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Tuesday, 24 Sep 2024

What We're Tracking Today
Ports
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Egyptian consortium to build USD 450 mn Dekheila dry bulk terminal

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Today at a glance

1

Ports

Egyptian consortium to build USD 450 mn Dekheila dry bulk terminal.
2

Zones

China’s Haier breaks ground on second phase of industrial complex.
3

What we're tracking today

An update on Makin’s engine manufacturing facility in Ras Al Khair.
4

Also on Our Radar

SCZone breaks ground on chemical plant in Ain Sokhna.
5

The Macro Picture

MENA ports take a dip on 2023 container port performance index.
6

Around the World

CMA CGM eyes full takeover bid for Santos Brasil.

Tuesday, 24 Sep 2024

What We're Tracking Today
Ports
Zones
The Macro Picture
Also On Our Radar
Around The World
Calendar
1

What we're tracking today

TODAY: Egyptian consortium to build USD 450 mn Dekheila dry bulk terminal

Good morning, nice people. We have news emerging from Egypt this morning on the ports and trade front, with an update on the developments at Dekheila port and Haier lining up exports from its eco-industrial park in Tenth of Ramadan City. First, a progress note on Makin’s engine manufacturing facility in Saudi…

WATCH THIS SPACE-

#1- Aramco Hyundai and Dussur JV, Makin, has completed building c.40% of its engine manufacturing facility, which is set to come online in early 2026, Al Eqtisadiah quoted CEO Bader Al Zaabi as saying at the Saudi Maritime Logistics Conference 2024 in Dammam. The facility plans to churn out 30 large engines for oil tankers and 235 medium-speed engines for smaller ships each year. The factory is located in the King Salman Maritime Industries Complex in Ras Al Khair. Makin is the first facility in the MENA region focused on marine engines and pumps.

#2- A consortium of Egyptian, Saudi, and Emirati companies has announced a major industrial merger agreement valued at USD 800 mn, set to be revealed in October, Executive Partner and head of investment banking at Zilla Capital Moustafa El Shenety told Asharq Business (watch, runtime: 9:30). El Shenety did not provide further details or information on the agreement or the parties involved.

#3- Turkey looks to boost clothing manufacturing in Egypt’s SCZone: Officials from Egypt’s Suez Canal Economic Zone (SCZone) met with Turkish companies to discuss expanding cooperation in clothing manufacturing, according to a statement. SCZone Chairman Walid Gamal El Din met with representatives from international and local companies operating in Turkey, including Slazenger, FM Tekstil, Canlioglu, and Groppa.

IN OTHER EGYPT NEWS- TSMC + Samsung mulling setting up UAE chip factories: Global chip-making giants Taiwan Semiconductor Manufacturing (TSMC) and Samsung Electronics are looking to build factory complexes worth over USD 100 bn in the UAE, WSJ reported. The projects would be financed by the UAE, with Abu Dhabi’s Mubadala playing a key role, based on the preliminary terms being negotiated. The UAE aims to increase global chip production and help lower chip prices without hurting chip-makers’ profitability.

The tentative plans: In a recent visit to the UAE, top executives from TSMC discussed building a plant complex on par with some of the country’s most advanced facilities in Taiwan. Samsung Electronics is also considering major new chip-making operations in the UAE.

MARKET WATCH-

#1 Oil prices rose in early morning trading on the back of Middle East supply concerns and a tropical storm hitting US crude production, Reuters reports. Brent crude futures for November inched up USD 0.21 to USD 74.11 a barrel at GMT 00.30, while West Texas Intermediate crude futures for November climbed USD 0.24 to USD 70.61 a barrel. "The oil market has been concerned that rising tensions in the region were dragging the OPEC oil producer [Iran] closer to engagement," ANZ bank said in a note. "Traders are also keeping an eye on the weather. The US Gulf Coast is at risk of a hurricane strike by the end of the week as a patch of turbulent weather in the Atlantic consolidates," the bank added.

#2- Baltic index is up across the board: The Baltic Exchange’s dry bulk sea freight index — which tracks rates for the capesize, panamax, and supramax vessel segments — rose 1.1% to 1,999 points on Monday, its highest point since July. The capesize index was up 1.2% to 3,275 points, while the panamax index added 14 points to 1,552 points. The smaller supramax index increased 12 points to 1,301 points.

DATA POINT-

#1- August cargo volumes maintain upward trajectory at Jordan’s QAIA: Cargo volumes at Jordan’s Queen Alia International Airport (QAIA) rose 11.8% y-o-y to 6.7k tons in August 2024, according to a statement. Overall, QAIA has recorded a 22.9% y-o-y increase in cargo to 52k tons over the last eight months.

#2- King Khaled International Airport in Riyadh took the leading position in August among international airports handling 15 mn or more passengers annually, according to aviation regulator General Authority for Civil Aviation's monthly report. This marks a turnaround from the previous month, which saw Jeddah’s King Abdulaziz International Airport lead the category,

***YOU’RE READING EnterpriseAM Logistics, the essential MENA publication for senior execs who care about the industry that connects producers and retailers to global markets. We’re out Monday through Thursday by 9:15am in Cairo and Riyadh and 11:15am in the UAE.

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***

CIRCLE YOUR CALENDAR-

Bahrain to host the Routes World forum from Sunday, 6 October to Tuesday, 8 October. The event will bring together VPs and network planning heads from some 250 carriers to discuss global air route networks.

Saudi Arabia to host the Global Logistics Forum from Saturday, 12 October to Monday, 14 October in Riyadh. The forum will gather key industry players, government officials, and industry experts to discuss optimizing operations and driving growth in the logistics sector. The event will take a specific look at how the sector can adapt with regards to global climate change and incorporate sustainability into their supply-chain operations.

Saudi Arabia to host the Global Airport & Aviation Forum from Wednesday, 16 October to Thursday, 17 October in Jeddah. The forum will bring together aviation leaders and experts to discuss future projects in the aviation industry, including new airport developments, capacity upgrades and expansions, new aircraft orders, and important airport services.

Saudi Arabia will host the Smart Ports & Logistics Transformation Summit on Monday, 21 October and Tuesday, 22 October in Riyadh. The two-day conference aims to discuss strategies, innovation, and technologies in line with Saudi Arabia’s Vision 2030, which aims to position KSA as a logistics hub in the MENA region.

The UAE will host the International Conference on Tourism, Transport, andLogistics on Saturday, 26 October and Sunday, 27 October in Dubai. The event will gather scientists, scholars, and engineers from around the world to discuss new ideas and research development projects in the industry.

Check out our full calendar at the bottom of this email for a comprehensive listing of upcoming news events and news triggers.

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2

Ports

Egyptian consortium to build USD 450 mn Dekheila dry bulk terminal

Dekheila dry bulk terminal development contract awarded: A local Egyptian consortium will invest USD 450 mn to build, manage, and operate a 300k square meter dry bulk terminal in the country’s Dekheila Port under an initial agreement inked with the Alexandria Port Authority, according to a statement.

Who’s in on the project? The consortium includes four local firms — commodities trader Mediterraneo Egypt, Latt Trading and Shipping, the Holding Company for Maritime and Land Transport, and Elsewedy.

A long time coming: Alexandria Port Authority has been on the hunt for grain shipping and handling companies to take over the terminal since August 2023. And until last month, several local consortiums were competing to manage and operate the terminal.

Project profile: The consortium will develop, manage, operate, and maintain the 300k sqm terminal and its accompanying logistics zone. The project aims to boost handling and storage capacity, particularly for grains like wheat, corn, and soybeans — it should add some 6-7 mn tons to our annual handling capacity and have the ability to accommodate up to four ships of up to 240 meters each.

Work has already started: The project’s superstructure is already 51% complete, according to the statement.

Part of a wider plan: The project is part of efforts to develop the Alexandria Port and boost its capacity to over 120 mn tons a year, the statement says. The new Madbouly government is looking to continue developing logistics zones adjacent to ports to mediate transport between production hubs and export and import terminals, as part of its efforts to improve the country’s ports.

REMEMBER: Alexandria Port Authority is gearing up to hand over two more maritime terminals to local and foreign operators this year — the Alexandria Port’s passenger terminal and the container terminal at Dekheila Port.

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3

Zones

China’s Haier breaks ground on second phase of industrial complex

Chinese appliance manufacturer Haier laid the foundation stone for the USD 40 mn second phase of its eco-industrial park in Tenth of Ramadan City, at an event yesterday attended by EnterpriseAM. The second phase of the project is scheduled to go online and begin production in 4Q 2025, Haier Egypt General Manager Ahmed El Gendi told us.

The details: This second phase of the project will have a production capacity of 300k refrigerators and deep freezers and offer around 1k jobs, according to an Investment Ministry statement.

Big export plans: Haier started exporting its Egypt-made products to Kenya and Seychelles and has plans to start exporting to Spain, Jordan, and Algeria before the end of the year, El Gendi told us. The company aims to export 30% of its output by 2025, he added.

REMEMBER: Haier inaugurated the USD 130 mn eco-industrial park back in May. The first phase of production at the park — which primarily targets the local market — kicked off in March, rolling out ACs and TV sets.

Preparations are underway for a third phase: The Industrial Development Authority has already allocated 45k sqm for the third phase of the complex, El Gendi said on the sidelines of the conference. The third phase will produce 22k air conditioning units a year with an investment of USD 50 mn, El Gendi added.

Haier has been on Egypt’s list: Haier was one of the firms that received golden licenses to operate in Egypt back in 2022. It was also amongst three big international companies that the government wanted to attract, alongside Turkish home appliance manufacturer Beko and subsidiary of Germany’s Bosch, BSH Home Appliances.

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4

The Macro Picture

MENA ports take a dip on 2023 container port performance index

The Middle East’s port performance has dropped on the World Bank and S&P Global’s Container Port Performance Index (CPPI), according to a recent report (pdf) which assesses the operational performance of container ports worldwide. Qatar’s Hamad Port, which dropped three places y-o-y to settle at the 11th spot and Egypt’s Port Said fell six places claiming 16th.

The UAE saw major drops in performance: Abu Dhabi’s Khalifa Port saw a major drop to 29th place from its previous ranking in third place. Jebel Ali came in 49th place, dropping 11 places from last year, while Sharjah recorded a slight rise by four places to sit at 123th place.

Saudi ports dipped in this year’s rankings: KSA’s King Abdullah Port — which held first place on the 2021 index (pdf) — sharply declined to settle at 30th place, falling from 17th place in 2022. Jeddah also experienced a significant drop to 58th place from 29th place in 2022. Similarly, Dammam slipped four spots from last year, to settle at 35th place.

There were exceptions: Oman’s Salalah Port remained at the top of the list, securing the second overall spot — unchanged from 2021. Similarly, Morocco’s Tangier-Mediterranean also retained its spot in fourth place on the ranking.

GCC countries underperformed overall: Kuwait’s Shuwaikh Port dropped from 73rd place to 208th, while Shuaiba ranked in 161st, down from 121st. Oman’s Sohar Port also recorded a dip to 66th place, down from 49th. On a positive note, Bahrain’s Khalifa Bin Salman Port jumped up by 30 places, nabbing 43th place.

The Levantine ports told a mixed tale: Jordan’s Aqaba Port fell to 87th place, dropping from 59th the year prior and from its position in the 30s in 2021. Over in Lebanon, Beirut Port leaped up to 68th place, after ranking near the bottom 10 at 320 last year. Tripoli Port’s ranking increased to 102nd place from 219th.

Egypt’s Mediterranean-linked ports creeped up in the rankings: Egypt’s Sokhna Port jumped up to 122, up from 269 the year prior. Alexandria Port increased to 172, up from 268. Yemen’s Port of Aden came in at 237, up from 262.

Israel was hit hard: Haifa port saw its rankings plummet to 119th place from 56th. Israel’s key ports, including the Mediterranean’s Haifa and the Red Sea port of Eilat, continue to be targeted by Iranian proxies, with several incidents reported in June alone.

Bridging operational gaps: Average global port call times increased in 2023 to 40.5 hours, a slight rise from 36.8 hours the year prior. Some 3.71 hours, 11.7%, were spent as idle time at berths before and after cargo operations. To streamline operations, ports will need to focus on implementing more efficient planning, preparation, and communication techniques to reduce the almost four hours spent in stalled time, the report recommends.

Port congestion is on the rise in 2024: The number of ships crossing through the Suez Canal has dropped by 66%, with attacks by the Houthis in the Red Sea forcing ships to divert their vessels around Africa since late last year. “These disruptions have led to service reconfigurations and volume shifts, straining infrastructure and resulting in port congestion, delays, and shortages in capacity and equipment,” Maersk said this month, adding that a “timeline for easing these disruptions and returning to normal remains uncertain.”

And we can expect more challenges to come: Congestion at Jebel Ali Port rose sharply in 2Q 2024, as the port looked to support vessels being rerouted around the Cape of Good Hope. An increase in vessel arrivals has resulted in inter-terminal lags and weakened operational efficiency, with high yard density at various terminals straining port facilities. So, delay times spiked in May, hitting three to four days, with vessels' arrival-to-berthing wait time reaching up to seven days. As such, “the congestion at Jebel Ali also necessitated the rerouting and omission of varying terminals,” Business Development Manager of Finmar Group Ahmed Mouselhy told Enterprise.

Exploring alternative routes: To maneuver through the disruptions, major shipping lines have been “forced to load and distribute their eastbound Gulf, ISC, and Far East Volume — specifically out of Sokhna — onto feeder operations like XPress to ensure continuity of operations,” Mousehly added.

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5

Also on Our Radar

China’s making more moves in Egypt’s SCZone

ZONES-

SCZone breaks ground on chemical plant in Ain Sokhna: Egypt’s SCZone has broken ground China-based Kemedi Chemical Company’s new USD 30 mn chemical manufacturing facility in the TEDA industrial zone in Ain Sokhna, according to a statement. The facility, built over 60k sqm, looks to produce over 40k tonnes of calcium hypochlorite per year and will be the largest production base for calcium hypochlorite in Egypt and Africa, according to the statement. The project is being developed in two phases, with production to begin following the completion of the first phase in May 2025.

Déjà vu? We first heard about the project back in May — but at a cost of only USD 17.2 mn.

China plays a prominent role in the SCZone: So far, there are upwards of 160 Chinese companies that have established bases in the zone, who have collectively invested around USD 2 bn, Suez Canal Economic Zone Chief Walid Gamal El Din said. The most recent swath of big-ticket investment news coming from China was a raft of contracts and MoUs with Chinese companies totaling over USD 1.1 bn signed at the Forum on China-Africa Cooperation in Beijing earlier this month.

OTHER STORIES WORTH KNOWING THIS MORNING-

  • Iraqi Airways launches new UAE route: Iraqi Airways will begin running four weekly flights from Baghdad to Sharjah starting from 17 October. (Ina)
  • Bhutan’s Drukair launches new Dubai route: National Bhutan carrier Drukair will start two weekly flights between Bhutan’s Paro and the UAE’s Dubai starting 28 October. (Zawya)
  • Emirates adding flight to Johannesburg-Dubai route: Emirates will add a fourth daily flight from Johannesburg in South Africa to Dubai starting 1 March 2025. (Emirates)
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6

Around the World

CMA CGM eyes full takeover bid for Santos Brasil

CMA CGM to launch takeover bid for Santos Brasil after acquisition: French shipping Giant CMA CGM is planning a full takeover bid for multi-terminal port operator Santos Brasil, after it agreed to buy a 48% stake of the company worth USD 1.2 bn (BRL 6.3 bn), Reuters reports, citing a statement. CMA CGM would buy some 215 mn shares and c.40 mn Global Depositary Receipts of Santos Brazil for USD 2.78 (BRL 15.30) per share. The transaction is expected to be finalized in early 2025, then CMA CGM would take over within 30 days after the closing of the stake purchase and needed approvals.

Details: The agreement is long-term till 2047, with a capacity of 2.5 mn TEUs, which could be expanded to 3 mn, and three berth slots capable of handling 14k TEUs ships, according to the statement. Santos Brasil manages a portfolio of eight assets on the Brazilian coast, which includes three container terminals, one vehicle terminal, one liquid bulk terminal and three logistics facilities, all the assets are located in Ports of Santos, Imbituba, Vila do Conde, Itaqui, and São Paulo.

Looming strikes at US ports threaten supply chains: Almost 45k dockworkers at all major eastern US and Gulf coast ports are threatening to strike on 1 October, demanding a near 80% raise over six years, Bloomberg reports. The strike — which would be just weeks before the US presidential elections — could potentially disrupt supply chains and hike prices. Analysts warn that the impact would be felt worldwide as port congestion hampers shipping capacity and increases freight rates.

The impact: The backlog from a weeklong strike would take at least four weeks to clear and impose a USD 4.5 bn to USD 7.5 bn hit, Bloomberg quoted Oxford associate economist Grace Zwemmer as saying. The impact will also be felt with items that cannot be stockpiled, such as bananas, two-thirds of which are unloaded at eastern and Gulf Coast ports.

OTHER STORIES WORTH KNOWING THIS MORNING-

  • Alaska Airlines flights disrupted after IT outage: US airline Alaskan Airlines faced an IT outage on Monday, disrupting operations and delaying flights. The airline issued a mandatory ground stop for arrivals in Seattle for two hours. Alaskan Airlines said the outage was not due to a cyber attack and that it has been resolved, although a residual impact is still expected. (Reuters)
  • Singapore opens new shipyard: Singapore’s ST Engineering has opened a USD 95 mn yard — dubbed Gulf Yard — to build and repair ships at Gulf Road in Singapore’s west. (Statement)
  • DHL to triple its shipping capacity at Porto Airport: DHL Express Portugal is expanding its presence at Francisco Sá Carneiro Airport in Porto, Portugal with a new facility worth EUR 25 mn. The facility is 18k square meters, can process 6.5k pieces per hour for imports, an increase of 150%, and 5k pieces per hour for exports, an increase of 300%. (Statement)
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Calendar

SEPTEMBER

23-25 September (Monday-Wednesday): WorldFreezonesOrganization’s Annual International Conference and Exhibition (AICE), Dubai, UAE.

23-26 September (Monday-Thursday): Freight Summit Global Conference, Dubai, UAE.

25-26 September (Wednesday-Thursday): Global Aerospace Summit, Abu Dhabi, UAE.

30 September - 2 October (Monday-Wednesday): African, Middle East & Islamic Finance Aviation 100 Awards, Dubai, UAE.

OCTOBER

6-8 October (Sunday-Tuesday): Routes World 2024, Bahrain.

8-10 October (Tuesday-Thursday): The Global Rail Transport Infrastructure Exhibition and Conference(Global Rail), Abu Dhabi, UAE.

7-9 October (Monday-Wednesday): AFSIC – Investing in Africa, London, UK.

8-10 October (Tuesday-Thursday): AntwerpXL Expo, Antwerp, Belgium.

12-14 October (Saturday-Monday): Global Logistics Forum, Riyadh, Saudi Arabia.

13 October (Sunday): International Transport Workers’ Federation (ITF) Congress, Marrakesh, Morocco.

16-17 October (Monday-Tuesday): Global Airport & Aviation Forum, Jeddah, Saudi Arabia.

21-22 October (Monday-Tuesday): Smart Ports & Logistics Transformation Summit, Riyadh, Saudi Arabia.

22-24 October (Tuesday-Thursday): Asean Ports and Logistics, Johor, Malaysia.

22-24 October (Tuesday-Thursday): Global Ports Forum, Singapore.

26-27 October (Saturday-Sunday): International Conference on Tourism, Transport, and Logistics, Dubai, UAE.

NOVEMBER

11-12 November (Monday-Tuesday): World Advanced Manufacturing Logistics Summit & Expo, Riyadh, Saudi Arabia.

11-12 November (Monday-Tuesday): Saudi Airport Exhibition, Riyadh, Saudi Arabia.

11-14 November (Monday-Thursday): ADIPEC Maritime and Logistics Exhibition and Conference, Abu Dhabi, UAE.

13-15 November (Wednesday-Friday): The Bahrain International Airshow, Sakhir Airbase, Bahrain.

13-15 November (Wednesday-Friday): ITC North-South - New Horizons, Astrakhan, Russia

18-20 November (Monday-Wednesday): The Heavy Equipment and Truck Show, Damman, Saudi Arabia.

19-21 November (Tuesday-Thursday): Saudi International Maritime Forum, Dammam, Saudi Arabia.

18-19 November (Monday-Tuesday): G20 Summit, Rio de Janeiro, Brazil.

20-21 November (Wednesday-Thursday): Saudi Rail Exhibition, Riyadh, Saudi Arabia.

DECEMBER

2-3 December (Monday-Tuesday) Wings of Change Middle East, Riyadh, Saudi Arabia.

10-11 December (Tuesday-Wednesday): Rail Industry Summit, Casablanca, Morocco.

10-12 December (Tuesday-Thursday): Middle East Business Aviation, Dubai, UAE.

20 December (Wednesday): The Iran-Senegal Joint Economic Cooperation Commission, Dakar, Senegal.

EVENTS WITH NO SET DATE

IATA Annual General Meeting (AGM) and World Air Transport Summit, New Delhi, India.

1H 2024: Civil Construction subcontracts for construction firms in Oman for implementation of the Abu Dhabi - Suhar rail link to be announced.

2H 2024: Bahri’s barges for Saline Water Conversion Corporation (SWCC) to begin initial and commercial operation.

King Salman Energy Park is set to become operational.

The Cross-Border Digital Trade Forum, Dubai.

2025

FEBRUARY

4-5 February (Tuesday-Wednesday): Seatrade Maritime Qatar, Doha, Qatar.

APRIL

16-17 April: Global Ports Forum, Dubai, UAE.

Mid-2025: Iraq will complete phase one of the construction of the Grand Faw Port.

DHL and Aramco’s logistics and procurement hub in Saudi Arabia will commence operations.

AD Ports-operated Safaga Port’s multi-purpose terminal will become operational.

Phase 3 of APM Terminals Tangier MedPort to be complete and operational.

1Q 2025: Sadr Park’s Logistics Center in Riyadh to be completed.

1Q 2025: Phase twoof Jafza Logistics Park to be completed.

NOVEMBER

4-6 November: The International Air Cargo Association TIACA’s Air Cargo Forum 2025, Abu Dhabi, UAE.

2026

2026 UNCTAD Global Supply Chains Forum, Saudi Arabia.

2027

4Q 2027: Oman’s Musandam Airport construction to be completed.

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