Khazna to build the UAE’s largest data center

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What we're tracking today

TODAY: Khazna to build the UAE’s largest data center + DP World, Masdar eye investments in the Philippines

Good morning, friends. We have a steady stream of updates to unpack this morning, with news from the UAE, KSA and beyond as our regional players continue to expand their borders. But first, are we looking at a possible Chapter 11 as the ending for the Boeing saga?

THE BIG LOGISTICS STORY- Boeing shores up finances: Boeing aims to raise USD 25 bn through stock and debt offerings and another USD 10 bn through credit from major lenders, Reuters reports. The latest move comes as the company struggles to maintain its credit rating, which is currently a notch above junk, and ahead of USD 11.5 bn of the company’s debt maturing through 1 February 2026

Hopping from crisis to crisis: The company has suffered major losses for three consecutive quarters as it battles delays in deliveries, accidents and issues in parts manufacturing, and a costly ongoing machinist strike which has cost the firm USD 5 bn so far as it enters its fifth week.

Some are not convinced: “Unless the company is able to raise funds through a rights issue, I see an imminent investment downgrade with Chapter 11 looming on the horizon,” Emirates Airlines President Tim Clark told the aviation industry publication Air Current earlier this week.

The story has grabbed a lot on ink in the int’l press: Reuters | Bloomberg | Financial Times | The New York Times | The Wall Street Journal

WATCH THIS SPACE-

#1- IFC finalizes Egypt’s airport management transfer plan: The International Finance Corporation (IFC) has submitted its technical study and proposed timeline to the Egyptian government for handing over management of airports to the private sector, unnamed sources told Al Arabiya. The plan reportedly involves offering the management and operation of 20 of the country’s airports as part of the country’s privatization push.

We’ve been on the lookout for airport privatization news since Egyptian Prime Minister Madbouly said earlier this week that some “important” privatization news regarding airports and banks would be announced soon. The Madbouly government first revealed plans in November 2023 to invite private sector players — including foreign companies — to take over the management of airports in the country.

ALSO- SCZone gets ready to launch large-scale green hydrogen projects: Five large-scale green hydrogen projects will kick off construction within a year on five plots of land currently being prepared by the Suez Canal Economic Zone, the SCZone’s executive director told Al Mal. The projects should be completed within four years, Saad added.

The zone’s first water desalination public-private partnership is also set to be launched, which will be used to help produce green hydrogen in the zone, Saad added.

#2- Iran Air canceled all Europe-bound flights hours after the EU announced new sanctions on Iran, with passengers receiving news of the cancellations via SMS, the airline’s customers told Euronews. The EU has included Iran Air, Mahan Air, and Saha Air in a list of new sanctions on Iranian entities and individuals over their alleged involvement in Iranian transfers of ballistic missiles to Russia, Reuters reported.

Background: The US has said that it has knowledge of Iran’s participation in Russian arm trades, Reuters reports. The US has since imposed sanctions on Iranian and Iranian affiliated ships and companies it has identified to be involved in the weapons transfers.

#3- The recent US sanctions on Iran are anticipated to restrict crude oil shipments to China, as well as make these barrels less competitive due to a shortage of vessels and increased shipping costs in the short term, Chinese refinery and trade sources told S&P Global. The impact of the sanctions may leave China’s independent refiners, the largest customers of Iranian crude, to consider alternative supply options. Some 30 vessels carrying Iranian crude were discharged for China’s independent refineries in September, six of which appeared on the US’ latest sanction list.

Background:The US imposed sanctions last week on any person operating in Iran’s petroleum and petrochemical sectors following Iran’s attack on Israel.

#4- TCI Sanmar Chemical eyes new investment + sea dock in Egypt: Indian industrial firm TCI Sanmar Chemical has announced plans to invest USD 300 mn to expand its production capacity in Egypt, according to a statement. The company also intends to study establishing a new pier west of Port Said.

MARKET WATCH-

#1- Oil prices rose in early morning trading as uncertainty remains over whether regional tensions will affect supply, Reuters reports. Brent crude futures slid up USD 0.14 to trade at USD 74.39 per barrel by 02.50 GMT, while US West Texas Intermediate (WTI) futures rose USD 0.19 to trade at USD 70.77 per barrel. Oil prices plummeted over 4% to a near two-week low yesterday as fears eased regarding Israeli retaliation on Iran and due to weaker demand outlook.

Opec+ trimmed its forecast for China’s crude oil demand growth forecast to 580k barrels per day (bpd) in 2024, Reuters reports. The estimate is down from the 650k bpd gain forecast in September, and is 180k bpd below the previous predicted rise of 760k bpd back in July.

The International Energy Agency (IEA) expects an expansion in global oil demand to 1 mn bpd for next year, and demand to rise this year by 860k bpd, Reuters reports. The IEA, which manages industrialized countries’ emergency oil stocks, said public stocks were over 1.2 bn bpd and spare capacity in Opec+ is at historic highs. The IEA is ready to act should any major disruptions occur, but for now the market is faced with a sizable surplus in the new year.

#2– Baltic index dips again: The Baltic Exchange’s dry bulk sea freight index — which tracks rates for the capesize, panamax, and supramax vessel segments — dropped 2.6% to 1,766 points on Tuesday. The capesize index shed 105 points to 2,773 points, while the panamax index dropped 45 points to 1,364 points. The smaller supramax fell two points to 1,260 points.

DATA POINT-

Suez Canal revenues down Red Sea tension continues: The Suez Canal Authority (SCA) has seen a 23.4% y-o-y drop in revenues to USD 7.2 bn during FY 2023-2024, Egypt Today reports, citing comments by SCA chairman Osama Rabie. Vessel transits also fell by 22.2% y-o-y to 20k ships passing through the canal, Rabie said at the Global Logistics Forum.

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CIRCLE YOUR CALENDAR-

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.

Saudi Arabia will host the Saudi Airport Exhibition on Monday, 11 November and Tuesday, 12 November in Riyadh. The two-day exhibition will bring together global industry leaders to discuss the latest technologies around the world in the aviation industry. It looks to encourage discussion between Saudi aviation leaders and the global supply chain industry.

The UAE will host the ADIPEC Maritime and Logistics Exhibition and Conference on Monday, 11 November and Thursday, 14 November in Abu Dhabi. The event looks to explore ways to reduce emissions through innovative solutions. It will bring together industry leaders, regulators and decision makers in the global maritime and logistics sector.

Bahrain is set to host The Bahrain International Airshow on Wednesday, 13 November and Friday, 15 November at the Sakhir Airbase. The three-day event is bringing together over 180 participating companies from over 59 represented nations globally.

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

Khazna builds the UAE’s largest data center

UAE’s Khazna Data Centers will develop the UAE’s largest data center in Ajman with a capacity of 100 MW, according to a press release. Set for completion in 3Q 2025, the new facility is (surprise) designed for AI applications. Khazna is the largest player in the industry by market share, operating centers with a combined capacity of 360 MW right now.

The rationale: The company is expecting data center capacity in the UAE to double to 850 MW by 2029, so it aims to take advantage of the growing demand, CEO Hassan Al Naqbi told The National. Demand is being driven by both domestic use of cloud services and growing international investment in tech here.

The company is also eyeing two additional 30 MW data centers, Al Naqbi said, suggesting announcements on that front will come within a matter of weeks.

Total investment cost? The average cost of construction of a data center clocks in at USD 8-12 mn per MW, Al Naqbi says, suggesting a total investment plan of about USD 720 mn by our math. Khazna currently has 24 live data centers in the UAE and eight under construction, amounting to a 74% market share, he added.

REMEMBER- The Dubai-based firm recently partnered with US cloud service provider Hewlett Packard Enterprise to build the UAE’s first direct-liquid cooled data center, capable of handling AI tech and high-performance computing.

Khazna plans to expand further into the Middle East and Asia. It is closing in on the location for a USD 250 mn data center in Egypt (set for completion in 2026) and is in advanced stages of construction in Saudi Arabia. Turkey and Southeast Asia are also on its radar.

DP World and Masdar eye investments in the Philippines

Masdar and DP World are eyeing infrastructure and energy projects in the Philippines, that country’s Trade and Industry Department said in a statement yesterday.

DP World is reportedly looking to invest as much as AED 1.6 bn in ports across the Philippines (the Philippines’ acting trade secretary suggested a number of ports could be up for grabs soon), while Masdar is interested in solar, wind, and geothermal power generation.

The situation has been brewing: DP World has been eyeing potential investments for a logistics hub and an industrial park in the Philippines since earlier this year in February. The collaboration between DP World and the country’s DTI means to develop the logistics sector in the Philippines, including industrial parks, economic zones, and digital solutions.

DP has already laid footprints: DP World has been expanding in the Philippines. The Dubai-based port operator and Philippines-based port operator Asian Terminals Inc. (ATI) launched in April the new Tanza Barge Terminal in the Philippines’ Cavite.

More agreements from KSA’s Global Logistics Forum

More updates are still streaming in from KSA’s Global Logistics Forum which wrapped up on Monday. Here’s all the latest cargo, aviation, zones and warehousing agreements signed by regional logistics players.

REFRESHER- Saudi Arabia reportedly inked 69 agreements worth over SAR 17 bn during the first day of the forum in Riyadh on Sunday.

SAUDIA CARGO-

Saudia Cargo signed an MoU with the Royal Commission for AlUla (RCU) to boost air cargo operations and logistics services, according to a statement. The partnership aims to streamline operations for air freight transport, exchange expertise on logistic advancements, and provide logistical backing for AlUla initiatives.

The airfreight flag carrier also inked an MoU with Saudi aviation firm Cluster2 to improve air freight and logistics operations, according to a statement. The cooperation looks to increase air freight capacities, enhance land transportation connectivity with airports, and implement competitive pricing strategies.

KING SALMAN AIRPORT-

KSIADC inked a stack of agreements: King Salman International Airport Development Company (KSIADC) inked an agreement with the Special Integrated Logistics Zone (SILZ) to enhance operational coordination and infrastructure to boost air cargo capabilities, according to a statement.

There’s more: The airport also partnered with delivery giant FedEx to improve logistics solutions and enhance supply chains at the airport by integrating new logistics and distribution practices, the statement added. KSIADC also joined the International Air Cargo Association (TIACA) to boost its market share and operational efficiency, which is in line with Saudi Arabia’s plan to establish itself as a leading logistics hub.

MODON-

Modon signed several warehouse agreements: The Saudi Authority for Industrial Cities and Technology (Modon) inked a SAR 50 mn agreement with Hello Partner Logistics Services Company to allocate 48k sqm of land to establish 3PL/4PL warehouses to streamline supply chain operations for food, commercial, and tourism industries, according to a statement.

Another for Sawala: Modon signed a SAR 35 mn agreement with Suaud’s storage firm Sawala to establish 3PL/4PL warehouses over 54k sqm in Jeddah’s Third Industrial City, according to a statement.

And another for Imdad: The authority inked a SAR 50 mn contract with Imdad Storage Company to allocate 26k sqm of land in Sudair City to develop 3PL/4PL warehouses to boost supply chains in the pharmaceutical and medical industries sectors, according to a statement.

ZONES AND PORTS-

#1- SPL + Ecza partner up to boost logistics services: Saudi Post Corporation’s (SPL) National Address inked an MoU with Economic Cities and Special Zones Authority (ECZA) to strengthen logistics services for investors across the Kingdom’s Special Economic Zones (SEZs), according to a statement.

#2- Tharawat Alqata + Masarat to operate within KAEC: ECZA awarded to eligible criteria certificates to Tharawat Alqata Industries Company and Automotive Solution Company for Logistic Services (Masarat Mobility Park) to establish facilities in King Abdullah Economic City Special Economic Zone (KAEC SEZ), according to a press release.

#3- Mawani + Zatca + Transport and Logistics Services Ministry sign tripartite agreement: The Saudi Port Authority (Mawani), the Zakat, Tax, and Customs Authority, and the Saudi Transport and Logistics Services Ministry inked a cooperation agreement to empower shipping brokers to handle joint containers and establish regional centers at Saudi ports, according to a press release.

OTHER AGREEMENTS-

TGA + RDIA partner up to boost innovation: The Transport General Authority (TGA) inked an agreement with the Research Development and Innovation Authority (RDIA) to advance smart transportation systems across the Kingdom. (Statement)

Pulling the curtain back on the murky ownership of Russia’s Shadow fleet

How does Russia get ships for its shadow fleet? Russia has assembled a fleet of some 400 so-called dark vessels and counting — and is currently moving around 4 mn barrels of oil per day — partly through a special purpose company set up in the Marshall Islands, the Financial Times reported last week, citing corporate records and correspondence it has obtained. Since Western sanctions on Russian oil exports were first imposed in December 2022, Russia has relied on offshore corporate structures to evade Western officials and make it difficult to determine the ownership of the tankers, the manner in which they were obtained, or who manages their operations.

The details: Russia’s Lukoil financed a 74-year-old British accountant, John Ormerod, through its shipping division to purchase the Canis Power and at least 24 other second-hand tankers from December 2022 to August 2023, totaling over USD 700 million. Each tanker was acquired by a distinct special purpose company that Ormerod established in the Marshall Islands, while Lukoil’s Dubai-based Eiger Shipping DMCC provided the funding by making advance payments to charter the ships.

Breamer took a hit: Shares of London-listed shipbroker Braemar have declined 11% in the past two days in response to the report, the Financial Times reported on Friday. Braemar was fully aware the vessels were being acquired for — and financed — by Eiger, the accountant lawyer and source familiar with the matter told the FT. Braemer confirmed it has served as the broker for at least nine of the purchases, but declined to comment on its knowledge of Eiger’s involvement. “For every transaction that Braemar considers undertaking, it conducts all appropriate due diligence with know-your-customer checks, legal, compliance and regulatory adherence,” it said in a statement.

Russia boosted the capacity of its shadow fleet by some 70% y-o-y despite Western sanctions, according to a report from the Kyiv School of Economics seen by the Financial Times. The volume of Russian oil transported via dark vessels jumped to 4.1 mn bpd in June 2024, up from 2.4 mn bpd the year prior. “Sanctions on tankers have been quite effective but the designation campaign has been too limited to actually rein in Russia’s shadow fleet,” said Benjamin Hilgenstock, one of the report’s authors.

The vessels have transported some 120 mn barrels of Russian crude, amounting to an estimated USD 7.2 bn in exports. Ormerod sought legal advice and undertook “extensive due diligence” to make sure the aforementioned purchases did not violate any sanctions, lawyers representing Ormerod told FT. Lukoil Litasco Middle East also told the news outlet that it has operated in “strict compliance with all relevant laws.”

Russia’s using subterfuge: Russian oil companies and trades have purposefully sought out non-Russia owners and operators to “create as much distance between Moscow and the shadow fleet as they could,” Harvard University expert on the subject Craig Kennedy told FT. Russian firms have spent over USD 10 bn on purchasing second-hand vessels since 2022, Kennedy believes.

The response: Western governments have begun applying restrictions on individual vessels believed to be a part of the shadow fleet, with seven of the 25 vessels acquired by Ormerod being sanctioned by the UK or EU.

UK cracks down: The UK placed sanctions last month on 10 additional Russian ships as part of an effort to crack down on Russia’s use of its shadow fleet to circumvent sanctions. All 10 vessels were previously overseen by UAE firm Oil Tankers SCF MGMT FZCO, which was used by Russia shipping company Sovcomflot.

Saudi Arabia + Philippines sign cooperation agreement

Saudi Arabia + Philippines sign energy sector cooperation agreement: Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman bin Abdulaziz inked an MoU with the Philippines Energy Secretary Raphael Lotilla on cooperation in the energy sector, SPA reports. The agreement aims to enhance cooperation in petrochemicals, oil and gas, renewable energy, electricity, energy efficiency, and circular carbon economy tech. The agreement also aims to strengthen cooperation in digital transformation and innovation, cybersecurity, and AI.

Regional logistics players snap up spots in Forbes Sustainability Leaders 2024

Forbes names Middle East’s 2024 Sustainability Leaders: Forbes has released its Middle East Sustainability Leaders 2024 list featuring leading individuals and companies. The UAE came out on top with 54 companies on the list, followed by Saudi Arabia with 20 and Egypt with 10. Qatar came fourth with eight companies, followed by Bahrain and Kuwait with five each, and three in Oman. The assessment criteria involved an analysis of sustainability and ESG reporting across the region, and looked at improvements in emission reductions, renewable energy and energy efficiency, and management of waste, water, and other resources.

Who made the list? The top spots from the transport and logistics sector include DP World’s Sultan Ahmed bin Sulayem, AD Ports Group’s Saif Al Mheiri, Agility’s Tarek Sultan, Asyad Group’s Abdulrahman Al Hatmi, Nakilat’s Abdullah Al-Sulaiti, Bahri’s Ahmed Ali Alsubaey, Etihad Rail’s Shadi Malak, and Milaha’s Fahad Bin Saad Al-Qahtani.

Updates on warehousing, startups, customs, and supply chains from Egypt, KSA, Iraq, and Qatar

STORAGE + WAREHOUSING-

Batic Real Estate began construction on a high-risk storage warehouse on a 10k sqm plot in Al Manakh district, according to a disclosure to Tadawul. It also secured an agricultural construction license from the Ministry of Environment, Water and Agriculture to develop cooling and freezing warehouses on 50k sqm of its 104k sqm site along Al Kharj road, with further approvals underway.

STARTUP WATCH-

Egypt’s WellPal relocates to KSA: Egypt’s healthcare e-commerce platform WellPal — powered by Flat6 Labs — has relocated to Saudi Arabia after securing an undisclosed investment from an angel investor, Wamda reports. The company is also eyeing regional expansion and establishing partnerships with local and international health bands to upgrade its platform and deliver a more seamless user experience.

What does WellPal do? The company uses a dropshipping business model that utilizes technology to link consumers with a carefully selected array of health and wellness products from trusted suppliers and vendors, according to the statement. This approach simplifies the supply chain, enabling WellPal to provide a diverse range of products without needing to maintain inventory or handle fulfillment logistics.

OTHER STORIES WORTH KNOWING THIS MORNING-

Emirates to resume flights to Basra: The UAE’s Emirates will resume flights to Basra in southern Iraq on 17 October, while flights to and from Baghdad and Iran’s capital Tehran remain canceled till 23 October. Beirut flights will remain on hold till 31 October. (Statement)
Air Arabia adds Morocco-Italy service: The UAE’s Air Arabia is launching a new twice weekly direct route between Morocco’s Fez Sais International Airport and Italy’s Milan Bergamo Airport starting 15 December 2024. (MWN)
Iraq ready to join TIR Convention: Iraq’s General Company for Land Transport is set to sign a contract with the Iraqi Customs Authority to announce Iraq’s readiness to join the TIR (International Road Transport) Convention, which aims to streamline and standardize the administrative procedures for international road transport. (Statement)

China’s car + ship exports hit new highs in September

China’s car and ship exports surged to record highs in September despite a slump in general shipments, Bloomberg reports. Chinese firms shipped over USD 11.5 bn worth of vehicles in September, making the year-to-date total some USD 88 bn. Companies sold 464 ships internationally, amounting to over USD 4.6 bn, more than double the quantity sold the same month last year. The sudden jump in higher-valued manufactured goods exports has raised concern among the countries set to impose tariffs on Chinese EVs, including Canada, the US, and the EU.

It doesn’t stop there: China’s steel exports rose to 10.2 mn tons in September, bringing the year-to-date volume to some 81 mn tons, a 21% y-o-y increase and the highest level since 2016, Bloomberg reports. The surge in exports is attributed to a lull in the domestic market, which has prompted traders to push their products overseas. China is expected to export over 100 mn tons of steel by the end of this year, with the bulk going to Asian nations.

REMEMBER– Turkey announced plans last week to impose anti-dumping duties on steel imports coming in from China, Russia, India and Japan to crack down on unfair competition following appeals from domestic producers.

Calendar

OCTOBER

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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