Earnings extravaganza + Enterprise Exports and FDI Forum gets underway

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What we're tracking today

TODAY: The Enterprise Exports and FDI Forum is finally happening

Good morning, lovely people. We have a super busy issue for you this morning, but first…

We’re sorry we were a few hours behind in delivering Thursday’s issue — we had a glitch in the machine but it’s now been fixed.

And more importantly…

The Enterprise Exports and FDI Forum istaking place today at the Four Seasons Nile Plaza. The event will see CEOs, top execs, bankers, and development finance folks attempt to solve the biggest economic issue of our time: How do we get out of our FX crunch by boosting exports and raising foreign direct investment.

We are very grateful for the interest we’ve seen from many of you and we cannot wait to meet those attending.

** Attendees who have confirmed and RSVP'd to their personal invitations do not need a QR code to enter the venue, but please do bring a business card you can give us in exchange for your name tag and lanyard.

The event kicks off with an 8am networking breakfast, with the opening panels starting at 9am.

Who can you expect to see there? Our friend Nadia El-Tawil, Investment Officer at AfricInvest: Nadia El-Tawil will be speaking on how the industries of today should embrace change and evolving trends if Egypt is to bolster its exports. She will be joined on stage by Mostafa Bedeir, CEO of Giza Seeds and Herbs and Abdallah Sallam, CEO of Madinet Masr. who will speak on how their companies are changing to meet these evolving trends.

Who else is speaking (in no particular order)?Hossam Abou Moussa, partner at Apis, Hassan Massoud, associate director and head of private equity (Southern Mediterranean) at the EBRD, Tarek Kamel, CEO of Nestle Egypt; Omar Elsahy, general manager of Amazon Egypt; Khaled Morsy, CEO of DB Schenker; Shady William, managing director of IDG; Mohamed Talaat Khalifa, CEO of Concrete; Mark Wyllie, CEO of Beyti; Kareem Abou Ghaly, chairman and CEO of Pasta Regina; Yasmine Khamis, chair of the Orientals Group, Cheick-Oumar Sylla, director for North Africa and Horn of Africa at the IFC; Hossam Sallab, CEO and vice-chairman of Sallab Group and Royal Ceramica; Tarek Hosny, head of investments and projects at Fertiglobe; Helmy Ghazi, deputy CEO of HSBC Egypt; Shams Eweis, corporate affairs director, Egypt, North Africa and Levant at Mars; Nada El Ahwal, CSO of Transmar; Yassir Zouaoui, partner at McKinsey; and Mohamed ElGebely, team leader at USAID Trade.

Topics and live interviews will also include:

Why exports and FDI are the way forward and what lessons have worked from around the world;
How to attract foreign partners and figure out what they are looking for;
What lessons can we draw from foods, fertilizers, and garments exporters who have increased our exports;
What are the fundamentals to creating an export and / or FDI strategy;
What it takes to secure a place in a multinational’s supply chain.
How industrial clusters could expedite exports and FDI and is a possibly avenue for SME development;

Tap or click here to explore the full agenda.

THE BIG LOGISTICS STORY- There’s a number of big stories vying for your attention this morning, including Emirates Group’s record annual earnings and new USD 200 mn fund for sustainable aviation research and development, and news that South Korea’s CJ Logistics is building an e-commerce logistics facility in Riyadh’s Special Integrated Logistics Zone.

HAPPENING TODAY-

WATCH THIS SPACE #1- SCZone + Rotterdam Port could cooperate on green fuels: Suez Canal Economic Zone (SCZone) CEO Walid Gamal El Din and Rotterdam Port CEO Allard Castelein discussed potentially signing an agreement for cooperation on green fuels, according to a statement. This includes a "green corridor" from Singapore to Rotterdam that would pass through the SCZone for green bunkering purposes. The pair also discussed potentially developing the SCZone’s ports through technical support in digitization, the statement added. Gamal El Din is in the Netherlands to drum up investments among local business leaders and officials from the Port of Rotterdam.

WATCH THIS SPACE #2-DP World will collaborate with China’sNingbo-Zhoushan port on automobile supply chain and logistics, Seatrade Maritime reports. The agreement will see Ningbo-Zhoushan develop its Dubai-based warehouses to extend logistical chains in MENA. The agreement comes one day after DP World held a roadshow in Beijing to attract investments from Chinese firms.

WATCH THIS SPACE #3- Iraq’s Al-Kut Ring Road project slated for completion by the end of the year: Construction of the Al-Kut Ring Road in Baghdad is to be complete by the end of 2023, Planning Ministry spokesperson Abdel-Zahra Al-Hindawi told Zawya. The 20km project, which comprises three bridges, connects Baghdad to central and southern governorates, and will act as a passage for transporting goods from Basra ports and border crossings. It will also boost trade and reduce traffic accidents in Baghdad, Al-Hindawi reportedly said, according to the news outlet.

WATCH THIS SPACE #4- The Black Sea grain pact may not be dead after all: Ukraine, Russia, Turkey and the UN are close to an agreement to extend last year’s grain agreement, which allowed Ukraine to continue exporting via the Black Sea and helped calm the food crisis caused by the war, Reuters reported on Saturday.

Airports in the Middle East are seeing traffic recover to pre-pandemic levels, Khaleej Timesreports, citing statements from International Air Transport Association (IATA) Middle East and Africa regional director Kashif Khalid at the Airport Show last week. Global aviation is experiencing a strong recovery, with the Middle East leading the charge after recovering 93% of pre-pandemic numbers, Khalid is quoted as saying. Recently published 1Q 2023 figures for Dubai Airport (DXB) show that traffic at the airport has reached 95.6% of pre-pandemic numbers.

Egypt’s cabinet approved a presidential decision to publish the list of customs breaks in the African Continental Freetrade Area (AfCFTA) agreement, according to a statement. The AfCFTA is a comprehensive agreement between African Union member states that aims to boost trade and investment across the continent. Kenya had enlisted Egypt’s aid in February to kickstart the protocol.

MARKET WATCH-Drewry’s composite World Container Index fell 1% to USD last week: The index was down 77% y-o-y and is down 83% from its peak in September 2021, according to Drewery’s analysis. The index is 35% lower than the 10-year average of USD 2.7k, signaling a return to more normal prices. Drewry expects East-West spot rates on routes other than the transatlantic to stabilize in upcoming weeks.

Oil prices fell for the third straight week due to supply fears and concerns over the US and China's economies, Reuters reports. Brent crude futures dropped 1.1% to USD 74.2 while US crude futures fell 1.2% to USD 70. Both benchmarks are down around 1.5% w-o-w.

CORRECTION- We incorrectly reported on Thursday that Egyptian offshore oil and gas and chartering firm Maridive will be using USD 8.71 mn of the funds Al Gihaz Holding is providing Maridive in exchange for two marine units and a Saudi subsidiary owned by its subsidiary Valentine Maritime to settle Valentine’s outstanding debt. We've amended the story to reflect the correct amount, which is USD 71.8 mn. The transaction comes as part of Maridive's strategy to deleverage its balance sheet and divest its non-core offshore EPC unit. There will be no net proceeds for Maridive as part of the agreement.

CIRCLE YOUR CALENDAR-

TheElectric Vehicle Innovation Summit 2023 will take place in Abu Dhabi between 29-31 May. The event is the first of its kind in the MENA region and brings together researchers, engineers, officials, and organizations involved in the EV scene, presenting attendees with opportunities to network across value chains and exchange ideas.

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

CJ Logistics is building the first e-commerce logistics facility in Riyadh

South Korea’s CJ Logistics plans to build a global distribution center in Saudi Arabia to act as a forwarding base for e-commerce players in the Middle East, according to a press release. The center will be the first e-commerce logistics facility in Saudi Arabia, and will be located in Riyadh's Special Integrated Logistics Zone.

The details: The facility, which is expected to be completed in 2H 2024, will span 18k sqm and will be able to handle some 15k boxes a day.

Kicking things off: The company inked an eight-year agreement to distribute US-based supplement and health product retailer iHerb’s products to consumers from nine countries across the region, including Saudi Arabia, UAE, and Kuwait. CJ Logistics has been distributing iHerb products in Asia from its global distribution center situated at Incheon Airport since 2018.

What they said: “The Saudi e-commerce market has the richest growth potential in the Middle East and the geographical advantage of connecting Africa and Europe," CJ Logistics CEO Kang Sin-ho said. “We will spare no support for state-of-the-art logistics technology and infrastructure so that the GDC can become a logistics hub that leads the Middle East e-commerce market,” he added.

Emirates commits USD 200 mn to aviation sustainability fund

Dubai-based carrier Emirates Group has established a USD 200 mn research and development (R&D) fund aimed at cutting emissions in commercial aviation, according to a press release. The funds will be disbursed over three years and will go towards partnerships with “leading organizations working on solutions in advanced fuel and energy technologies,” the statement said. The company’s Environmental Sustainability Executive Steering Group and technical experts will oversee the fund’s disbursal.

What they said: “We looked long and hard at the reality we face in commercial aircraft and engine technology, fuel supply chain, and our industry’s regulatory and eco-system requirements,” Emirates Airline President Tim Clark said. “It’s clear that with the current pathways available to airlines in terms of emissions reduction, our industry won’t be able to hit net zero targets in the prescribed timeline.”

ADNOC L&S is getting remotely operated vessels

French maritime service provider SeaOwl will design unmanned remotely operated vessels (ROVs) for ADNOC’s logistics subsidiary, ADNOC L&S, under a new agreement, the company said in a press release. The vessels will transport vehicles, equipment, and supplies to and from offshore sites. The company did not disclose a timeline for the delivery of the vessels, the exact number of vessels they will design, or the value of the agreement.

The details: The unmanned 55-meter-long vessels will be operated by a smart automation system from an onshore control room through a satellite link, using self-navigating technology. The ROV will use artificial intelligence to control propulsion, positioning, remote communication, and cyber security, according to the statement. The design will help reduce operational costs and the exposure of seafarers to harsh weather conditions, the statement added.

Also on board: While SeaOwl will design, oversee the construction of the ROV, and facilitate navigation permits, certification group, Bureau Veritas will provide the necessary navigation permits from the UAE maritime authorities, the statement said.

Emirates Group posts record revenue and net profits in 2022-2023

Emirates Group posts record annual income + revenues: Emirates Group reported annual income of AED 10.9 bn (USD 3 bn) for FY 2022-2023, which ended on 31 March, reversing its USD 1 bn net loss position from last year, according to its annual earnings report (pdf). The bottom line figure is an all-time high for the company. Topline figures for the same period also rose 81% y-o-y to hit a record AED 119.8 bn (USD 32.6 bn). Emirates Group attributes the growth to robust global demand following near total removal of travel restrictions.

Freight subsidiary Emirates SkyCargo saw a 21% decline in revenues to USD 4.7 bn, down from “exceptional” revenues last year due to the pandemic. Despite the decline, the cargo division displayed “solid performance” during the year, contributing 16% of the consolidated company’s revenues, according to the report. The amount of cargo it handled fell to 14% to 1.8 mn tonnes, as passenger aircraft that had been temporarily used for freight amid heightened demand during the pandemic was restored to its original use.

The company is also paying out a dividend of AED 4.5 bn (USD 1.2 bn) to its owner, the Investment Corporation of Dubai.

Looking ahead: The company expects to remain in the black during FY 2023-24, “with a strong positive outlook,” CEO Sheikh Ahmed bin Saeed Al Maktoum said. “We will work hard to hit our targets, while keeping a close watch on inflation, high fuel prices, and political and economic uncertainty,” Al Maktoum added.

Aramex sees net income fall 49% y-o-y amid global headwinds

Aramex 1Q 2023 net income falls 49% y-o-y, revenues remain almost flat: Global logistics provider Aramex’s net income plunged 49% y-o-y to AED 47.3 mn in 1Q 2023, amid a decline in global shipping volumes and inflationary pressures, according to its earnings release (pdf). Interest expenses associated with its acquisition of e-commerce platform MyUS and currency devaluations in some of Aramex’s markets also dragged down revenues, which fell marginally by 1% to AED 1.43 bn, according to the statement.

The breakdown: Its freight forwarding division saw revenues fall 1% to AED 385 mn, while its logistics and supply chain solutions division saw revenues fall 5% to AED 107 mn. Revenues for domestic express fell 4% to AED 362 mn on the back of FX impacts in Egypt, Lebanon, South Africa and other MENAT countries, the earnings release said. The International Express unit, on the other hand, saw 1% growth in revenues to AED 567 mn. Performance was buoyed by the company’s operations in the GCC — which accounted for 39% of total revenues — and “solid revenue growth in Europe and North America outbound markets,” the earnings release added.

Also helping buoy operations: The company moved to hedge exposures to FX fluctuations by taking on more USD-denominated contracts, the company said.

Looking ahead: “The continued growth in the GCC economies, and the expectation that inflationary pressures around the world may peak and then decline significantly show some signs of optimism towards the end of the year,” CEO Othman Aljeda said, adding that the key differentiator for the company in the months ahead is its “ability to invest in technology, along with our geographic and business line diversification which offers competitive advantage.”

UAE holds bilateral trade talks + plans to help Seychelles with Airport and Port Victoria development. PLUS: GCC to unify goods as “local,” Qatar boosts ties with Azerbaijan

TheUAE’s FM holds bilateral meetings to boost trade: UAE Foreign Trade Minister Thani bin Ahmed Al Zeyoudi held bilateral meetings with senior ministers and officials from Jordan, Egypt, Lebanon, Iraq, Uzbekistan, Sri Lanka, Congo, Malawi, Burkina Faso, Tanzania, and the African Free Trade Association, at the 12th Annual Investment Meeting, Emirati state news agency WAMreports. Al Zeyoudi explored ways to help boost trade its non-oil trade to AED 4 tn (USD 1.09 tn) by 2031, WAM adds.

UAE to help Seychelles with two infrastructure development projects: Abu Dhabi and Seychelles will form a technical team to conduct final planning works for the Seychelles International Airport, while a a technical team from AD Ports will provide a complete audit report for Port Victoria by the end of this month, Seychelles state news agency reports. The audit will include infrastructure, shipping, and trade aspects which will pave the way for the development projects later on.

GCC states have agreed to categorize all member states’ products as “local” products within member countries, according to state-owned Saudi Press Agency (SPA). The agreement came out of consultative meetings on Thursday between GCC trade ministers and heads of federations and chambers of GCC countries in Muscat, Oman. President of the Federation of Gulf and Saudi Chambers Hassan bin Mujib Al-Huwaizi praised the effort and called for more cooperation on trade and commerce between GCC countries, according to SPA.

More details on KSA + South Korea’s MoUs on transport, road development: Saudi Arabia and South Korea will cooperate on research and development, promote the adoption of clean energy technologies, align policies and legislation for self-driving vehicles, and address challenges related to the adoption of modern technologies in the transportation sector, under agreements they inked together recently, according to a more recent statement. The two sides will also work on establishing a research center and benefiting from each other’s expertise in road construction and aviation, as well as cooperate on asset management, operations, and improving road safety.

ALSO WORTH KNOWING-

Qatar and Azerbaijan want to boost diplomatic ties, including in trade, joint economic forums and bilateral meetings. (The Peninsula)

Slowbalization trend signals subdued growth in global trade. PLUS: The latest on diesel-powered trucking, B2B logistics startups, COSCO and Amazon

The worst of the global trade slowdown is likely over, but a rapid recovery is not expected, Bloombergreports. Five of the 10 indicators on the Bloomberg Trade Tracker remained below normal levels in mid-May, as key ports worldwide witnessed a decline in shipping and export volumes. Sentiment remains low, but it is slowly improving as shipping delays and raw material costs normalize.

New orders signal that better days are coming, but growth will likely be moderate, Bloomberg writes. The "slowbalization" trend — which refers to a considerable slowdown in cross-border flows and investment after a rapid phase of globalization — indicates that any potential recovery in trade will probably be “subdued,” the news information service writes. The reopening of China's economy might boost consumer demand, but it is not clear whether it will be enough to counterbalance the downturn in the US and Europe.

Up to half of the USD 4 tn diesel-powered freight truck market can make the switch to EVs on a cost-efficient basis, CNBC quotes Swedish EV trucking startup Einride’s CEO Robert Falck as saying. Einride’s ultimate goal is fully autonomous EV trucking, however, that may take up to 25 years to achieve, Falck says.

ALSO WORTH KNOWING-

Funding for logistics startups is drying up as the covid-19 pandemic subsides and funders are becoming more selective with their seed and mid-stage investments amid an environment of heightened interest rates. (Wall Street Journal)
Chinese shipping firmCOSCOwill acquire a 24.99% stake inHamburger Hafen und Logistik’s Container Terminal Tollerort (CTT) at Hamburg Port after receiving the greenlight from the German government on 10 May. (Statement)
E-commerce giant Amazon has overhauled its logistic network, prioritizing domestic shipping and placing commonly bought products closer to customers in areas that often buy them, in an effort to cut back on travel times across the US and improve efficiency and profitability. (Wall Street Journal)

Brazilian mining firm Vale eyes rail link between facilities in UAE + Oman. PLUS: News from Hexcel, Air Arabia, Wizz Arabia, Mahindra Logistics + Suez Canal Authority

RAIL-

Oman and Etihad Rail Company and Brazilian mining firm Vale are looking into connecting Vale’s facilities in Oman and the UAE via rail, according to a press release. The two sides signed a memorandum of understanding (MoU) to work on developing “integrated logistical solutions” to ship iron ore and derivatives from Vale’s industrial hub in Oman’s Sohar Port and Freezone to a network of factories and distribution points in Vale’s “planned mega-industrial complex” in the UAE, according to the release.

About Oman and Etihad Rail Company: Etihad Rail and Oman Rail signed an agreement late last year to create The Oman and Etihad Rail Company. The entity is co-owned by Oman and the UAE’s governments and yields USD 3 bn in capital slated for the design, development, and operation of railways linking Oman’s Sohar Port with the UAE’s national railway network. The transport link between the UAE and Oman, first announced in September, is aimed at bolstering trade between the two countries and the region. The rail line will serve both passenger and freight trains.

MARITIME-

SCA + Alexandria Shipyard to build two tugboats:The Suez Canal Authority (SCA) has inked an agreement with Alexandria Shipyard, a subsidiary of Egypt’s military-owned Marine Industries and Services Organization, for the construction and supply of two tugboats, Al Borsa reports. The tugboats, which will be designed by Norwegian marine solutions provider Kongsberg Maritime will be 71.6m long, 18.5m wide, and will be able to pull vessels weighed up to 190 tonnes, according to the news outlet.

SOUND SMART- A tugboat is a vessel that moves other vessels around by pulling or pushing them through direct contact or a tow line.

AVIATION-

Indian logistics solutions providerMahindra Logistics has launched cargo charter operations in the Middle East, with headquarters based out of Dubai, according to a press release.The company will partner with customers in the electronics, consumer durables, pharma, and engineering sectors, and will service the MENA region with dedicated aircrafts, the company said.

Hexcel inaugurates expansion of manufacturing plant in Morocco: Aeronautic Manufacturer Hexcel inaugurated an expansion of its manufacturing plant in Morocco to accommodate increased demand from the aerospace industry for lightweight advanced composites, Moroccan state news agency Map Newsreports. The expansion will double the size of the plant, which is located in the Midparc Free Trade Zone in Casablanca, to 24k square meters. Its workforce is also expected to increase from 145 employees to around 400. The plant turns lightweight honeycomb materials into engineered core parts that are used for lightweight aerospace parts like engine nacelles and helicopter blades.

ALSO WORTH KNOWING-

Sharjah-based budget airlineAir Arabiawill launch daily direct flights between Sharjah andBangkok starting 30 June. (Statement)
Wizz Airwill introduce four flights fromEgypt’s Sphinx Airport to Italy starting mid-June.(Egypt Independent)

Calendar

MAY

May: The Suez Canal Economic Zone (SCZone) plans to hand over a new 1k-meter container berth to the East Port Said Port.

May: The ArabAcademy for Science, Technology and Maritime Transport (AAST) will roll out its first locally-made electric cargo transport vehicle.

15 May (Monday): Exports + FDI Forum, Four Seasons Hotel Cairo at Nile Plaza, Cairo, Egypt.

15-16 May (Monday-Tuesday): Middle East Rail, Abu Dhabi National Exhibition Centre, Abu Dhabi.

15-16 May (Monday-Tuesday): Mobility Live Middle East, Abu Dhabi National Exhibition Centre, Abu Dhabi.

15-16 May (Monday-Tuesday): The Road and Traffic Expo, Abu Dhabi National Exhibition Centre, Abu Dhabi.

15-17 May (Monday-Wednesday): Global Fleet Conference, Cascais, Portugal.

15-19 May (Monday-Tuesday): The UAE Maritime Week.

16-17 May (Tuesday-Wednesday): Africa Forum of Investment and Commerce, Sheraton Hotel, Algiers, Algeria.

16-18 May (Tuesday-Thursday): Seatrade Maritime Logistics Middle East, Dubai, UAE.

16-18 May (Tuesday-Thursday): Baltic and Black Sea Ports & Shipping, Radisson Hotel & Suites, Gdansk, Poland.

16-18 May (Tuesday-Thursday): Seatrade Maritime Logistics Middle East, Dubai, UAE.

16-18 May (Tuesday-Thursday): IATA Ground Handling Conference, Abu Dhabi National Exhibition Center, Abu Dhabi.

16 - 23 May (Tuesday-Tuesday): Subscription window for retail Investors, ADNOC L&S IPO

16 - 24 May (Tuesday - Wednesday): Subscription window for institutional investors, ADNOC L&S IPO

18 May (Thursday): UN-Turkey-Russia Black Sea grain agreement extension expires.

18-19 May (Thursday-Friday): XIV International Russia—Islamic Wold: KazanForum, Kazan Expo, Kazan, Russia

24 May (Wednesday): Fleet and Mobility Summit, Dubai.

29-31 May (Monday-Wednesday): Translogistica Libya 2023, Misurata, Libya.

29-31 May (Monday-Wednesday): Electric Vehicle Innovation Summit 2023 Adnec, Abu Dhabi

JUNE

June: Suez Canal Economic Zone holds a roadshow in Delhi.

1 June (Thursday): Listing of shares on ADX, ADNOC L&S IPO

6-7 June (Tuesday-Wednesday): Ports and Customs Week, Cape Town, South Africa.

12-15 June (Monday-Thursday): Saudi Plastics & Petrochem, Riyadh, KSA.

14-16 June (Wednesday-Friday): International Conference on Models and Technologies for Intelligent Transportation Systems, Nice, France.

20-23 June (Tuesday-Friday): Conference on the Marine Transportation System Innovative Science and Technologies Toward Greater Sustainability, Washington, DC, US.

JULY

1 July (Saturday): A new greenfield liquid bulk terminal in Khalifa Port Abu Dhabi will kick off operations.

16-17 July (Thursday-Friday): The Levitate Conference and Exhibition, St. Regis Amman Hotel.

24-25 July (Monday-Tuesday): ICSG Istanbul, Istanbul Lutfi Kirdar Convention & Exhibition Centre, Istanbul.

SEPTEMBER

5 September (Tuesday): The Leaders in Logistics KSA Summit, Riyadh.

20-22 September (Wednesday-Friday): Transport Evolution Africa Forum and Expo, Inkosi Albert Luthuli ICC Complex (Durban ICC), South Africa.

OCTOBER

3-5 October (Tuesday-Thursday): Smarter Mobility Africa Summit, South Africa.

NOVEMBER

1 November (Wednesday): Smart Maritime Network Dubai Conference, Conrad Dubai, UAE.

14-15 November (Tuesday): Supply Chain & Logistics Arabia, Narcissus, Riyadh, Saudi Arabia.

15 November (Wednesday): Leaders in Logistics UAE Summit, Dubai.

21-23 November (Tuesday-Thursday): Intermobility Expo 2023, Dubai World Trade Center, Dubai, UAE.

EVENTS WITH NO SET DATE

2H2023:Construction of Neom’s first hydrogen fueling station will kick off.

2H2023: Expansion of Baghdad International Airport to begin.

2024

FEBRUARY 2024

12-13 February (Monday-Tuesday): Breakbulk Middle East conference, Dubai Trade Centre.

12-15 February (Monday-Thursday): African Air Expo, Cape Town.

28 February-1 March (Wednesday-Friday): MENA Transport Congress and Exhibition 2024, Dubai.

MARCH 2024

12-14 March (Tuesday- Thursday): IATA World Cargo Symposium, Hong Kong International Airport.

MAY 2024

2-3 May (Thursday-Friday): Geneva Dry, Geneva, Switzerland, Hotel President Wilson.

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.

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