giant container vessels to be powered by gas. These nine 23,000-TEU ships, the first of which is due to come into service next year on the Europe-Asia route, will be refuelled at Rotterdam in a similar partnership with Total. “We’re in the process of creating an LNG

market for very large ships,” asserted Farid Trad, Head of Bunkering, CMA CGM. The refuelling arrangements at Rotterdam and Marseille would allow vessels to carry out a return journey to Asia without requiring additional refuelling stops, Trad continued. CMA CGM expects to have 20 LNGpowered ships by 2022, including smaller vessels run by its container ships subsidiary in northern Europe.

UPS delivers largest shipment for Expo 2020 n UPS recently announced today the completion of a series of multi-modal deliveries for Expo 2020 Dubai’s iconic entry portals in the run-up to next year’s official opening. UPS, the Official Logistics Partner of Expo 2020 Dubai, choreographed multiple shipments from Germany through Belgium’s Port of Antwerp and into Dubai’s major commercial port in Jebel Ali. “These extraordinary entry portals will welcome 25 million visits and, likewise the logistics required for these shipments, is nothing short of monumental,” said Nando Cesarone, President, UPS International. The 21 x 30 meter, carbon-fiber structures were placed at the three main entrances to the site, roughly a year before Expo 2020 opens on Oct. 20, 2020. The entryways will transform the skyline of the Expo 2020 site and symbolize the futuristic spirit of the international exposition. “Transporting the iconic entry portals to our fast-developing site in Dubai was a major organizational and logistical challenge,” conceded Sanjive Khosla, CCO, Expo 2020 Dubai. The precision-machined portals were designed and built by HA-CO Carbon GmbH, one of Germany’s cutting-edge small businesses in Bavaria. In line with Expo 2020’s theme of sustainability, 90 percent of the material used to construct the permanent areas of the site — including the portals — will be reused or re-purposed after the event.

Freight delivery from UPS International ahead of Dubai Expo 2020. “Driving by or flying over the Expo 2020 site, you can’t help but notice one of the world’s most sophisticated, synchronized peacetime logistics operations in full swing,” said Alan Williams, UPS’s Expo 2020 Vice President of Operations.

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ENGIE and GCC-Lab collaborate for expansion in Saudi Arabia n ENGIE and GCC-Lab entered a memorandum of understanding to further expand the services offered to the Kingdom of Saudi Arabia. ENGIE will collaborate with GCC-Lab to ensure the highest quality of energy services is provided to the Country and the region. The services will cover, multi-disciplinary root cause failure analysis, oil testing, cyber security, alarm management, emission reduction services, electromagnetic compatibility, lighting testing lab, maintenance interval services, power plant water chemistry, materials and nondestructive testing and turbo machinery. ‘The expertise of ENGIE in this particular field exceeds 60 years and is applied in over 60 countries. We look forward to working hand in hand with GCC-Lab and enhancing the level of service to the electricity sector in the Kingdom and the region,” said Mazhar Saleem, Head of ENGIE Laborelec for the Middle East, South & Central Asia and Turkey. ‘By bringing such expertise, we are also able to accelerate the knowledge transfer

ENGIE and GCC-Lab officials pose for a group photograph. to the local workforce and expand our collaboration in R&D with local Universities and Institutes in the kingdom,” commented said Turki Alshehri, CEO, ENGIE, Saudi Arabia. ENGIE has been present in Saudi Arabia

for decades and is established as one of the largest independent power and water producers in the Kingdom, and as a leader in energy services. The Group has recently inaugurated its new office in Riyadh to ensure a tighter presence in the country.

KFS collaborates with Grandweld to build two crew boats n Grandweld Shipyard, the Dubai-UAE based shipyard that

specializes in designing, building, and maintaining ships and boats, concluded 2019 with an agreement to build two crew boats to Khalid Faraj Shipping (KFS). The Abu Dhabi based shipping company delivers comprehensive marine services and logistical support to offshore oil and gas projects. In addition to this major accolade, the contract includes an option that allows Khaled Faraj Shipping to build two additional boats, with price protection over a period of three months. Concluding its results for 2019 with great success, the contract holds significant value for Grandweld boosting the business with momentum and sustainable cash flow during the upcoming year. This allows the company to achieve additional performance records, utilizing the recovery in the oil and gas sector in response to major investments proclaimed by the Abu Dhabi National Oil Company (ADNOC), Saudi Aramco, as well as numerous other leading oil and gas production companies within the region. “Grandweld being KFS’ choice to manufacture their new boats is an honour that we hold dearly,” affirmed Eng. Jamal Abki, General Manager, Grandweld Shipyard. The contract stipulates that the two boats are to be delivered before the end of 2020, as they will begin operations immediately in order to fulfill the grand expansion plans of KFS, as a result to the increased demand in the oil and gas sector in Abu Dhabi.

16 JANUARY 2020

Grandweld and KFS officials at the contract signing event. “KFS’ priority is to improve the company’s In Country Value (ICV) ranking. This represents our commitment towards the national economy. In order to achieve this, we do business with national companies that operate within the UAE, giving them priority in delivering our projects,” explained Khalfan Faraj Al Muhairbi, Chairman, KFS.

DP World acquires leading Singapore-based marine logistics provider n Unifeeder, a 100% owned subsidiary of DP World, has announced the acquisition of a 77% stake in the Feedertech Group. The deal, which is expected to close in Q1-2020, is the latest step in DP World’s vision to build end-to-end logistics capability to serve the needs of shipping lines and cargo owners. The acquisition of Feedertech will expand the company’s feedering and short-sea product offering to multiple geographies. Established in 2003 and based in Singapore, Feedertech operates two businesses—Feedertech, an independent feedering service, and Perma, a regional shortsea network. Acquired by DP World in 2018, Unifeeder, is an integrated logistics company with the largest and best-connected feeder and growing shortsea network in Northern Europe with connectivity to approximately 100 ports. Through Feedertech and Perma, Unifeeder will have the capability to offer feedering and regional shortsea connectivity in Northern Europe, the Mediterranean, North Africa and now Asia and the Indian Subcontinent. DP World aims to preserve the common-user independent platform, while increasing efficiency to offer a more complete logistics solution to all its customers. DP World’s strategic objective was to create additional value by using Unifeeder’s management expertise to replicate the assetlight model in other regions. The Feedertech Group transaction is

DP World has acquired Feedertech. the first stage of this ongoing value creation process. “The acquisition of a stake in the Feedertech Group is another strategic step in our vision to build an end-to-end logistics capability and offer an integrated service suite,”remarked Sultan Ahmed Bin Sulayem, Group Chairman and CEO, DP World. “Feedertech’s transaction with Unifeeder with the support of DP World, will allow us to take the business to the next stage of its growth,”commented Ali Maghami, Founder and Chairman, Feedertech.

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Dubai Customs receives ‘Leader’ level accreditation n Dubai Customs has received a ‘Certified Innovative OrganizationLeader Level’ certificate from the Global Innovation Institute to be the first customs organization in the UAE and worldwide to be graced with this accreditation. Certified Innovative Organization (CInOrg) is a unique certification reserved exclusively for businesses and government agencies. Through a process of independent third-party review and assessment, the CInOrg establishes that an organization has demonstrated a certain level of maturity and capability with respect to being able to consistently deliver on short, medium, and long term innovation and growth endeavors. This accreditation distinguishes Dubai Customs among its peers and competitors as being capable of delivering leading-edge value and customer experiences to its markets. Director General of Dubai Customs Ahmed Mahboob Musabih received the certificate and the shield from Juma Al Ghaith, Executive Director of Customs Development Division. He also received the Innovator of the Year 2019 award which Hussam Juma, Director, Service Innovation Department has won recently. It is a new award launched by GInI this year and was given to Hussam Juma for his noticeable role in leading innovation in services. “This accreditation is a reflection of the high level of commitment Dubai Customs shows to innovation,”Ahmed Mahboob Musabih, Director General of Dubai Customs said on the occasion. “Receiving the (Certified Innovative Organization) accolade from the Global Innovation Institute is an indication of our incessant and

Dubai Customs received ‘Leader Level’ accreditation from a top industry body. ceaseless efforts in developing innovative environment in Dubai Customs,” remarked Juma Al Ghaith, Executive Director, Customs Development Division, Dubai Customs. The ‘Global Innovation Institute’ is an international organization providing professional membership associations and certifications in the field of innovation.

ACWA Power to drive solar energy development in Ethiopia n ACWA Power, a leading international

developer and operator of power generation and water desalination projects, signed two long-term power purchase agreements (PPA) with Ethiopia’s stateowned electricity producer Ethiopian Electric Power (EEP) for two 125 MWac solar photovoltaic (PV) projects at USD 2.526 cents/kWh over 20 years. Implementation Agreements were also signed with the Government of Ethiopia, represented by the Ministry of Finance. The signing ceremony was attended by HE Abiy Ahmed Ali, Prime Minister of Ethiopia; HE Sami Bin Jameel Abdullah, Saudi Ambassador to Ethiopia, HE Ato Ahmed Shide, Ethiopia’s Minister of Finance and Paddy Padmanathan, President and Chief Executive Officer, ACWA Power. ACWA Power won the bid for the two PV plants of 125 MWac each during the first round of Ethiopia’s solar programme organised by the PPP-DG under the new

18 JANUARY 2020

HE Ahmed Shide, Ethiopia’s Minister of Finance and Paddy Padmanathan during signing ceremony. PPP law, and signed a Letter of Intent with the Ministry of Finance and EEP in October 2019. “Our focus is to expand our renewables capacity and we are confident that ACWA Power’s leadership and international expertise in this sector will benefit us significantly,” remarked HE Ato Ahmed Shide. With a combined capacity of 250 MWac, the PV projects are estimated to power

750,000 homes in Ethiopia and offset 320,000 tonnes of carbon dioxide per year. The new plants will be located in Dicheto, in the Afar region, and in Gad, in the Somali region of the country. “The 250MWac projects are the first of a kind in the Ethiopian utilities landscape and will be a support the diversification of the energy mix within the country,” stated Padmanathan.

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GCC Energy Outlook

Headwinds determine new energy trajectories in the Middle East and globally Growing energy demand in the GCC countries It is an undeniable fact and truism that energy has been an indispensable pillar and the cynosure of the economies of the GCC. The energy sector in GCC countries plays a vital role in attaining economic and social development and contributing to the Gross Domestic Product (GDP).

CC economies have been defined and sustained by regionâ&#x20AC;&#x2122;s burgeoning oil and gas resources. It is estimated by reliable sources that the Gulf Cooperation Council (GCC) hold almost a third of proven global crude oil reserves and about a fifth of the world gas reserves (BP, 2019). The export of the hydrocarbon, in the form of crude oil, petroleum products and other liquids and natural gas, improved the economic growth and has brought impressive development and wealth to these countries. Rapid industrialization resulted in large percentage of labour migration. Furthermore, the high birth rate in the GCC coupled with improving living standards and increasing water desalination caused rise in the energy consumption. By 2025 it is expected that the total population will reach around 59mn while the total electrical energy consumption will jump to 1094 Moreover, with the recent fall in global oil prices the contribution of oil exports to the economy of the GCC is affected. The main fuel that is used for electricity generation is natural gas followed by crude oil and the rest is divided between light oil, heavy fuel oil, diesel and renewable sources.

Energy Mix Using 75% of natural gas in the energy mix in the region for electrical power generation power will raise the amount of gas required in year 2025, which is expected to increase to 8.2mn-mn cubic feet. The remaining fuel in the energy mixed (25%) is assumed to be 20 JANUARY 2020

crude oil, used for electricity generation, the expected amount required will be 437mn barrels by year 2025. This is the synopsis of a recent research paper published jointly by Abdullah AlBadi, Professor, College of Engineering, Sultan Qaboos University (SQU), Muscat, Oman and (Ms.) Imtenan Al-Mubarak, a Senior Research Associate in the Policy and Decision Science Programme at the King Abdullah Petroleum Studies and Research Centre (KAPSARC) in Riyadh, Saudi Arabia.

Diversificationâ&#x20AC;&#x201D;the key Diversification of the energy mix by including renewable resources presents opportunities to this region as it would free up hydrocarbon production for export. In order to reduce the energy consumption and conserving of natural resources several measures by the GCC countries should be taken such as implementing policies, reducing energy subsidies, improving energy efficiency, increasing the share of renewable energy in the energy mixed, more trade of energy through the GCC grid, the researchers counselled. The energy sector in GCC countries is pivotal and key to ushering in economic and social development, and contributing to the Gross Domestic Product (GDP). However, the sector has two main effects on the achievement of sustainable development; the first is the suffering from negligible contribution of renewable energy source in energy production and the high consumption pattern.

GCC Energy Outlook

JANUARY 2020 21

GCC Energy Outlook

The second adverse effect of the sector is on the environment. Consumption in GCC differs from most of developed countries, as the world obtains more economic growth from each barrel, the GCC are moving in the opposite direction

Drivers of energy demand There are several factors contribute to high energy demand in the GCC. These factors include geography and available natural resources; population growth, urbanization and rising living standards; and economic

22 JANUARY 2020

development. Overall, the combination of available resources and current pricing schemes has particular impacts on demand patterns in the region, in both residential and industrial sectors. The discovery of oil spurred economic development in the GCC. In 1980, when the oil price peaked at around US$ 102 per barrel (/bbl) in todayâ&#x20AC;&#x2122;s value, GCC governments used the revenues resulting from exports to pursue aggressive economic and social development, including the development of large-scale infrastructure and the launch of heavy (energy-intensive)

industries such as petrochemicals and cement production. This led to a staggering rate of energy consumption growth and high levels of energy intensity, an indicator of GDP output per unit of energy demand. This reflects that abundance of low-cost fossil fuels prompted development of energy-intensive industries (low-cost supply gives them a competitive advantage) but also that industry obtains electricity at subsidized prices. By 1986, reduced oil demand and increased production created a supply glut that pushed the oil price to less than US$

GCC Energy Outlook

22/bbl in today’s prices. The consequence was a great loss in revenue for the GCC oilproducing economies. According to the recently published Q4-2019 ICAEW Economic Update, the oil sector drag should abate in 2020. The Middle Eastern economy is expected to recover in 2020, following what’s shaping up to be the weakest performance on record this year. The improvement will be principally about Iran and Saudi Arabia, with a more modest pick-up elsewhere. Oil remains the dominant enabler of growth in the GCC states which, given low-

Qatar has budgeted US$ 200bn for infrastructure upgrades in transportation, construction and service sectors in preparation for World Cup 2022.

trending prices and ongoing output caps, will limit the upside for recovery in the year ahead. The outlook for the UAE remains promising, with Expo 2020 expected to boost the economy, in spite of ongoing weakness in non-oil activity.

Regional overview Weak global demand will constrain the scope for OPEC+ to relax current restrictions. OPEC’s next moves are uncertain and geopolitical developments make their impact on oil prices in the region. As a minimum, members will have to roll-over the current level of cutbacks beyond March 2020, when they are currently set to conclude, to reinforce a floor under oil prices. Under the deal, producers pledged to cut 1.2m b/d of output (0.8m b/d from OPEC and 0.4m b/d from non-OPEC), and the actual cuts were some 36% more than this. Meanwhile the ongoing weakness in the global economy will keep a lid on oil prices, maintaining a key headwind for Gulf Cooperation Council’s (GCC) commoditydependent economies. Following the attack in September on Saudi Arabia’s oil facilities that halted almost 5% of global oil supply, oil prices jumped by 15% in one day, the biggest climb in 30 years. But they swiftly fell back again, to around US$ 60pb, as production was restored, underpinning our 2019 and 2020 oil price forecasts of US$ 63.8 and US$ 64.6pb respectively. Oil sector dynamics will limit the upside for GCC GDP growth in 2020 though we see some recovery, with the region expanding by expanding by 2.1%, after 0.7% this year. Non-oil growth is also likely to improve to around 2.8% y/y, from an estimated 2.1% this year, supported by government spending. The GCC economies have witnessed a series of boom and bust cycles in the past decade. Between 2002 and 2008, oil prices rose again to highs of US$ 147/bbl which resulted in combined GCC economy tripled

in size to US$ 1.1tn. In line with the global economic crisis which began in 2009, the oil price dropped by 35% to US$ 61/bbl.

Oil price cycles In 2014, the region reported slower growth with a combined GDP of just US$ 1.6tn and total exports of around US$ 861bn, even as oil prices again peaked to US$ 112/bbl. The subsequent decline in global oil prices (to around US$ 30/bbl) shaved another US$ 360bn from export revenue in 2015. Overall, high dependence on a volatile commodity has created something of a vicious circle in which GCC economies are highly vulnerable to oil market cycles. More recently, oil prices are recovering from a low of US$ 30/bbl to a monthly average of US$ 50/bbl to US$ 60/bbl. These prices have again put more stress on GCC government budgets, as oil and gas exports accounts for 80% of fiscal revenues. The resulting lower public spending has slowed overall growth. With the recent decisions, in the 4th quarter of 2016, May 2017, and July 2019 to cut OPEC oil production, growth is now expected to stall. In response, GCC governments are increasing efforts to diversify their economies beyond hydrocarbons, and have introduced several reform initiatives that focus on improving the medium-term fiscal outlook. Several mega-projects that should support growth in the near term have been announced. Dubai has allocated US$ 6.9bn to infrastructure projects associated with hosting the World Expo 2020. Qatar has budgeted US$ 200bn for infrastructure upgrades in transportation, construction and service sectors in preparation for World Cup 2022. The free Zone in Duqm (Oman), which comprises an area of 1777 km2 to be built up with a sea port, industrial areas, a town, a fishing harbour, a tourist zone, a logistics centre, and an education and training zone, is another megaproject expected to attract foreign investments and support economic development. JANUARY 2020 23

GCC Energy Outlook

MEED research reports Saudi Arabia as the single largest spender in the region’s oil and gas sector with more than US$ 31bn worth of contracts in execution.

In a recent report, the International Energy Agency (IEA) cut its oil demand growth forecast for both 2019 and 2020 to 1mn bpd and 1.2mn bpd respectively. This year is seeing two very different halves, it highlighted. In the first half of the year, global growth was only 0.4mn bpd but in H2, it could be as high as 1.6mn bpd goaded by with growth seen in non-OECD nations. “Demand is supported by Brent prices that are more than 30 percent below year-ago levels. For 2020, a weaker GDP growth forecast has seen our oil demand outlook cut back,”it added. Additionally, renewable energy growth is also triggering a slowdown in demand for traditional energy sources such as oil and gas. The share of renewable energy in fulfilling global energy demand is touted to reach 12.4 percent in 2023.

Headwinds

Energy pricing and consumption patterns For the most part, governments control the energy assets underpinning GCC economic development. A long-held tradition is that the wealth generated through energy exports is “shared” in that domestic energy which is supplied to citizens and industries at very low cost with the dual aims of ensuring energy access and boosting economic development. GCC countries already took measures to increase energy security by initiating renewable energy projects. Nevertheless, renewable energy did not fulfill its potential at the expected pace. Governments can increase the adoption of these sources by specifying measurable binding policies, set clear regulations along with establishing independent regulatory bodies. Comprehensive energy mix policy must be identified and applied along with timebound reasonable targets. Clear market structure coupled with transparent policies is vital to have the private sector participate actively in the energy transition. UAE, Qatar, Bahrain and Oman use mostly natural gas for electricity generation. Some of these countries have are already become importers of natural gas. Yet, Kuwait and Saudi Arabia burn more oil to generate 24 JANUARY 2020

electricity. In order to better utilize the latter’s crude oil resources, KSA has equipped new power plants to use natural gas.

Bearish outlook Overall, the oil and gas sector carries a bearish outlook on the back of sluggish global growth, forecasted at 3 percent for 2019, the lowest still since 2008-09. Although the International Monetary Fund (IMF), in its latest outlook in October 2019, predicted a 3.4 percent growth for 2020 on the back of marked economic improvement in certain emerging markets, growth could be downplayed by a slowdown in markets such as China and the US as well as geopolitical strains.

OPEC policy leads The numbers from the Organisation of Petroleum Exporting Countries (OPEC) also corroborate a slowdown, with global demand for OPEC crude estimated to average 29.6mn bpd in 2020, a drop of 1.2mn bpd from 2019. The OPEC group’s production in September 2019 for example was 1.32mn bpd lower month-on-month at 28.49mn bpd, primarily due to the attack on Saudi Aramco’s oil facilities.

Despite the headwinds, industry forecasts do predict a positive longer-term outlook for the sector, propelled by population increase and economic growth. Global oil demand is expected to grow by a minimum of 10mn barrels a day by 2040, according to the IEA. Natural gas demand is forecast to grow by 40 percent and petrochemicals by 60 percent in that time. Regionally, to cater to this demand, more than US$ 859bn worth of oil, gas and petrochemicals projects are planned or in progress across the Middle East and North Africa region, according to a research report by MEED. The report credits Saudi Arabia as the single largest spender in the region’s oil and gas sector with more than US$ 31bn worth of contracts in execution. Second in line are Kuwait’s three largest oil and gas companies, which have US$ 42.2bn accumulated worth of projects in progress. Abu Dhabi National Oil Company (ADNOC), which has announced multiple new partnerships and deals in recent months, has US$ 16.7bn combined contract worth of projects under execution across onshore and offshore upstream businesses, the report found. Outside the GCC, Algeria’s Sonatrach has announced plans of US$ 10.8bn worth of projects, while Egypt’s Petroleum Ministry has sought US$ 12.3bn worth of projects. Up to 130 new crude and natural gas projects are also expected to be underway in Asia in the next eight years, contributing close to 518,000 barrels per day. n

Integrated Energy Logistics Provider The Tristar Group is a fully integrated Logistics Solutions provider that offers a comprehensive list of services to cater to the needs of the petroleum, chemical and petrochemical industries, both in the region and globally. The company’s core expertise lies in its ability to safely handle and distribute all types of retail fuels, lubricants, chemicals, petrochemicals and liquid gases. Specialized Warehousing for Chemicals & Dangerous Goods

Commercial Aviation Refueling

The JAFZA South custom built warehouse has the capability to offer both ambient and temperature controlled storage for a wider range of petroleum products, including industrial solvents and soft chemicals. Total warehouse capacity is in excess of 17,000 pallet positions. The facility has an in-house fully automatic tank cleaning facility installed by Groninger (Europe). The tanks will be cleaned with soft water with chlorine content less than 50PPM alongside with a high pressure pump of 100 bar and a Boiler designed to produce steam at 1.2 TPH, which generates hot water of 80 Degrees Celsius. A fully automated effluent treatment plant will treat and recycle all waste water from the cleaning station to be used for general cleaning and irrigation purposes.

Tristar is into the commercial aviation sector in Africa by offering refueling services at the Juba International Airport and Malakal Airport in South Sudan, starting with Flydubai, WFP and several members of the Africa Airlines Association. Tristar has also established an Aviation Refueling Station at the Monrovia Airport in Liberia which is ready for commissioning. Tristar’s Aviation Fuel Stations comply with international standards, specifications and guidelines set by IATA, JIG, AFQRJOS, as well as with IFQP requirements set by Airlines for Aviation Fuel Quality Control and Operating Procedures. Tristar has been a member of IATA since 2008 and has a technical service agreement with Hansaconsult.

Polymer Bulk & Bagging Warehouse

Fuel Farm

The multi logistics polymers facility in JAFZA South is designed for receiving bulk PP/PE granules into silos and bagging of the granules by fully automated bagging operation into FFS film bags and/or big bags. The packed material can be stored inside the warehouse in racking with a capacity of 8,000 tons. It also has a drum filling station with capability to drum from ISO tanks and road tankers thus providing customers a solution to receive in bulk and store and distribute in packed conditions.

Tristar owns, operates and manages 62 fuel farms globally with a storage capacity of more than 700 million liters for handling a wide range of petroleum products like Jet Fuel, Gasoline, Gasoil, Fuel Oil, etc. Tristar’s fuel farms and storage depots are constructed and maintained in the services of its clients. Our largest fuel farm is in the Pacific island of Guam which has a capacity of 4.2M barrels. All the operations comply with the local and international safety and environment standards, including OSHA and USEPA.

Road Transport

Shipping

Tristar owns and operates over 1,700 vehicles ranging from road tankers, trailers and delivery pickups in the Middle East, Asia and Africa. Operations are certified for Integrated Management System including the latest ISO 9001, ISO 14001, ISO 45001 and ISO 39001. Tristar is periodically assessed by the Gulf Petrochemicals and Chemicals Association for SQAS (Safety and Quality Assessment System).

Email: info@tristar-group.co

The shipping business acquired Eships in early 2016 and now owns and operates 29 chemical, oil and gas tankers and bulk carriers trading globally, mostly with Oil Majors. The vessels include the six Eco MR tankers (50,000 DWT) delivered in 2016 and the six new build 25,000 MT DWT, IMO Type 2 Oil and Chemical tankers to be delivered between the middle of May 2020 till the first week of January 2021. These ships are fitted with fuel saving equipment such as the Propeller Boss Cap Fins and Trim Optimization System.

Website: www.tristar-group.co

Logistics and Supply Chain Global Forecasts for 2020 Expert Column: Tom Craig

Future forward and industry’s purported trajectories through the Sage’s looking glass

In his Opinion-Editorial contribution, Tom Craig, President LTD Management, Pennsylvania, USA, a leading authority and professional consultant on logistics and supply chain management and regular contributor to Global Supply Chain gazes at his crystal ball to prognosticate what 2020 has in store for the international logistics and supply chain industry on 25 counts. 26 JANUARY 2020

erhaps this should be called the future directions or expected trends of supply chain management and logistics. The prognostications reflect three foci—supply chain management and logistics as standalone topics; within a larger context, such as manufacturing or retail; or in terms of mega trends. For 2020 and perhaps for much of the decade, change and transformation will be the issue—supply chain management, logistics, manufacturing, and retail. Much of 2020 will be items that have begun and how they will play out. Call it unresolved challenges. They are unresolved because they are evolving and because many logistics providers, manufacturers, and retailers are slow to transform—using programs instead of strategy.

Expert Column: Tom Craig

Recognizing that supply chains are not linear, that there are supply chains within supply chains, will increase as a key action in increasing end-to-end velocity and performance. IMO 2020 will play out to see the impact of ocean carriers that use and pay for low sulphur fuel versus the structural integrity, life, and maintenance of scrubbers, the alternative to paying for low sulphur fuel. Customer power and expectations will continue to remake retail and manufacturing. Speed is the new competition. The disruption and chaos that is happening in retail and manufacturing is being driven by the supply chain revolution, not evolution, with its end-toend velocity. This, in turn, is driving logistics transformation. All of this will continue. Technology will increase as a disruptor, change driver, and requirement in logistics and supply chains. The question will be whether shippers continue to expect logistics providers to lead the way or if they will step up to direct what is needed for greater velocity, visibility, and integration across the total supply chain. Retail is approaching the tipping point on its e-commerce omni-channel ability to meet customer expectations with perfect order delivery velocity. Transforming to the strategic, weaponized supply chain takes time---time that is slipping away. Retailing and manufacturing is in the early stages of a new reality for how to reach and serve customers, both B2C and B2B. That new reality requires the new supply chain with end-to-end velocity. Pressure will mount of all transportation for reducing greenhouse gases. 3D printing will begin to move from factories to supply chains to improve perfect order performance, especially as to delivery requirement. The disruption and chaos that has been happening in retail and manufacturing is being driven by supply chain revolution, not evolution—which, in turn, is driving logistics revolution. All this will continue. 3PLs will begin to transform to 3PSCM (third party supply chain management) or SCMaaS (Supply Chain Management as a service) as the emphasis shifts to the end-to-end supply chain. Logistics will

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The strategic importance of supply chain management will escalate. Recognizing and acting on it will be a sign of the manufacturing and retail leaders. Underlying much of what will continue to reflect power shifts—customer have it for e-commerce, population and how to serve large populated areas and lesser populace regions when speed of order delivery is important, and shift of key ports. The urgency of change will increase. The challenge for some firms will be going for quick fixes instead of transformation and that can compound their situations.

Predictions lineup

be defined within the supply chain, not as separate segments. The push for greater supply chain velocity will mean the use of lean supply chain management; especially for the outside the four walls supply chain. Technology will continue its importance in the new supply chain. But there will be separation as to the real value of various technologies. The position, role, and demands on supply chain management and logistics will increase as IoT advances. Logistics disruption increases. Its role and structure in the new supply chain. Continuing impact and threat of end-to-end supply chain velocity and its order delivery velocity. Customer reverse-outsourcing. Technology impact on industry niches. Disintermediation. Future of some providers. Digitization will be a key technology for supply chains and logistics for visibility, velocity, and integration. Two important documents here are the bill of lading and purchase order. E-commerce order delivery leaders may be reaching the limits on order delivery, downstream velocity, even with robotics and aligning more distribution centers with customers. This will mean shifting emphasis upstream—toward the supply of supply chain management. That is also important for achieving end-to-end speed. ERP systems will be challenged to meet the end-to-end velocity requirements of supply chains in the new reality. As the inventory effect of trade wars forward buying draws down, the performance ability of in-store e-commerce fulfillment will be tested. The challenge will increase for SME manufacturers and retailers to up their supply chain capability without having the resources for technology. As the digital factory gains traction, the need for the digital supply chain will be recognize. Otherwise the benefit is weakened. This means moving outside the four walls. Supply chain velocity and the new supply chain will especially put more pressure on container line performance and on the role and design of 3PLs. n

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For more on the new supply chain management and logistics—the new reality—go to www.ltdmgmt.com JANUARY 2020 27

LogiSYM 2020 Dubai

Point of convergence for logistics and supply chain professionals Following its successful conduction in 2018 and 2019, the 3rd edition LogiSYM Dubai will hold its unique and globally renowned symposium on 8th June 2020 at the Jumeirah Creekside Hotel.

ogiSYM Dubai 2020, in partnership with Europhia Consulting and with its theme ‘Gateway 2020: Opportunities Post 2020’, will bring together shippers, manufacturers, 3PLs, forwarders, logistics professionals, educators and technology solutions providers from around UAE. LogiSYM Dubai 2020’s theme this year focuses on Dubai’s continued pivotal role as a global airfreight gateway harnessing the latest digitalization technologies and operational excellence to carry it well beyond the next decade. LogiSYM is the collaborative platform of the ‘The Logistics and Supply Chain Management Society’, Asia’s premier peer-to-peer members-only logistics practitioners association. As ever, the symposium will bridge the gap between supply chain concepts and technology, and real world implementation. It will also showcase the benefits generated from increased supply chain pipeline velocity, profitability and performance, and will offer unrivalled networking opportunities, enabling delegates to acquire actionable takeaways. “LogiSYM 2020 will set the benchmarks and standards for logistics and supply chain across the Middle East and its vast hinterland. High profile delegates attending this landmark symposium will have opportunities to interact and bond with peers to outline transformations in the logistics landscape of this region,” affirmed Eelco Dijkstra, Managing Partner, Europhia Consulting. Global Supply Chain is the media partner for LogiSYM 2020 and will provide extensive pre- and post-event coverage.

Conference Themes Conference themes include ‘Securing the position of Dubai as Regional Logistics Gateway Post 28 JANUARY 2020

2020’; Airport Free Zone: How airport logistics developments strengthen Dubai as MENA gateway role further into the future; Green Customs zones within Dubai allow for fast cross-docking of freight between logistics free zones; DP World – Medium Term Regional Freight Forecast. Where is the freight growth within the MENA region and how DP World is aligning itself for growth across the region. There will be the business case made for the Pharmaceutical Distribution from Dubai into India and across the MENA region. There will also be a business case made for Dubai as regional e-commerce gateway for companies such as Amazon.com. What makes it so attractive? Furthermore, there is also the business case made for ‘Robotics in warehousing. Why does it make sense also in the UAE? A also another business case for ‘Distributing Toys across the GCC—Opportunities and Challenges of Distributing Consumer Products across MENA’. LogiSYM Dubai gathers together industry leading decision makers from across the logistics and supply chain industry in attendance as both speakers and delegates. You will connect with senior level executives from both major corporations and innovative small-to-medium size companies. Confirmed initial speakers include Khalid Ahmed Mohammed Al Marzooqi, Director, Commercial Activities, KIZAD; Fadi Amoudi, Founder & CEO, IQ Fulfillment and Hisham AlBahar, Group CEO, Posta Plus. The 2nd LogiSYM Awards 2020 will recognize individuals and companies who have actively demonstrated or contributed significantly to the regional supply chain and logistics industry. 8-member jury comprising eminent and well-regarded professionals from across the spectrum of the logistics and supply chain industry has been empanelled to vet the entries and nominations. n

Discover the IVECO world and all its news on: www.iveco.com, Middle East area. Or call now the IVECO Representative Office: 00971 4 2994935

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National Association of Freight & Logistics (NAFL)

NAFL holds 2019 year-end commemorative General Assembly Meeting on high-water mark Celebrations, camaraderie and cohesion were evident at the NAFL GAM meeting held on 16 December 2019 on board the Queen Elizabeth 2 attended by the top brass Association officers and leading officials from member companies.

ver 250 logistics and supply chain professionals drawn from a cross section of the industry attended the 31st NAFL General Assembly Meeting on 16 December 2019 in the splendid Queen’s Room of the Queen Elizabeth 2 now moored permanently and in tranquility at Dubai’s Mina Rashid Marina. Following welcome remarks by Nadia Abdul Aziz, President NAFL and Vice President –FIATA, the assembly was given the brief lowdown on the activities of the Association over the last calendar year. Also in attendance was Mr. Kevin EnnisVP of Dnata Cargo, Mr. Abdulla Bin KhediyaDirector of Dubai Civil Aviation Authority (DCAA) and Ms Meitha Bakhit-CEO of Airlink - new NAFL Board member. The advocacy and representational initiatives of the Association and benefits of membership were also highlighted as were the reforms and protection of the interests of member-companies and the generic interest at large at the national level. The lineup of a triad of Board Member speakers included Praveen Chandrasen, Chairperson, Air Freight Sub-Committee; Sudesh Chaturvedi, Chairperson, Sea Freight Sub-Committee and Ibrahim Abu Zayed, Chairperson, Land Freight Sub-Committee. Also addressing the gathering was Miraz Moosa and Harish Menon from dnata; Mazen Al Homsi from IATA and Abhinay Chaudhary from Fero DWC who spoke on technology trends in the business. Revellery, networking and a sumptuous dinner followed the speeches where members had the opportunity to mingle and bond with peers and other industry officials. Truly a evening to remember as attendees soaked in business and heaps of good-natured fun! n

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National Association of Freight & Logistics (NAFL)

Join our NAFL/ FIATA network to enhance and grow your Local and International business.

For membership details, please contact Shankar on Tel: +971507802631 or email â&#x20AC;&#x201C; Shankar@nafl.ae

JANUARY 2020 31

National Association of Freight & Logistics (NAFL)

32 JANUARY 2020

National Association of Freight & Logistics (NAFL)

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World Future Energy Summit (WFES) 2020—Preview

Artificial Intelligence is the Key to the Sustainable Economy A New Report for the World Future Energy Summit predicts ‘AI’ will boost global GDP by US$ 5.2trillion

rtificial Intelligence (AI) will be a key enabling technology in achieving renewable energy and sustainability targets, according to a recent report ahead of January’s 2020 World Future Energy Summit. The report, ‘Artificial Intelligence: Transforming the Future of Energy and Sustainability,’ is based on a comprehensive literature review of AI’s predicted impact – compiled from almost 70 separate consultants’ reports, journal articles, news articles and analyses, and government documents. It shows AI will be the common factor in sustainability improvements across a wide range of industries, acting as the enabler of other innovations. Current predictions from PwC suggest that by the end of the next decade, using AI for environmental applications could unlock a US$ 5.2tn contribution to the global economy, and at the same time reduce greenhouse gas emissions by 4 percent.

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Key issues under scanner At the Abu Dhabi Sustainability Week’s anchor conference, the Future Sustainability Summit, running from 14-15 January 2020, a major topic will be how advances in AI, Big Data, and the Internet of Things (IoT) can accelerate sustainable development. During the Future Sustainability Summit, attendees can attend engaging presentations on technology and sustainability, such as ‘Renewable Energy and Energy Efficiency Meet AI & Smart Grids’ and ‘It’s All in the Algorithm: Artificial Intelligence Leading Us to a Greener Planet’. “AI has the potential to accelerate sustainable development in many different ways,” asserted Dr Alexander Ritschel, Head of Technology at Masdar. “AI can support applications such as battery storage which are helping to integrate variable power sources such as wind and solar more effectively into our electricity grids,” he continued. “The World Future Energy Summit provides an unparalleled global platform to examine the full impact of AI on sustainable development and to participate in this rapidly emerging sector,” Dr. Ritschel added.

AI Can Transform Smart Cities and Industry Verticals Smart cities that leverage emerging technologies such as AI can transform industry verticals and resident experiences, and also enhance cyber resilience for critical national infrastructure. For water use, AI can contribute to better infrastructure, tackles water wastage at source, and helps lower end consumption – such as by enabling smart farming. In energy, AI can help to manage supply and demand more efficiently, and align energy production, distribution and use more effectively through smart grid technology. For waste management, AI could supercharge the industry’s ability to separate different materials for recycling, an important step towards achieving the circular economy. AI can also reduce the volume of waste produced – such as for food waste – by better matching how much we use and how much we buy. The World Future Energy Summit, hosted by Masdar as part of Abu Dhabi Sustainability Week, a global platform for accelerating the world’s sustainable development, will be held at Abu Dhabi National Exhibition Centre (ADNEC), from 13-16 January 2020. n

Innovating Business & IT

DP World

DP World on a roll despite trade headwinds

DP World is well on track, cruising well towards its targeted goals, despite challenges emanating from a global economic slowdown, geo-political tensions and trade-and-tariff disputes between top economies among a host of other hot-button issues, affirms Mohammed Al Muallem, CEO & Managing Director, DP World, UAE Region, in an exclusive interview.

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DP World

rom its Spartan beginnings in 1972 in Dubai’s Mina (Port) Rashid, DP Word has risen Phoenix-like, morphing and evolving successfully from ports operator to global trade enabler and empowerer and one of the world’s largest corporate maritime entities. Today, DP World, one of the standout names in worldwide maritime trade facilitation, operates in over 150 countries and employs over 50,000 in every continent. Consistent with its role as equipper of international trade, DP World portfolio transcends beyond its the operations of ports and terminals to the running and management of industrial parks to economic and free-trade zones in addition to offering a full suite of maritime, marina and cruise tourism services. DP World is today a pre-eminent name to reckon with in global trade, a dominant name in the supply chain providing infrastructure, ingenious sand associated solutions. Global Supply Chain engaged expansively with Mohammed Al Muallem, CEO & Managing Director, DP World, UAE Region, for the low down on the operations, on-going developments and outlook from one of the world’s leaders in the global supply chain domain whose growth over the past over four decades has been phenomenal and exponential. Global Supply Chain (GSC): DP World’s H1-2019 financial results look good with earnings for the period up 27% over the corresponding period in 2018? What do you attribute this to? Mohammed Al Muallem (MAM): DP JANUARY 2020 35

DP World

World’s strong financial performance in H1-2019 highlights the strength of our portfolio. Our container volume growth in the H1-2019 was broadly stable as robust growth in Asia Pacific, Indian Subcontinent and Africa was offset by weaker volumes in the UAE and Australia. However, our ports and terminals profitability remained strong and it is worth noting that despite weaker volumes at Jebel Ali, our like-for-like container revenues in the Europe Middle East and Africa region increased year-on-year as we focused on higher margin cargo, once again highlighting the strength of the portfolio. Our portfolio focused on high value cargo and faster growing markets has delivered consistent financial performance and we aim to retain the shape of our portfolio that has a 70% exposure to origin and destination cargo and 75% exposure to faster growing markets. GSC: How did DP World maintain its resilience despite global trade tensions, recession, trade wars and tariffs?

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MAM: We have continued to make progress on our strategy to become a trade enabler and solutions provider as we look to participate across a wider part of the supply chain. To this end we have invested significantly across our Ports, Logistics & Maritime Services businesses. The aim is to connect directly with customers to offer logistics solutions and remove inefficiencies in the supply chain to accelerate trade. Our balance sheet remains strong, and we continue to generate cash flow, which gives us the ability to invest in the future growth of our current portfolio. GSC: In general terms, how have technologies been harnessed to its advantages by DP World as a trade enabler? MAM: Innovation is in our DNA and technology drives our business. DP World aims to be among the world’s foremost providers of data-driven digital, end-to-end supply chain solutions. At Jebel Ali Port we use cutting edge technologies such as automation, IoT, and cloud computing to drive efficiency and

increase productivity. Our container terminals are among the most sophisticated, equipped with remotecontrolled quay cranes (STS), automated gantry cranes and Internal Transfer Vehicles (ITVs) and gate operations. Our digital transaction platform Dubai Trade off¬ers integrated digital solutions for trade and logistics, including, port, customs and free zone. Dubai Trade offers document clearance, customs processing and payment services. Our integrated technology platforms deliver savings in cost, time and resources for our customers. Our strategic dialogue with customers is dominated by the potential of digital technology to revolutionise supply chain management. This is a high priority for many in the logistics industry. Our digitalisation strategy is in step with the rest of the UAE. Dubai has taken the lead towards transforming itself as a ’City of the Future’ and is working towards becoming the world’s first ‘Blockchain City’ by the year 2021. The ‘Emirates Blockchain Strategy’ aims

DP World

‘Emirates Blockchain Strategy’ aims to make the UAE sector paperless by digitizing 400 million documents, saving of US$ 3 billion and 77 million working-hours to make the UAE’s government and other sectors paperless by digitizing 400 million documents, saving of US$ 3 billion and 77 million working-hours through a digital ledger that automatically records financial transactions and bureaucracy. GSC: What implications did the acquisition of P&O Maritime Services and Topaz Marine & Energy have for DP World? MAM: We believe DP World’s acquisition offers greater scale for P&O Maritime services, a business which has delivered steady and growing EBITDA (earnings before interest, taxes, depreciation and amortization) in recent years. Similarly, Topaz Marine & Energy has long-term contracts with strong revenue visibility and we expect it to deliver consistent earnings in the coming years. Importantly, Topaz brings strong relationships with major oil companies that we aim to cement further and a strong presence in the Caspian Sea which is strategically important for the Belt and Road initiative and we aim to develop trade in a market that will be a gateway that connects Europe to Asia. Going forward, we aim to integrate our new acquisitions and deliver synergies with the objective of providing smart end-to-end solutions, which will improve the quality of our earnings and drive returns. GSC: Are there any further mergers and acquisitions on the cards?

MAM: Acquisitions and mergers are part of our growth strategy and in our efforts to diversity our portfolio of operations, which currently number over 150 globally, spread across 46 countries, with a significant presence in both high-growth and mature markets. GSC: Overall, which are your three top performing regions worldwide? MAM: DP World handled 17.7 million TEU (twenty-foot equivalent units) across its global portfolio of container terminals in Q3-2019, with gross container volumes growing by 1.1 % year-on-year on a likefor-like basis. Growth in our Asia-Pacific Region remains robust, followed by Europe, Middle East & Africa Region, and the Americas and Australia Region. DP World’s container volume growth in the H1-2019 was broadly stable as robust growth in Asia Pacific, Indian Subcontinent and Africa was offset by weaker volumes in the UAE and Australia. However, our ports and terminals profitability remained strong and it is worth noting that despite weaker volumes at Jebel Ali, our like-for-like container revenues in the Europe Middle East and Africa region increased year-on-year as we focused on higher margin cargo, once again highlighting the strength of the portfolio. GSC: Talk to us about your technologydriven Smart Courts? MAM: Smart Courts is a simple yet qualitative leap for our free zones’ legal and judicial processes.

Mohammed Al Muallem, CEO & Managing Director, DP World, UAE Region The Virtual Reality Smart Court we’ve established in Jafza in association with Dubai Courts handles labour litigations involving companies and their workers operating in the Free Zone and its business units at a dedicated chamber. It opens new horizons to improve the proficiency, effectiveness and speed in the implementation of judgments, orders and judicial decisions The initiative is line with Jafzas’ aim to drive its operations and administrative functions through innovation. This paves the way for a new phase of excellence in line with Dubai’s goal of becoming a ‘Smart City’. GSC: DP World has collaborated with Indian businesses to create the UAEIndia Bridge. Please elaborate? MAM: The ‘India-UAE Bridge’ is a multiphased campaign across the length and breadth of India to attract Indian businesses and industries to Jafza. A unique new feature of this drive is the launch of DP World Indian Traders’ JANUARY 2020 37

DP World

Incubation Centre launch at Jafza One to serve as a platform for talented Indians looking to share their ideas and businesses to markets in the Middle East and further. The businesses will enjoy the exposure and connectivity to shipping lines and services, through key ports in the region, including Jebel Ali Port, and the strategic incentives and benefits of Jafza. We plan to raise Dubai’s logistical value proposition to Indian investors by integrating DP World’s assets on both sides to deliver support along the supply chain. The e2e solutions delivered under the initiative will support investors through value propositions such as the integration of DP World’s assets in both countries, enhancing access to markets beyond the company’s network connectivity and global portfolio. We have found enthusiastic reception from the Indian business leaders who we briefed on our thoughts. DP World is currently present at six locations in India with over 6 million TEU of gross capacity and also operates warehouses, inland container depots (ICDs) and container freight trains connecting ports to the hinterland. DP World, UAE Region is committed to strengthening these ties through new bridges of trade and economic cooperation that will benefit all and the ‘India-UAE Bridge’ is designed to precisely do that! 38 JANUARY 2020

GSC: Recently DP World unveiled plans to unveil the Traders Market in Jafza. Please comment. MAM: The UAE plays an integral part in pushing forward international efforts to enhance global economic growth due to its strategic location at the center of trade routes connecting East and West. The uniquely designed Jafza Traders’ Market (JTM) with the trader himself at the very heart of the concept aims at creating value added services which are set to harmonize a complete trading cycle. We will be including both wholesale and retail outlets that will help enhance regional and international trade through Jebel Ali on online and offline platforms together. DP World signed the agreement for the 60-million sq feet Traders Markets with China’s Zhejiang China Commodities in April, during the visit to China by the Vice President and Prime Minister of the UAE and Ruler of Dubai, His Highness Sheikh Mohammed Bin Rashid Al Maktoum. The mega project highlights the UAE’s key role as a strategic partner in China’s Belt and Road Initiative. We plan on including showrooms, retail, warehousing, offices, hotels, and residential units. The Chinese partner in the new market, located opposite the Expo 2020 site, will invest US$2.4 billion in using the station to store and ship Chinese products from Jebel Ali to the world.

GSC: DP World has recently embarked on an AED 109 million development of Dubai Maritime City Authority (DMCA). What are the implications? MAM: DMCA, acquired by DP World in 2016-17, is headed on a path of continuous progression through excellence and aims for the nothing less than the number one spot. DMCA’s focus on research and development and innovation to develop integrated logistics programs and advanced infrastructure and legislation is paying off. With such confidence, we are able to ensure the highest standards of efficient maritime operations, occupational safety, and better environmental practices to reach global leadership. One of the major implications is the success of our ambitious plans, supported by our fruitful cooperation with government and private sector partners. We want to continue promoting innovation, technology and sustainability and enhance the international community’s confidence in our futuristic city. GSC: What are the opportunities and challenges for DP World going forward? MAM: Markets conditions in the Asia Pacific and Indian Subcontinent region were generally positive despite the trade war concerns. Our focus on being financially disciplined has served us well over the years and it remains a priority to manage the growth opportunities whilst retaining a strong balance sheet. We will continue to focus on delivering operational excellence and maintaining our disciplined approach to investment to ensure we remain the trade partner of choice. GSC: What is the outlook for DP World for H2-2019? MAM: We are seeing positive signs of progress in our new businesses that give us encouragement for the future. The year 2019 has been dominated by the trade dispute between China and US, and while this has caused uncertainty, it is pleasing to see that container volumes are still expected to grow, albeit in low single digits. Whilst the near-term trade outlook remains uncertain with global trade disputes and regional geopolitics causing uncertainty to the container market, the strong financial performance of the first six months also leaves us well placed to deliver full-year results slightly ahead of market expectations. n

Frost & Sullivan Awards

Best Practices, Innovation and Leadership recognition at the fore

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Frost & Sullivan Awards

rost & Sullivan, a widely recognized leader in the information and growth consulting industry – A Global Growth Partnership Company, has been in the forefront of ushering in transformative changes and working collaboratively with corporations to infuse new and effective ideas and revolutionary initiatives. For over five decades, Frost & Sullivan, has become world-renowned for its role in crafting solutions and help investors, corporate leaders and Governments navigate economic changes and identify disruptive technologies, mega trends and innovative business models. In its constant endeavour to provide

insights into emerging technologies, current trends and challenges, identifying new technologies and global industry analysis and reward companies that successfully implement applications, Frost & Sullivan hosted its latest fifth edition of its eponymous ‘Middle East Best Practices Awards’.

Glittering event The glittering event entitled ‘Best Practices, Innovation and Leadership Recognized at Frost & Sullivan’s 2019 Middle East Best Practices Awards Banquet’ was held on 11 December 2019 at the Atlantis-The Palm in Dubai. JANUARY 2020 41

Frost & Sullivan Awards

Award Recipients at the 2019 Middle East Best Practices Awards Banquet

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UAE Smart Agriculture Technology Innovation – Pure Harvest Smart Farms UAE Plant-based Alternative Protein New Product Innovation – Global Food Industries GlobalSmart City Solutions Visionary Innovation Leadership – Ramboll Group UAE Network Security Company of the Year – Fortinet UAE Managed Security Services Provider Company of the Year – Help AG Middle East Middle Eastern Managed Infrastructure Services Company of the Year – Tech Mahindra UAE B2B Fintech Company of the Year – Eureeca UAE B2C Fintech Company of the Year – Yallacompare UAE Data Center Services Company of the Year – Etisalat UAE Waste Management Enabling Technology Leadership – Bee'ah UAE Waste Management Services Customer Value Leadership – DULSCO Middle Eastern Process Automation Company of the Year – Yokogawa Middle East UAE Facility Management Services Industry Customer Value Leadership – Enova Middle Eastern Water and Wastewater Pumps Customer Value Leadership – Grundfos Gulf Distribution UAE Aluminum Extrusion Company of the Year – Gulf Extrusions GCC Car Sharing Providers Company of the Year – Ekar UAE UAE Automotive Service Provider Growth Excellence Leadership – Zdegree GCC Passenger Vehicles Service Enabling Technology Leadership – Open Bonnet GCC Electric Vehicles Visionary Innovation Leadership – General Motors Middle East KSA Vehicle Servicing Growth Excellence Leadership – Petromin Corporation GlobalMulti-modal Transport Integrator Technology Leadership – Thales International Middle East UAE Logistics Service Provider Company of the Year – Al-Futtaim Logistics UAE Temperature Controlled Warehousing Services Company of the Year – Global Shipping & Logistics (GSL) UAE e-Commerce Logistics Service Provider Company of the Year – DHL Express UAE GCC Road Transportation Load Matching Platforms Entrepreneurial Company of the Year – Load-Me KSA Logistics Service Provider Company of the Year – Al Majdouie Logistics Company KSA Customer-centric Warehousing Solution Provider Company of the Year – Hala Supply Chain Services KSA E-Commerce Personalized Delivery Solution Customer Service Leadership – SMSA Express GCC Warehouse Management Robotics and Automation Solutions Provider Enabling Technology Leadership – Swisslog GCC Technology-driven Delivery Solutions for the CEP Entrepreneurial Company of the Year – Fetchr GCC Road Transportation Fleet Monitoring Solution Enabling Technology Leadership – Location Solutions MENA Healthcare Information Technology Visionary Innovation Leadership – Saudi Telecom Company UAE Tertiary Care Hospital of the Year – Burjeel Hospital (A unit of VPS Healthcare) UAE Medical Tourism Company of the Year – Al Zahra Hospital Dubai UAE Ophthalmology Services Company of the Year – Moorfields Eye Hospital Dubai UAE Hospital Infrastructure of the Year – King’s College Hospital London, UAE UAE Cardiac Sciences Hospital of the Year – Burjeel Hospital (A unit of VPS Healthcare) UAE Mother & Child Care Hospital of the Year – NMC Royal Women’s Hospital, Abu Dhabi, UAE UAE Orthopedics Hospital of the Year – NMC Royal Hospital MEASA Identity & Access Management Technology Innovation – Uniken

The well-attended occasion drew the biggest industry names from among forty corporate recipients and recognized companies for their innovation, leadership and their ability to generate world-class performance within their industries. The Awards programme served as a platform to recognise companies driven by visionary growth, innovation, and leadership that will catalyse and transform industries in the near future. Frost & Sullivan’s Best Practices Awards is a Global Programme recognising companies across regional markets for 42 JANUARY 2020

demonstrating outstanding achievement and superior performance in areas such as leadership, technological innovation, customer service, and strategic product development among other parameters.

Rigorous examination Based on its regular market tracking and assessment, Frost & Sullivan analysts compare market participant performance on various parameters through in-depth analysis to identify best practices. “The Middle East Best Practices Awards

are a measure of bold leadership, visionary strategies and willingness to look beyond the safe to the truly transformational. Award recipients are industry front runners in every sense of the term; forging new benchmarks, finding exciting ways to deliver products and services, and redefining the terms of business engagement,” said Sarwant Singh, Managing Partner, Frost & Sullivan. “This year we have added more categories and Awards as we witnessed various changes in the region and saw some exceptional performers and achievers

Frost & Sullivan Awards

For over five decades, Frost & Sullivan, has become world-renowned for its role in crafting solutions and help investors, corporate leaders and Governments navigate economic changes and identify disruptive technologies, mega trends and innovative business models.

despite the slowdown. It is very heartening to see companies and individuals show tremendous resilience, leadership and innovation, which are what we seek to identify and honour,â&#x20AC;? affirmed Amol Kotwal, Senior Director, Frost & Sullivan.

Categories This year, forty Awards were presented across seven industry verticals: Transportation & Logistics; Healthcare; ICT; Industrial; Mobility; Chemicals, Materials and Nutrition and Metals & Minerals. These Awards followed a rigorous measurement-based methodology to select recipients in each category. These companies showcased exceptional accomplishments and demonstrated superior performance in areas of leadership, technological innovation, customer service, strategic product development. n JANUARY 2020 43

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LogiPoint — Saudi Arabia

Leading the way to a new logistics landscape LogiPoint set for phenomenal expansion, buoyed up by Saudi Arabia’s farsighted ‘Vision 2030’ ambitions LogiPoint has been in the forefront in transforming Saudi Arabia’s maritime, logistics and supply chain, a vital stakeholder and player in supporting the endeavour to boost the Kingdom’s capabilities of becoming a major logistics hub serving the global markets.

LogiPoint — Saudi Arabia

ogiPoint, operating a network of integrated Logistics Parks and notably the first and largest bonded and re-export zone Saudi Arabia, is all set to expand its investment base in the Kingdom by building capacities and broadening its presence and services in 2020. 2020 is slated to become a turning point year for LogiPoint as we seek to enlarge our footprint, widen product offerings and expand operations across Saudi Arabia. Our strategy envisions the provision of a high degree of professionalism, high efficiency, high performance standards, streamlining systems, developing our IT infrastructure, building capacity and portfolio of services. The multi-award winning LogiPoint is a subsidiary of Saudi Industrial Services Co– SISCO, a joint stock company listed on the Tadawul, the country’s Stock Exchange. Thanks to rapid takeoff, the company is witnessing heavy demand for its warehousing solutions, both for pre-built and for the ‘Built-to-Suit’ facilities. According to LogiPoint, this projected and cascading demand will drive LogiPoint’s investments to acquire additional warehousing space of about 55,000sqm and add substantially to the number and capacity of the warehouses.

Growth plans LogiPoint further elaborated that in its quest to extend across the Kingdom, LogiPoint will invest considerably in developing new state-of-the-art Logistics Parks and completing outstanding construction projects in the Jeddah Logistics Hub in 2020.

The company has recently signed a long-term agreement with Aramex, a leading global provider of comprehensive logistics and transportation solutions, for the construction of ‘Build-to-Suit’ facilities for Aramex’s Western Province ground operations. LogiPoint currently has a total of 72,000sqm multipurpose warehousing area customised to client needs, fully equipped with sophisticated features such as: round-the-clock temperature monitoring with remote alert and battery back-up; redundant HVAC systems to ensure continuous operation; security systems with video surveillance and alarms; epoxy-sealed floors to ensure dust-free environment; full GMP and GDP compliance; pest control procedures; quality control processes and many more. In addition, new buildings of about 55,000 sqm are being built, which will be ready in 2020-21.

Advantage of LogiPoint Bonded and Re-Export Zone Located in Jeddah Islamic Port, the busiest commercial port and leading gateway to the Kingdom, the one million sqm Bonded and Re-Export Zone provides services such as lead-logistics, trucking, warehousing, port services, turnkey supply chain integration from the port terminal to the distribution center, specialised handling, labeling and co-packaging. LogiPoint ensure a seamless and smooth logistics operation for goods transportation into and outside the warehouses for all clients by providing professionally trained personnel who are equipped with all necessary equipment and supported by custom-built IT infrastructure. This helps ensure reliable and consistent levels of efficiency across all operations at all times for all the clients,” . Meanwhile, as developers of logistics zones and parks, LogiPoint “Logistics Park Modon Jeddah” has completed the Phase 1 and has begun handing over units to clients. The company’s Logistics ParksModon 1 is spread over 120,000 sq m, located in the heart of the Jeddah Industrial Area, and close to the Jeddah Islamic Port, and the Logistics Parks South Jeddah, is spread across 662,900 sq m and located in Al-Khumra (the second largest logistics hub in the Kingdom). 47

LogiPoint — Saudi Arabia

LogiPoint enters strategic partnership with Aramco for petrochemicals exports from Kingdom Stakeholders Jeddah Islamic Port and Saudi Customs will re-structure and facilitate the export processes In a major milestone accomplishment, LogiPoint recently concluded a key agreement with Aramco Chemicals Company (ACC). With extensive support from stakeholders Saudi Customs and Jeddah Islamic Port, the country’s principal and busiest port, to reengineer the export processes, this agreement provides ACC with a strategic export logistics hub. Furthermore, this helps eliminate the need to use an intermediary overseas hub for storage and onward shipping of their cargoes therefore enhancing its ability to provide cost-effective solutions. The cargo is then dispatched directly to the target market, ensuring efficient services and reduction of the export processing time from one week to one day thereby increasing the demand and appeal for Saudi products. This agreement is aligned with the ‘Saudi Vision 2030’ and the ‘National

Industrial Development and Logistics Programme’ (NDLIP) under the supervision of the Saudi Logistics Hub, which seeks to develop the Kingdom’s economic growth beyond dependence on the oil industry. It promises to open new doors and economic opportunities within the Kingdom, providing Saudi-based companies with expanded access across the GCC and wider Middle East region, in addition, international exposure and expanded opportunities to do business globally. Saudi Customs has affirmed its commitment toward continually developing its procedures and ensuring they are in line with the highest global standards on both the technological and operational fronts. It is also dedicated to maintaining cooperation with all the relevant entities to ensure the advantage of harnessing Saudi Arabia’s strategic location in

connecting the world’s continents. The first and largest Bonded and Re-Export Zone (BRZ) spread over 1mn sqm. in Jeddah, is an example of the type of world-class, customer-centric integrated logistics service area that LogiPoint has pioneered in the Kingdom giving the advantage to its clients to reliably save up to eight days shipping via Jeddah and to re-export without needing to pay customs. LogiPoint has made specific and special efforts to introduce international concepts towards logistics efficiency to attract international investors. LogiPoint’s premium location and the world class facility located in Jeddah Islamic Port has made it a major logistics hub in the region providing services such as lead-logistics, trucking, warehousing, port services, turn-key supply chain integration from the port terminal to the distribution center, specialised handling, labelling and co-packaging.

LogiPoint — Saudi Arabia

how it can bring greater new efficiencies, cost savings and better profits to their business. The Regional exporters can now avail our value-added services to serve their export markets in the Mena region and beyond when they use LogiPoint as their regional logistics hub.

Strategic Alliances

2020: Our focus will remain on offering second to none services to our customers by investing in building our capacity and IT infrastructure. From starting out as Saudi Arabia’s first bonded and re-export zone (BRZ), how has LogiPoint transformed the Saudi maritime and supply chain landscape over the last 20 years.

e-commerce giants, as well as leading local service provider Naqel. Both signed up with LogiPoint to develop their supply chain solutions for the burgeoning Saudi market.

Pioneers

Innovative Services

LogiPoint prides in being pioneers in the conceptualization and introduction of bonded and re-export services in the Kingdom. By closely interfacing with the industry stakeholders and other Government institutions like the Ports and Customs Authorities in addition to other logistics service providers, LogiPoint have enabled and empowered the Saudi supply chain sector to bring about far-reaching changes in the manner we serve our local and the international clients. The year 2019 has been fruitful for LogiPoint with many accomplishments. The company signed an agreement with Aramco Chemicals Trading Company to become the strategic export logistics hub for the world’s leading petrochemicals organisation. On the other hand, with an eye on the future, LogiPoint emerged as the strategic logistics partner for one of the global

One of the landmark new services that LogiPoint introduced last year was the cross-border multimodal movement for shipments into the GCC. Eastbound shipments from the Western origins can now be discharged in Jeddah and moved via bonded trucking to their final destinations in the GCC. This helps reduce the transit time for the imports into the region by approximately seven to 10 days and introduces unprecedented efficiencies for the regional logistics sector. On the flip side, Westbound shipments originating from the East can now be discharged on the regional ports in the Arabian Gulf on the East, and moved under bond to Jeddah for onward multimodal movement to final destinations in Africa, Europe and the Americas. LogiPoint is constantly re-evaluating its value-added services for its clients to see

LogiPoint works extensively with industry stakeholders to explore new facilities and solutions for its clients. These collaborations happen with local as well as international stakeholders and include leading international shipping companies, ports and customs authorities as well as Saudi airports. This is especially important for developing LogiPoint as a corridor for integrated sea-air shipments. Some of LogiPoint’s planned alliances and joint ventures focus on International Freight Forwarders’ Networks which have thousands of members across the world, and which are looking to facilitate their members when it comes to doing business in and through the Kingdom.

Targets 2020 is set to be the year when we take our expansion plans to the next level. LogiPoint will look to expand their footprint across the Kingdom with the logistics parks and zones, while they grow with the needs of the sectors and clientele they serve. LogiPoint focus will remain on offering the best services to the customers by investing in building the capacity and IT infrastructure. LogiPoint’s contribution to the Saudi market has been remakable. Twenty years ago, when it commenced operations, the bonded zone was an unfamiliar concept to the logistics industry in the Kingdom. Today, the industry is able to plan, develop and deliver highly sophisticated logistics solutions to the market because of the initiatives the company has been pioneering and introducing over the years. In this way, LogiPoint has attracted extensive new investments into the Kingdom, enabling the freight forwarding and logistics industry to offer cost-effective and efficient services to the market. LogiPoint continue to see their role as one of making active contribution to the ‘Saudi Vision 2030’ through enabling the logistics and supply chain industries. n 49

Abu Dhabi Ports

Abu Dhabi Ports to boost Khalifa Ports’ handling capacity CSP Abu Dhabi Terminal now fully operational Abu Dhabi Ports closed 2019 with impressive yearto-date results and recording-breaking milestones, underlining the company’s continued contribution to the UAE’s non-oil GDP.

fter seven record years of operational growth, Abu Dhabi Ports’ flagship Khalifa Port is set for further expansion, the company revealed recently. Abu Dhabi Ports will invest AED 2.2bn (US$ 600mn) in the development of South Quay and Khalifa Port Logistics, as well as AED 1.6bn (US$ 436mn) expansion at Abu Dhabi Terminals. The South Quay development which will be completed by Q1-2021 is composed of a three km quay-wall with 18.5m along-side draft for general cargo, Ro-Ro and bulk usage. It will also include eight berths, and 1.3mn sqm of terminal yard. The Khalifa Logistics expansion, for multi-purpose usage, will encompass a 3.1km quay wall with 8m draft, 15 berths and land plots, which can be tailored to individual customers.

Phased expansion Phase 1 of the South Quay expansion will be completed by Q4-2020, while Phase 2 and the Khalifa Logistics expansion will be completed by Q1-2021. These two expansion projects will create more than 2,800 direct and indirect jobs and contribute more than AED 3.2bn to the emirate’s GDP by 2025. The expansion at ADT will include an extension of the quay from 1,400 to 2,265m and an addition of 10 new ship-to-shore quay cranes — effectively doubling ADT’s handling capacity from 2.5mn to 5mn TEUs. Additionally, the new investment will include significant technological 50 JANUARY 2020

Abu Dhabi Ports

advancements, such as fully automated truck loading and discharge. With this capacity expansion project in place, Khalifa Port will see its container handling capacity jump from current 5mn to 7.5mn TEUs, which sets it firmly on the path towards its 9Mn TEU milestone over the next five years.

CSP Abu Dhabi Terminal now functional Furthermore, after only one year, CSP (COSCO Shipping Ports) Abu Dhabi Terminal has now shifted from its trial

operation phase to being commercially fully operational. The deep-water, semi-automated container terminal includes the largest Container Freight Station in the Middle East and positions Abu Dhabi as the regional base for COSCO’s global network of 37 ports. “Through strategic collaboration with partners and top industry players, such as ADT, MSC, China’s CSP, and Autoterminal Barcelona, Khalifa Port is developing in a sustainable manner and has become one of the fastest growing ports in the world,” remarked Capt. Mohamed Juma Al Shamisi,

Group CEO, Abu Dhabi Ports.

Among Top 40 “The latest investment will see ADT take its place among the top 40 largest container terminals in the world, and positions us well for future growth,” stated Ahmed Al Mutawa, CEO, Abu Dhabi Terminals (ADT). “COSCO continues to view Abu Dhabi as a logistics and trade hub of tremendous strategic global importance, as its location bridging East and West thereby making it an important point along Belt-and-Road track in the region,” observed Nasser Al

JANUARY 2020 51

Abu Dhabi Ports

Khalifa Port’s container handling capacity aiming towards 9Mn TEU milestone over the next five years.

Abu Dhabi Ports closes strong in 2019 Busaeedi, Deputy CEO, CSP Abu Dhabi Terminal. “The South Quay and Khalifa Logistics expansion delivers enormous competitive advantage for Khalifa Port and KIZAD, as industrial producers and cargo owners shipping to global markets value deep-water access and the ability to base operations on prime land in investor-friendly Abu Dhabi,”noted Mohamed Eidha Tannaf Al Menhali, Acting Director, Khalifa Port. Halifax Port currently serves more than 25 shipping lines, offers direct links to 70 international destinations, and boasts an intermodal transport network facilitating efficient transportation and logistics across sea, road, and air.

Link to Etihad Rail Featuring state-of-the-art maritime infrastructure, including 23 (current) of the world’s largest ship-to-shore quay cranes, Halifax Port will be the first in the UAE to be linked to the new Etihad Rail network, which is currently under construction. With the ability to serve the largest ships at sea, and flexibility for future expansion, the port currently allows the handling of all of Abu Dhabi’s container traffic with a current annual capacity of 5Mn TEUs. When all development phases are completed, Halifax Port is expected to increase its capacity for container volumes to 15mn TEUs by 2030. 52 JANUARY 2020

Ports network collectively handled over 20mn tonnes of general cargo Two of Abu Dhabi Ports’ standout milestones were achieved in the eleven months spanning from January to November 2019. During the period, the company handled more than 20mn tonnes of general cargo across all ports, surpassing its 2018 full-year performance of 19.7mn, while its container handling performance reached 2.5mn TEUs, surpassing the 1.7mn TEUs result for entire 2018. These achievements were bolstered largely by the growth in cargo handling performance at both Mustafa Port and Halifax Port. From January through November, the former reported a 300 percent year-on-year increase, while the latter saw a 25 percent growth year-onyear. Container throughput at Halifax Port also rose by 63 percent year-on-year during the same period.

Milestone attained

Over the course of the year, another impressive result was reached in August, when during a single month, Abu Dhabi Ports handled 2.5mn tonnes of cargo, representing a new monthly cargo throughput record for the company. These banner results are a reflection of a growing global customer demand, enabled by Abu Dhabi Ports’ major capacity expansions and a diverse portfolio of services offered across its eleven ports and terminals. Zayed Port’s cruise operations also

reported substantial growth during the January to November period. Growing in popularity since its launch back in 2015, the port’s Abu Dhabi Cruise Terminal posted a year-on-year increase of 47 percent in terms of visitor numbers, while vessel calls jumped by 51 percent, easily surpassing 2018 figures for the whole year.

Evolution: Port operator to trade catalyst

“Our strong 2019 performance to-date reflects our commitment to move beyond our traditional role as a port operator and towards strengthening our contribution as a facilitator and enabler of industrial and global trade,” explained Captain Mohamed Juma Al Shamisi, Group CEO of Abu Dhabi Ports. The start to the final quarter continued to build upon Abu Dhabi Ports’ successes reported in the first half 2019, which saw a 10 percent year-on-year increase in general cargo across all ports, reaching 9.7mn tonnes; as well as an 82.4 percent year-onyear increase in container volume, reaching 1.1mn TEUs. The company’s strong third quarter was highlighted by a 9 percent year-onyear increase in cargo handling across its entire portfolio. Abu Dhabi Ports, which operates ports and terminals across the UAE and internationally, as well as KIZAD, is one of the country’s leading facilitators of trade and investment. n

Saudi Arabian Logistics

Saudia launches new entity for logistics services across the Kingdom’s airports

nder the patronage and presence of HE, The Saudi Arabian Minister of Transport, Saleh Bin Nasser Al-Jasser, the state-owned Saudi Arabian Airlines (Saudia) recently launched the Saudi Arabian Logistics (SAL) Company, the new independent entity within the Saudia Group which will act as the main cargo gate and ground handling and logistics services hub across the Saudi airports. The launch was announced in a grand ceremony held in Riyadh and attended by the Governor of the Saudi Customs Authority Ahmad Al-Haqbani; Abdulhadi Al-Mansouri, President of the General Authority of Civil Aviation (GACA); Anef Abanomi, President, Saudi Post; Sami Sindi, Director General, Saudi Arabian Airlines (Saudia) and the directors and officials of multiple government agencies working at Saudi airports, CEOs of the companies and the strategic units of the Saudia, cargo and aviation transport experts. Fawaz Al-Fawaz, Chairman of SAL Board, delivered the keynote address underscoring SAL logistics goal and its pivotal role in achieving the Vision 2030 objectives. Al-Fawaz thanked everyone who had a contributory role in founding the company, which will usher in a new logistics era keeping up with the growth and development across the precious Kingdom.

SAL brand identity Following the speech, Eng. Al-Jasser announced the official launch of the SAL brand into the world of logistics services. Omar Talal Hariri, CEO, SAL, thereafter delivered a speech and played a short video explaining the SAL goals and brand identity. “SAL aims to provide integrated logistics operations and ground handling services. It acts as a link between land and sea shipping and the Saudi airports in line with the National Industrial Development and Logistics Programme, one of the pivotal 54 JANUARY 2020

The establishment of the new institution will facilitate streamlined movement of cargo and airport related baggage services and for the long term, help to promote new investments in the Kingdom’s logistics sector. It is hoped that the country’s strategic location will serve as a logistics hub for global cargo operations

Saudi Arabian Logistics

HE Engr. Saleh Bin Nasser Al-Jasser - Minister of Transport and Chairman of the Saudi Logistics Hub.

JANUARY 2020 55

Saudi Arabian Logistics

Saudi Arabia jumps 72 global positions in ‘Trading across Borders’ WB ranking The Saudi Logistics Hub initiative to make import and export logistics more convenient and business-friendly Saudi Arabia has been ranked as the world’s top ease of doing business improver by the World Bank Group’s Doing Business 2020 report. The report indicates Saudi Arabia to have jumped 72 global positions in ‘Trading Across Borders’, an indicator which compares the time and cost of exporting and importing goods. These improvements follow a raft of legislative reforms implemented by Saudi Logistics Hub —a government initiative established to drive growth in Saudi Arabia’s logistics sector. Reforms include the reduction of customs clearance from seven to ten days to 24 hours, the reduction of the manual inspection rate at Customs from 89 percent to 48 percent, and the reduction of the number of documents required to import from 12 to 2 and to export from 8 to 2. These critical reforms facilitate Saudi Arabia’s drive to be positioned as one of the world’s most dynamic logistics hubs.

Driving efficiency and competitiveness

HE Eng. Saleh Bin Nasser Al-Jasser, Minister of Transport and Chairman of the Saudi Logistics Hub, affirmed that the recognition of Saudi Arabia’s progress by the World Bank confirmed the Kingdom’s sustained efforts to drive efficiency and competitiveness in the country’s logistics sector. “The Saudi Logistics Hub is now inviting foreign investors and business partners to join our ambitious journey to consolidate Saudi Arabia’s status as a leading logistics hub,” he asserted. Recently, the Saudi Logistics Hub announced a US$ 35bn capital expenditure plan to transform Saudi Arabia into a global logistics center.

56 JANUARY 2020

Following the move, the top brass of the Saudi Logistics Hub set out on a twomonth global roadshow, with a final stop in Germany in January 2020, to further promote investment opportunities in Saudi Arabia’s logistics industry. The global itinerary included the UAE, Jordan, Egypt, China, Japan, Singapore, India, and Germany through which the government entity was able to successfully create a strong awareness about Saudi Arabia’s logistics sector.

Kingdom’s investment in the logistics sector

Over the last 10 years, the country has invested more than US$ 100bn into transport and logistics infrastructure, creating a comprehensive nationwide network. These impressive reforms are encouraging foreign investors to take part.

Saudi Arabia has been ranked as the world’s top ease of doing business improver by the World Bank Group’s Doing Business 2020 report. The global roadshows witnessed successful meetings with Pantos Logistics, Samsung SDS in Korea, and PSA International in Singapore, as examples, which demonstrated Saudi Logistics Hub’s keenness to drive foreign partnerships across the Kingdom. With 12 percent of global maritime trade passing through the busy shipping lanes of the Red Sea, Saudi Arabia aims to leverage its strategic location

at the crossroads of three continents to increase export and re-export capacity, driving private sector participation in the industry. Transformation across the sector has already resulted in a 47 percent increase in the number of new foreign transport and logistics companies establishing operations in Saudi Arabia in 2019. Saudi Arabia now boasts one of the fastest-growing logistics sectors globally, valued at US$ 19bn and ranked third most attractive within emerging markets. As the world’s 18th largest economy and next host of the G-20 in 2020, the country aims to increase the sector’s competitiveness, while also building international synergies to enhance domestic and cross-border trade infrastructure.

A Government initiative

The Saudi Logistics Hub is a government initiative formed by leading transport and logistics entities in Saudi Arabia with a mandate to support growth in the sector and position the country as a strategic gateway at the crossroads of three continents in line with Kingdom’s Grand Vision 2030’s bold ambitions. The Saudi Logistics Hub is transforming Saudi Arabia into a globally competitive and efficient export, re-export, and domestic connectivity platform through enhancing the sector’s infrastructure, processes, procedures, and regulatory frameworks. This will enable logistics players to access one of the fastest-growing logistics markets in the world, benefit from recent reforms that reduce the time and cost of logistics operations and capitalize on specific investment opportunities

Saudi Arabian Logistics

“SAL aims to provide integrated logistics operations and ground handling services. It acts as a link between land and sea shipping and the Saudi airports in line with the National Industrial Development and Logistics Programme” themes of the Vision 2030,” observed Hariri. “Now in the light of the gigantic economic transformation the Kingdom has been witnessing. Saudi Arabian Logistics will improve the quality of logistics operations and support the Kingdom’s vision towards transforming the country into a global logistics hub handling all types of cargo and shipping operations,” continued Hariri. The GACA President handed over 150 GACA-regulatory licences to the SAL CEO, that qualifies SAL to officially provide ground-handling services at King Khalid International Airport’s cargo station in the Kingdom’s capital Riyadh.

Saudi Arabia: Logistics Gateway Al-Jasser noted that one of the SAL strategic goals is to invest in the Kingdom’s strategic location as the heart and the

crossroads of key international trade routes between three continents: Asia, Europe and Africa and a distinctive logistical gateway between the East and the West and all over the world. Describing the logistics service sector as vital and strategic, Al-Jasser commended the milestone developments achieved so far and hoped to see more public and private sector partnerships that help support and bolster the comprehensive development across the nation in this prosperous era as well as contribute to achieving the logistic goals of Vision 2030. He hopes SAL will have a noticeable effect on the overall logistics industry. “The unprecedented comprehensive development projects being implemented require all government agencies and the private sector to join forces in order to execute similar projects that help develop logistical services and efficiency,” observed Al-Jasser.

“The government views the transportation sector as pivotal and works to develop it in order to provide the best transportation and integrated logistics services that keep up with the comprehensive development programs. SAL is one of the ambitious initiatives,” the Minister added further.

Boost for Saudia’s ground handling operations Saudia Director General Sami Sindi said SAL will improve the efficiency of logistics operations and ground handling services through integrating land and sea transportation operations and linking them with the Saudi airports in order to enhance logistical services across all stages. “SAL will contribute directly to enhancing and developing the logistics infrastructure including all types of cargo platforms, warehouses and equipment as well as e-commerce cargo and shipping facilities,” Sindi explained. He said SAL will start its business activities in January 2020 and offer highquality logistics and ground handling services in line with the national and development goals. It will also create more economic and development opportunities through forging strategic partnerships with different local and global logistics service providers. n JANUARY 2020 57

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Cargo Theft & Pilferage

Combating the menace of cargo theft The subject of cargo theft and pilferage has dogged and vexed the industry for centuries. Questions abound and the what, who, why, where and how of these lingering problems remain unresolved to this day. It would appear the industry has yet to come to grips with the cause and fallout of this persistent predicament which will it appears won’t go away. Along with an industry core group that convened at a recent roundtable in Germany, our regular contributor, Prof. Omera Khan, Strategic Supply Chain Risk expert, consultant, author and speaker, examines the options and wades through issues that we need to look in the eye and lock horns and tackle firmly and decisively—Editor.

hy do businesses take such a relaxed attitude to cargo theft? What can businesses do to reduce and possibly even eliminate the incidences of cargo theft? Can technology help in the fight against cargo theft? Does the fast pace of technology innovation open businesses up to new sources of cargo theft risk? These and other such questions were central to the theme of an industry roundtable discussion recently held in Düsseldorf, Germany attended by eminent industry officials. Chaired by Risk Intelligence’s Executive Strategy Adviser, Professor Omera Khan, the roundtable brought together luminaries such Richard Wilding, Professor of Supply Chain Strategy at Cranfield School of Management; Shara Galvin, European trade compliance manager at Bloomberg; Thorsten Neumann, Chair of the European arm of the Transported Assets Protection Association (TAPA); Lars Albaek, of cargo crime security advice specialists AL-kon; Ilya Smolentsev, Founder and Senior Security Advisor of RIFT Advisory International and of course Risk Intelligence’s own Hans Tino Hansen, Chief Executive and Founder of the firm. In front of a especially invited audience drawn from some of Europe’s largest

58 JANUARY 2020

businesses, these supply chain experts debated businesses’ conflicted attitudes towards cargo theft and other sources of supply chain risk. Together with contributions from audience members, they discussed the major supply chain risks affecting landbased supply chains today. Among which, of course, cargo theft is highly prominent.

Growing menace Compared to events such as natural disasters, it undeniably has a lower impact. However, its frequency of occurrence makes it worth tackling, especially when taking into account risks associated with cargo theft, such as violent assault on a driver, for instance, or kidnapping, or theft of the entire vehicle, noted Risk Intelligence’s Hansen. For many companies, he pointed out, losses from cargo theft form the greater part of the supply chain risk losses that they experience. The pertinent question is—Why are businesses so complacent about cargo theft? Partly, it is because they see it as inevitable, and something that must be tolerated, said Cranfield’s Wilding. It is a nuisance, in short, but there are more important things to worry about, such as customer engagement.

Prof. Omera Khan

JANUARY 2020 59

Cargo Theft & Pilferage

range now extends for several miles, and cyber-attacks.

An example is a pharmaceutical company that lost two pallets of product worth €42 million—but the real impact on the company was a cost of €250 million. Partly, too, added TAPA’s Neumann, they are focused on other issues and other supply chain metrics—with transport cost and transit times at the top of the list. Short-sightedness is at work, too: the cost of cargo theft is seen as solely the value of the goods stolen, a cost that in most cases dramatically understates the overall impact on the business. “One of our main challenges at TAPA is to make companies aware of the threat of cargo theft, and what it can do to their company,” he observed.“An example is a pharmaceutical company that lost two pallets of product worth €42 million—but the real impact on the company was a cost of €250 million.

Profit erosion Put like that, the company made zero profits for two years as they made up for the loss. But still the company prefers to look at supply chain metrics such as lead times and the level of on time deliveries.” What can companies do to minimise their exposure to cargo theft? Not to mention other sources of supply chain risk? Stop obsessing over costs, and start thinking about risks, argued Cranfield’s Wilding. Stop jumping onto the bandwagon of technology-based solutions, which often over-promise and under-deliver, added Risk Intelligence’s Hansen. Furthermore, stop imagining that supply chain strategies such as near-shoring or re-shoring will somehow magically make the problem go away: near-shoring, for instance, 60 JANUARY 2020

Cyber threats

may in fact make it worse, by replacing sea-borne freight delivered close to home with land-based freight requiring long road journeys originating in Eastern Europe. Instead, work to develop a culture of supply chain risk awareness, supplemented by risk-aware policies and procedures and a focus on compliance, advised Risk Intelligence’s Hansen.

Risk awareness “Without a risk awareness culture, businesses won’t get anywhere. And a risk awareness culture in turn leads to the need for the right procedures and the right policies. That’s because policies and procedures will go nowhere if we don’t have culture to support it,” he lamented. “On top of that comes compliance, in terms of not just financial risk, but also all other types of risk,” he said.“Without these three elements, nothing will change and change will fizzle out somewhere in the middle,” he continued. “Of course it takes time to create a change in culture, so this is not something that happens in 12 months, but maybe more over the course of five years or even longer,” he added. Moreover, the bonus of such a culture, he noted, is that it helps businesses to respond to threats as they evolve—unlike, say, technology-based preventative measures, which tend to safeguard only against the threats that have been ‘hard-wired’ into them. Two cases in point: GSM/GPS ‘jamming’ technology, where the attainable jamming

Cyber-attacks, for instance, were becoming increasingly sophisticated, warned Ilya Founder and Senior Security Advisor of RIFT Advisory International, citing a recent incident in Kosovo, where a cyber-attack had hacked the IT system of a German tobacco company’s customer, to which two truckloads of cigarettes were in transit, on the road. “The criminals in this case didn’t want the goods, they wanted the money which was to be paid for these two loads of cigarettes. Basically, they hacked the IT system of the customer, manipulated the correspondence, produced a forged invoice, and set up a fake company and a bank account in Mexico,” he explained. “People had to move quickly: stop the trucks and send them back to the factory in Germany in order to safeguard the cargo, and stop the transfer of the money,” he observed. Put another way, noted Bloomberg’s Galvin, it was a salutary reminder that when it comes to cyber-attacks, businesses must do more than secure their own systems— they can also be impacted by any breaches of systems elsewhere in the supply chain. A recent hack of a logistics service provider, for instance, saw some irrecoverable data loss, although no in-transit shipments were affected.

Breach fallout “Even so, that data loss later affected a client,” she noted.“The client was undergoing an audit, and couldn’t access their files held at the logistics service provider. This had a huge impact on the relationship between the client and service provider, with a serious breakdown in trust. The logistics service provider was the business that experienced the attack—but the pain was felt at the client.” In short, summed up roundtable chair Khan, as she brought the proceedings to a conclusion, the world is an increasingly disruptive place. Even so, all is not lost. So what is the bottom-line? Resilience is about being prepared, she emphasised— and the best preparation lies in adopting a risk awareness culture. n