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DP World + Evyap Group merge to manage two key Turkish ports

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What we're tracking today

TODAY: Lots of port business + A blockbuster gas supply agreement for Iran

Good morning, ladies and gents. It’s a fairly busy morning with some developments in port business across the region, as well as a few updates in the aviation and trade sectors. Elsewhere, the dust is settling after a major IT glitch caused major outages globally in the aviation industry this past weekend, we have all the details below.

THE BIG LOGISTICS STORY- A global IT outage caused substantial disruptions to logistics networks and supply chains over the weekend. A glitch in a software update from global cybersecurity firm CrowdStrike caused failures that impacted “shipping lines, customer systems, and transport businesses” around the world on Friday, UK-based logistics firm Woodland Group said in a statement.

What happened? A routine software update pushed by global cybersecurity firm CrowdStrike to its Falcon Sensor software threw some 8.5 mn machines running Microsoft Windows into boot loops. Airlines and some other companies were hit particularly hard, with airports and airlines around the world grounding flights and reverting to manual paperwork.

Flights were grounded around the world, with delays, cancellations, and check-in issues reported globally. Edinburgh Airport, Hong Kong International, and Singapore’s Changi were among the major airports that reported technical issues.

The status now: Things are starting to unsnarl as technicians push out fixes while Windows users who have been impacted reboot their machines and manually delete CrowdStrike’s botched update — a process that requires hands-on access to each device. It’s a process that could take days for businesses with large fleets of impacted devices and not enough IT staff

The story grabbed a lot of ink in the int’l press over the weekend: Reuters | AP | Bloomberg | New York Times | The Washington Post | The Financial Times | CNN

WATCH THIS SPACE-

#1- A blaze erupted in Yemen’s Hodeida Port following a deadly Israeli strike on the harbor on Saturday resulting in the deaths of at least three people, Reuters reports. Fuel storage tanks and a power plant caught fire at the port, a Hodeida port employee said, adding that the blaze could take days to contain. The attack could potentially affect fuel stocks in Yemen and increase prices of fuel and goods carried by trucks, the outlet added. The Houthi-controlled Hodeida port is a key entry point for fuel imports and international aid for Houthi-held areas of Yemen.

Background: The attack by Israel comes in response to a Houthi drone strike on Tel Aviv last Friday, Israel has said. “Response to the Israeli aggression against our country is invariably coming and will be huge,” Houthi spokesperson Yahya Saree said in a statement. The Israeli military also said that it intercepted a missile fired from Yemen towards Eilat before it entered Israeli territory.

Brace for fallout: Continued escalation could further disrupt major oil shipping routes and heighten geopolitical tension risks in our neck of the woods, potentially leading to volatility in global oil markets and intensified inflationary pressures.

#2- Bahri drops out of DB Schenker bid race: Saudi shipping firm Bahri dropped out of an acquisition race to snap up German logistics giant DB Schenker, Gulf Business reported on Friday. Bahri’s offer — USD EUR 15 bn (USD 16.4 bn) — was the highest among other bidders. The two contenders left in the race are a consortium between the CVC and the Abu Dhabi Investment Authority (ADIA) and GIC, and DSV, after Danish shopping firm Maersk dropped out of the race earlier this month. Final bids are to be submitted by the end of August.

REMEMBER- Deutsche Bahn tapped Maersk, DSV, Bahri, and the CVC-ADIA-GIC consortium for the final round of bidding for its logistics subsidiary DB Schenker last month.

#3- Airlines expect passenger numbers to double over the next two decades, driven by emerging markets like Asia Pacific and the Middle East, AFP reported on Friday, citing updated data by global airline coalition International Air Transport Association. The Asia Pacific region is projected to lead with 4.8% annual growth by 2043, while Africa and the Middle East will see a 3.6% increase in the same period. Sustainable aviation fuels, which currently make up just 0.53% of fuel consumption, are expected to play a key role in decarbonizing the sector, though significant investments are still needed to scale production.

The industry has a deadline to decarbonise: The aviation industry — which accounts for almost 3% of global CO2 emissions — has a critical deadline to introduce cleaner planes by the mid-2030s, Bloomberg reported last week, citing a recent study (pdf) by the International Council on Clean Transportation (ICCT). The study emphasizes the need for new aircraft models that emit zero CO2 throughout their operational lifetimes, given the long service life of commercial planes, which typically span about 25 years. The ICCT warns that the current fleet will consume half of the 2050 carbon budget, urging plane makers to accelerate the development of zero-emissions aircraft, particularly those powered by hydrogen.

It’s not an easy path: While Airbus and Boeing are working on more efficient models and sustainable aviation fuel (SAF) blends, with Airbus aiming to introduce a hydrogen-powered aircraft by 2035, the adoption of SAF and other technologies is progressing slowly, and startups in the electric and hydrogen-powered aircraft sectors face financial hurdles, the study found. The ICCT estimates a market for at least 10k new aircraft powered by hydrogen, electricity, or 100% sustainable fuels through 2042, and is calling for increased investments and stricter emissions limits for new planes

MARKET WATCH-

Oil prices rose in early morning trading as investors keep their eyes peeled for signs of interest rate cuts as soon as September, Reuters reports. Brent crude futures were up by USD 0.48 to USD 83.10 a barrel by 00.25 GMT, while US West Texas Intermediate (WTI) gained USD 0.42 hitting USD 80.55 a barrel. “Inflation and labor market data have signaled that disinflation and labor market rebalancing are in place, which we expect will allow the Fed to begin its interest rate cutting cycle in September," the newswire reported, citing an ANZ Research note.

Baltic index down as capesize continues decline: The Baltic Exchange’s dry bulk sea freight index — which tracks rates for the capesize, panamax, and supramax vessel segments — was down 0.5% to 1,902 on Friday, weighed down by low capesize rates, Reuters reports. Capesize fell 1.1% to 2,973 points, while panamax remained unchanged at 1,714 points. The smaller supramax index jumped 0.3% to 1,374 points.

PSA-

Shipping giant Maersk is raising its emergency contingency surcharge (ECS) starting from 1 August, according to a statement. The ECS update is due to ongoing industry-wide disruptions resulting in delays and congestion at ports, as well as shortages in equipment and capacity, the liner said.

Details: Routes from KSA’s Jeddah and King Abdullah Ports to North Europe, the Mediterranean, and West Africa will see their ECS rising from USD 400/500 per container to USD 600 or USD 700 per container. Routes from the Middle East and Indian subcontinent to West Africa will see an ECS spike from USD 500/600 per container to USD 1.5k/1.6k per container. Routes from the UAE, Qatar, and Oman to West Africa will see rates jump up from USD 500/1.1k per container to around USD 2.1k per container.

CIRCLE YOUR CALENDAR-

Saudi Arabia will host the Saudi Warehousing and Logistics Expo on Monday, 2 September to Wednesday, 4 September in Riyadh. The event will bring together leaders in the supply chain, warehousing, and logistics industry from across the Kingdom to discuss investments, trade, geopolitical risks, and localized manufacturing.

Egypt will host the Egypt International Airshow on Tuesday, 3 September to Thursday, 5 September in El Alamein. The event will host a range of discussions touching on industrialization, digitalization, and globalization in the regional commercial aviation sector. During the event, aircrafts and innovative aerospace products, and services will be showcased.

Saudi Arabia will host SkyMove MENA on Tuesday, 10 September and Wednesday, 11 September in Riyadh. The event will gather global industry stakeholders, experts, and service providers to discuss challenges in the regional aviation 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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M&A Watch

DP World + Evyap Group merge to manage two key Turkish ports

DP World + Evyap Group partner to boost port management in Turkey: DP World and Turkey’s Evyap Group have entered a strategic merger and formed a joint venture, DP World Evyap, for the management of two major ports in Turkey’s Marmara region, according to a statement released on Friday. Neither the investment ticket nor the timeline have been revealed.

The breakdown: Under the new venture, DP world will hold a 58% stake in Evyapport, and Evyap Group will absorb a 42% share of DP World Yarimca, according to the statement. The two maritime gateways will be rebranded to DP World Evyap Yarimca and DP World Evyap Körfez to reflect the transition.

Details: The JV will seek to manage over 2 mn TEUs in total container handling capacity annually by producing over 2k meters of berthing space by joining both terminals. The move looks to streamline logistics handling in the country, increasing Turkey’s export and import capacity and solidifying its status as an international supply chain hub.

What they said: “The new company will shorten operation times, increase service diversity and add value to our customers and Türkiye's trade with efficiencies achieved across the two partnership terminals,” said Evyap Holding CEO Mehmed Evyap.

Background: Talk of the move between DP World and Evyap first made ink nearly a year ago. The completion of the transaction was contingent upon regulatory approval, which the pair have now obtained from the Turkish Competition Authority.

Other logistics giants are eyeing Turkey: AD Ports Group is also reportedly in talks to acquire a stake in the key Turkish port of Izmir in a USD 500 mn transaction. The agreement could see AD Ports shell out investments in an entity established by Turkey’s sovereign wealth fund to operate the facility. The UAE and Turkey inked a trade agreement last year, as the two countries looked to ramp up bilateral trade and investments.

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Aviation

Gulf Air to build MRO hangar at Bahrain International Airport

Bahrain’s national carrier Gulf Air will establish a new maintenance, repair, and overhaul (MRO) hangar at Bahrain International Airport (BIA), according to a press release. No investment ticket or timeline has been disclosed for the project, which will be Gulf Air’s first purpose-built MRO facility.

Details: The facility will house a 20k square meter temperature-controlled hangar, several stores, workshops, and a dedicated tarmac to ensure reliability and accessibility. The hangar — which will further develop Gulf Air’s in-house capabilities — also aims to offer talent development prospects for specialized technicians, engineers, and aviation professionals.

Gulf Air has been busy: Gulf Air is looking to renew its fleet to expand and boost its network, with plans to purchase Airbus and Boeing aircraft over the next few years. The national air carrier extended its partnership last year with Dubai Aerospace Enterprise’s aircraft MRO engineering arm and Jordan Aircraft Maintenance Limited (Joramco) for aircraft maintenance services at Joramaco’s MRO facility at Queen Alia International Airport.

There’s also been a lot of action at BIA: Bahrain Airport Services plans on investing BHD 4.5 mn (USD 12 mn) to revamp its ground services equipment (GSE) fleet within three years in a bid to improve passenger and cargo services at BIA. DHL Express has also inaugurated a EUR 218 mn expansion of its MENA hub and main office at BIA back in June.

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Ports

Marsa Maroc to operate two terminals at Benin’s Cotonou Port

Morocco’s main port operator Marsa Maroc has taken on a delegated management contract for two terminals at Benin’s Cotonou Port, according to a statement (pdf) published last week. Marsa Maroc was chosen in an international selection process led by Benin Manutentions SA, and an operating agreement will be signed “shortly.”

What we know: Marsa Maroc will operate Terminals 1 and 5 at the port and will leverage its relationship with leading shipping companies to boost performance at the port and develop resilient logistics corridors in the region. The investment ticket and timeframe for the contract have not been disclosed.

More about the port: Cotonou Port handles 526k TEUs of container traffic a year as of 2022, according to a Logistics Cluster report. The port handles approximately 436k metric tons of bulk cargo and 2,9 mn metric tons of break bulk cargo. Terminal 1 is the general cargo pier, while Terminal 5 is the South Container Terminal.

Why is this significant? Cotonou Port serves as a key transit gateway to West Africa’s landlocked countries including Burkina Faso, Mali, and Niger, according to the report. The port also includes a freezone used by these landlocked countries, mostly Niger. The port city generates key trade and logistics activity for Benin.

Keeping our eyes on Benin: Benin’s government is working with bilateral and multilateral partners to evaluate the development of a second deep terminal, dubbed Seme, which would be located between Cotonou and the Nigerian border, according to the report. Cotonou already acts as a relay port for the Nigerian market.

Background: Benin’s Cotonou Port inked a 25-year concession agreement with France’s Bollore group subsidiary Societe de Manutention du Terminal a Conteneurs de Cotonou (SMTC) for the building and operation of its South Wharf Container Terminal in 2009, according to an International Finance Corporation (IFC) report (pdf). The port looked to international operators, as it was being held back from being a key trade hub by high shipping costs, a lack of efficiency, and underfunded logistics facilities.

Marsa Maroc making moves: Marsa Maroc inked a 25-year concession agreement last month with Nador West Med (NWM) for the NWM Eastern Container Terminal. The port operator will invest EUR 200 mn in developing the first phase of the terminal, which is expected to be operational by 2027. Marsa Maroc currently manages 24 terminals at 10 ports, handling some 57 mn tonnes in 2023.

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Trade

Russia and Iran sign a EUR 11 bn gas import agreement

Iran inked a EUR 11 bn gas import agreement with Russia for 300 mn cubic meters of gas per day, IRNA reported last week, citing comments made by Iran’s Oil Minister Javad Owji. The 30-year agreement aims to bolster Iran’s domestic industries, expand its export capacities, position it as a regional hub for gas production, the minister said.

The details: The agreement will see Russia deliver 300 mn cubic meters of gas per day via the Caspian Sea, and Iran will export any surplus gas to countries in the region. Any cost of additional infrastructure will be handled by Russia, Owji said, according to Sky News Arabia. The financial revenues stand to generate between USD 10 bn to USD 12 bn annually, Owji said, adding that the agreement is unprecedented in Iranian history.

Why is this important? Iran — which sits on the world's second largest gas reserves after Russia — has been subjected to US sanctions that have hindered its access to technology and reduced its gas exports. The country also faced a substantial gas shortage earlier this year, which it has aimed to solve through investments from Russian energy giant Gazprom. Russia — which has also been subjected to Western sanctions — has faced obstacles to selling natural gas. The country’s total income from oil and gas exports in 1Q 2024 decreased by 47% y-o-y compared to the same period last year, hitting USD 37 bn.

Background: Russia’s Gazprom signed an MoU back in June with the National Iranian Gas Company (NIGC) to supply Russian gas to Iran. In July 2022, Gazprom inked a USD 40 bn MoU with the National Iranian Oil Company (NIOC).

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Also on Our Radar

A basket of updates from Saudi, Qatar, UAE, Oman and Bahrain

DATA CENTERS-

KSA’s Tourism Ministry has awarded leading Saudi IT firm Sure Global Tech Co. a SAR 23.97 mn two-year contract to develop and expand its existing data centers, a Tadawul disclosure reports. Sure Global Tech will supply the ministry with infrastructure devices compatible with the needs of the data centers.

About Sure Global Tech: Sure offers technical solutions related to technology and information security, including IT infrastructure systems, e-government solutions systems integration, internet portals, according to their LinkedIn. The firm is a systems integrator for data centers and software development.

ZONES-

QFZ inaugurates Qatar Postal Services: The Qatar Freezones Authority (QFZ) has opened a Qatar Postal Services outlet at the Ras Bufontas Freezone, QNA reported. The facility aims to improve the services offered to investors and bolster the development of businesses in the region. The outlet will offer a wide range of postal services to companies in the freezone.

LOGISTICS HANDLING-

Milaha will provide logistic services for Qatar Steel: Qatar Navigation (Milaha) has inked a five-year agreement with Qatar Steel to provide logistics services at Mesaieed Industrial City to boost the import and export of Qatar Steel-manufactured products, according to a statement. Under the agreement, Milaha will provide Qatar Steel with logistics and lifting services including skilled manpower and supporting equipment, including trailers and forklifts.

STORAGE + WAREHOUSES-

Oman unveils new warehouse guide: Oman has introduced its new Unified Guide for Warehouse Standards and Requirements, which aims to streamline trade flows and enhance Oman’s logistics operations, the Oman Observer reported. The new guide puts in place standards that aim to enhance efficiency, safety, and sustainability at warehouses across Oman. The guide covers several aspects of warehouse management, including optimal storage capacities, efficient operational workflows, and safety and sustainability protocols.

TRADE-

UAE to interlink payment systems with Seychelles: The UAE’s Central Bank (UAECB) has inked two MoUs with the Seychelles to integrate the use of local currency in bilateral transactions and to interlink payment and messaging systems, a statement said on Friday. The pair aim to streamline bilateral trade and investments by linking instant payment platforms, electronic switches, and messaging payment systems, Wam reports. The UAECB also inked an MoU to link its payment systems with Indonesia and Ethiopia last week, Wam and Reuters reported.

SHIPPING+MARITIME-

ASRY + DHL join forces to streamline express shipping in Bahrain: Bahrain’s Arab Shipbuilding and Repair Yard (ASRY) Company has inked a cooperation agreement with global shipping giant DHL’s Bahrain office to boost express transportation services in the country, Alwatan reports. DHL will use its services to expand ASRY’s delivery network and supply chain capacity, facilitating international and local door-to-door express transportation services.

Qatar’s MOT + Qatar Post ink postal services agreement: Qatar’s Transport Ministry has signed an agreement with Qatar Post to offer transportation digital services for beneficiaries of the ministry’s land and maritime transport services, according to a press release. Qatar Post will offer postal room, network, and delivery services for senior customers in order to provide efficient and reliable postal solutions. The digital services aim to streamline operations and ensure time-efficient transactions.

OTHER STORIES WORTH KNOWING THIS MORNING-

  • Etihad + Batik Air partner to boost their flight rosters: The UAE’s Etihad Airways and Batik Air Malaysia have entered a codeshare partnership to advance connectivity for customers of both carriers, with Etihad adding five new domestic codeshare locations in Malaysia. (Statement)
  • Nine crew members of capsized oil tanker are safe: Omani authorities have rescued nine of the 16-member crew of the Comoros-flagged oil tanker, the Prestige Falcon, that capsized off the coast of Oman last week. One of the crew members has been found dead. (BBC)
  • Kuwait Airways expands codeshare agreements ahead of Olympics: Kuwait Airways is launching several Paris-bound flights from Abu Dhabi, London, and New York ahead of the Olympics, which are taking place in the French capital from 26 July to 11 August. (TTW)
  • Menzies Aviation to manage KML’s ground handling services: Kuwaiti logistics giant Agility’s ground handling subsidiary Menzies Aviation has renewed a cargo and ground handling contract with Dutch KLM Airlines at Amsterdam Airport Schiphol. (Statement)
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Around the World

Volvo adjusts sales forecast on the back of Chinese EV tariffs + Indian air carriers line up Airbus orders

Volvo Cars has adjusted its profit outlook on the back of EU tariffs on Chinese electric vehicles, Reuters reported last week. The Swedish manufacturer lowered its sales forecast to between 12% to 15% in 2024, down from a previous 15% forecast. “It’s really driven by tariffs … It’s a short term issue for us, but it is an issue and we’re just going to have to deal with that,” Volvo Cars CEO Jim Rowan told the newswire.

The impact: Volvo is majority-owned by China’s Geely and is subject to a 19% tariff on its Chinese-made EX30 vehicle. The manufacturer will bear a “minimum of six months” of tariffs until it transfers its EX30 production to Belgium at the start of 2025.


Indian carriers make big Airbus orders: India’s flagship airline Air India has ordered 250 Airbus aircrafts — 210 A320s and 40 A350s — while India’s low-cost airline IndiGo has ordered more than 1k planes including 30 A350 aircrafts, Indian news outlet The Economic Times reported. Air India has already received six of the A350s, while the rest are set to be delivered over the next few years.

OTHER STORIES WORTH KNOWING THIS MORNING-

  • Taiwan to curb North Korean oil smuggling: Taiwan is working to criminalize any transaction with a citizen or entity from a nation subject to UN sanctions in a bid to crack down on oil smuggling at its ports. The move targets oil transshipments going to North Korea. (The Financial Times)

AUGUST

21-22 August (Wednesday-Thursday): Rex Fuels Global Expo & Conference 2024- Bitumen, Petrochemicals & Products, Dubai, UAE.

SEPTEMBER

2-4 September (Monday-Wednesday): Saudi Warehousing & Logistics Expo, Riyadh, Saudi Arabia.

3-5 September (Tuesday-Thursday): Egypt International Airshow, El Alamein, Egypt.

10-11 September (Tuesday-Wednesday): SkyMove MENA, Riyadh, Saudi Arabia.

12 September (Wednesday): Deadline for companies to submit bids for expansion and operation of Baghdad’s International Airport.

18-19 September (Wednesday-Thursday): Saudi Maritime & Logistics Congress, Dammam, Saudi Arabia.

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

23-26 September (Monday-Thursday): Freight Summit 15th 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.

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.

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.

2026

2026 UNCTAD Global Supply Chains Forum, Saudi Arabia.

2027

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

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