KSA’s AviLease to supply SDH Wings with up to 20 new technology aircraft

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TODAY: KSA’s AviLease to supply SDH Wings with up to 20 new technology aircraft

Good morning, nice people. We have another brisk issue for you this morning as the news cycle slows down ahead of the weekend.

THE BIG LOGISTICS STORIES- Saudi PIF-owned aircraft lessor AviLease and Chinese aircraft lessor SDH Wings have inked an MoU for the supply of up to 20 new technology aircraft and The African Development Bank will disburse EUR 246 towards construction of Morocco’s Guercif-Nador highway project.

^^ We have everything on these stories and more in the news well, below.

DISRUPTION WATCH-

IT’S OFFICIAL- The US sends in a naval coalition to counter Red Sea attacks: The US is heading a 10-nation maritime safety coalition to protect Red Sea and Gulf of Aden shipping routes from Houthi attacks, according to a statement by the US Department of Defense. Aside from the US, the members of the coalition are the UK, Bahrain, Canada, France, Italy, the Netherlands, Norway, Seychelles, and Spain. Some countries will conduct joint patrols while others will provide intelligence support. The mission will be coordinated by the existing Combined Task Force 153.

What they said: “Countries that seek to uphold the foundational principle of freedom of navigation must come together to tackle the challenge posed by this non-state actor,” US Defence Secretary Lloyd Austin said in the statement.

Houthis denounce the coalition: “The Yemeni Armed Forces [the Houthis] will turn the Red Sea into a graveyard of the US-led coalition if the alliance decides to take any action against Yemen,” said Major General of the Houthi government Mohammad al-Atifi, Mehr reports.

Shipping has already been disrupted by the attacks: BP announced earlier this week that it would halt all tanker transit through the Red Sea as a precautionary measure over Houthi attacks. Norwegian oil firm Equinor, Belgian oil tanker firm Euronav, and Norway’s Frontline have all made similar announcements over the past 24 hours, Reuters reports. German container shipping line Hapag Llyod and Taiwanese Yang Ming Marine Transport have said they will all divert ships from the Red Sea route to the Cape of Good Hope.

WATCH THIS SPACE #1-SCA and Bahri meet to explore cooperation: Egypt’s Suez Canal Authority (SCA) Chairman Osama Rabie and Egyptian Transport Minister Kamel Al-Wazir met with a high-level delegation from Saudi national shipping company Bahri, headed by BOD Chairman Hisham Al-Khalidi, to discuss boosting cooperation in maritime transport, according to a statement.

Details: The officials evaluated investments in maritime transport and potential cooperation in building and scrapping ships. The SCA aims to develop and modernize Egypt’s naval fleet and support Egyptian exports and imports to ensure secure supply chains for dry bulk goods, the statement said. Bahri expressed its aspiration to cooperate with the SCA in maritime and logistical projects to serve their mutual development goals. The two sides also discussed expanding their partnership to allow for the exchange of expertise and the transfer of technology.

WATCH THIS SPACE #2-Is ADQ eyeing DB Schenker? Abu Dhabi sovereign wealth fund ADQ may submit a bid for the acquisition of freight forwarder DB Schenker, as state-owned German railway company Deutsche Bahn looks to offload the company, Air Cargo News reported, citing German newspaper Handelsblatt. Despite some in the German government being averse to transferring ownership of a strategically important company to a GCC state, ADQ is expected to make a competitive offer that will provide funds for improvements to Germany’s railways. Deutsche Bahn kicked off the sales process for DB Schenker yesterday, with the sale expected to be worth up to USD 21.8 bn, Reuters reported, citing sources with knowledge of the matter.

WATCH THIS SPACE #3-Iran + India close to finalizing Chabahar port agreement: India is reportedly set to finalize the investment contract for the development of Chabahar Port soon, Tasnim News Agency reports, citing Iran’s Ports and Maritime Organization chief executive Ali Safaei. India has so far poured USD 25 mn into developing the Beheshti Port of Chabahar with a majority of the funds funneled towards gantry and coastal cranes, Tasnim writes.

We’ve been here before: The agreement on Chabahar port was reportedly close to being finalized back in September on the sidelines of the Iran Rail Expo. India and Iran had mostly settled issues to do with the terms of the contract for the port development, with only one paragraph remaining to be settled. The two sides were expected to finalize the long-term agreement by early October. The two countries, which have been relying on short-term one-year agreements for the development and running of the terminal at Chabahar Port, have been looking to implement a longer term, self-renewing 10-year agreement. They also recently agreed that they would not turn to commercial arbitration for disputes that arise between users and operators of the port.

ALSO- The Rasht-Caspian railway connecting Iran to the Caspian Sea will start operation starting next month, Tasnim News Agency reports. Domestic railway projects, including the Tehran-Qom and Tehran-Isfahan railways, are also set to be operational once certain “barriers” are settled.

WATCH THIS SPACE #5- The EU slaps more sanctions on Russia: The EU is enforcing the 12th package of sanctions against Russia including notification rules for the sale of tankers to any third country, Splash247 reports. The aim of the sanctions is increased transparency of secondhand carrier sale and export, tightening compliance rules implemented to reduce attempts to circumvent the pre-existing G7 price cap on Russian oil, Reuters reports. The sanctions include an import ban on LPG, with a one-year transition period, as well as Russian-origin diamonds and metal products, including foil, tubes, pipes, and copper and aluminum wires, effective 1 January 2024.

ICYMI- The US cracked down on oil shippers for violating Russia sanctions back in October. The G7 cap bans Western corporations from supplying maritime services for Russian seaborne oil exports sold above USD 60 a barrel.

MARKET WATCH-Fujairah marine bunker sales dropped to five-months low: November sales, excluding lubricants, dropped 6.7% m-o-m to 610k cubic meters, Reuters reported, citing Fujairah Oil Industry Zone data published by S&P Global Commodity Insights. The decline conforms to an overall drop in bunker fuel sales at major ports in November and comes as attacks on shipping in the region drive shippers to be more cautious, the newswire notes.

CIRCLE YOUR CALENDAR-

Iranian President Ebrahim Raisi will visit Turkey this month to discuss bilateral ties, as well as proposals by the Iran-Turkey Joint Chamber of Commerce for boosting bilateral trade, including through a potential trade agreement, state-aligned Tasnim News Agency quotes chairman of the chamber Mehrdad Saadat as saying. Saadat said that Iran’s trade with Europe could grow by taking advantage of Turkey’s trade capacities.

The Iran-UAE Joint Economic Cooperation Commission meeting will be held in the coming weeks in a bid to develop bilateral cooperation, deepen commercial ties, and boost trade. The location has yet to be announced.

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

AviLease to supply SDH Wings with up to 20 new technology aircraft

AviLease + SDH Wings ink preliminary agreement for aircraft: SaudiPIF-owned aircraft lessor AviLease and Chinese aircraft lessor SDH Wings have inked an MoU for the supply of up to 20 new technology aircraft, according to a statement. SDH Wings has already identified the first five new technology narrowbody aircraft from AviLease’s portfolio that are now under letter of intent, the statement notes. No financial details or a timeline for delivery has been disclosed.

The details: Under the terms of the agreement, AviLease will propose different portfolios of primarily new technology narrowbody aircraft from its portfolio and future acquisition pipeline, expanding SDH Wings’ portfolio of owned aircraft. The arrangement also allows SDH Wings’ majority shareholder Sichuan Development International Holdings (SDIH) and AviLease to bolster their relationship on their joint venture platform. AviLease acquired a 10% stake in SDH Wings as part of its recent acquisition of Standard Chartered’s aircraft leasing platform, the statement notes.

REMEMBER- PIF-backed AviLease acquired Standard Chartered’s aviation finance business in late August in a USD 700 mn transaction that saw it assume control of the division’s owned and managed portfolio of 120 aircraft.

What they said: “We consider there to be vast untapped potential in the Asian aviation industry and hope to leverage our close relationship with SDH Wings to access new markets as part of our growth strategy,” AviLease CEO Edward O’Byrne said.

About AviLease: Established in 2022, Riyadh-based AviLease is wholly owned by Saudi’s sovereign wealth Public Investment Fund. The outfit provides financing solutions and aircraft capacity to carriers via purchase and lease-back transactions, secondary portfolio acquisitions, and direct orders from aircraft makers, according to the company’s website.

AfDB extends USD 246 mn to construct the Guercif-Nador highway project

AfDB lends EUR 246 mn to Moroccan highway project: The African Development Bank (AfDB) will disburse EUR 246 towards construction of Morocco’s Guercif-Nador highway project, according to a statement. The funding package comprises EUR 200 mn from AfdDB with an additional USD 46 mn from the Africa Growing Together Fund. The major project is slated to upgrade Morocco’s transport infrastructure and boost logistics competitiveness, the statement said.

What project? The Guercif-Nador highway project looks to boost connectivity in Morocco’s Oriental region and will provide a link to the future port of Nador West Med and its business park. It will connect Nador, Guercif, and all other towns along the project’s corridor and will be integrated with the national road grid. The project is also poised to lower transport and vehicle maintenance costs, enhance road safety, and attract investments, the statement said.

Egytrans to complete acquisition of NOSCO in early 2024

Egytrans takeover of NOSCO pushed to early 2024: Egyptian transport and logistics company Egytrans will finalize its 99.9% acquisition of trucking outfit National Transport and Overseas Services Company (NOSCO) in early 2024, Egytrans CEO Abir Leheta told CNBC Arabia. The acquisition was set to wrap up this quarter, after it had been postponed from 1H 2023. “The acquisition will help us expand our fleet and operations and will enable us to enter new markets,” Leheta said.

Background: The acquisition will be executed through a share swap, which will see Egytrans shareholders holding a 70.17% stake in the merged entity — dubbed Egytrans NOSCO — and NOSCO shareholders holding the remaining 29.83%.

ICYMI- Earlier this week, the company unveiled plans to establish a SAR 10 mn (USD 2.7 mn) limited liability company in Saudi Arabia in partnership with the KSA’s Link Investments in 1Q 2024, with an initial capital of SAR 500k. The company will focus on wind projects during its initial push into the Saudi market in light of the Kingdom’s plan to increase the share of renewables in its energy mix to 50% by 2030, Leheta said.

An inside look at Egypt’s logistics sector: Recent disruptions to trade channels have driven multinational firms to double down on their supply chains leading to a demand in warehousing and more investments in Egypt’s logistics sector. We spoke withHassan Allam Holding Co-CEO Amr Allam (LinkedIn) to discuss what is coming up in their logistics pipeline and learn more about what Egypt needs to do to attract more investments in logistics.

Greenfield investments are the name of the game: Greenfield projects are at the core of Hassan Allam’s business model and benefit from the company’s operations in real estate and construction, Allam said. Despite being capital intensive, the process is methodical and easy to replicate once the appropriate contractual framework is in place and funding is secured.

How they do it: The company identifies a plot of land that is strategically located with access to utilities, buys it, develops the relevant infrastructure for a logistics park, builds it, and then leases it out to tenants. After leasing the property, the company continues to manage the park and provide services to its tenants, thereby earning itself additional revenue streams.

Projects are already in the works: Hassan Allam Holding has several greenfield projects in the pipeline, including a logistics park in East Cairo that is 45% complete in terms of construction and 70% leased. Other investments include a partnership with Egypt’s government for the storage and handling of strategic supplies in Luxor Governorate. The company is also in talks with a major international commodity trader to establish a grains hub for Africa in Egypt.

By the numbers: Greenfield projects take up the heaviest projected capex as each park requires up to EGP 2 bn for acquiring the land and building the infrastructure, Allam told us. With upwards of three such projects in the pipeline, together with the acquisitions, the company’s planned investments come up to about EGP 10 bn over the coming 24 months. All of these projects are currently underway, with the majority of the funding secured, he added.

A high proportion of the funding for logistics parks is debt: “The debt to equity ratio in these types of projects is usually 50-50,” Allam told us, with the company holding between 25-50% of the equity pumped into each investment.

Acquisitions are also on the radar: Brownfield investments are another approach the company follows, which involves acquiring smaller players with established warehousing capacity as well as cargo handling, palletization, and 3PL operations either in the vicinity of existing Hassan Allam parks or within airports.

And partnerships with established players: Hassan Allam Utilities’ collaboration with Agility in Yanmu Park — established a year and a half to two years ago — is an example. Hassan Allam reached out to Agility after acquiring the land for the park. Agility is big on investments in Africa’s logistics sector, and they wanted a local partner to help them broach Egypt’s market. Two-way knowledge transfers have been integral to the partnership, and there are plans to expand the Yanmu brand across Africa, Allam added.

Expansion plans: Although Hassan Allam’s logistics operations are limited to Egypt at the moment, the company recently acquired a controlling stake in CACC Cargolinx and plans to use it as a springboard for expansion into airport cargo operations in Africa. Airport cargo handling and off-ramp handling have some of the highest growth potential in the region, Allam told us. Africa, KSA, Morocco and Libya are lined up as next destinations for logistics operations expansions.

Startups are also attracting attention: The company has funneled investments towards logistics startups including Na’la, Maksab, and Bosta as a way to outsource some operations and integrate technological innovations into its operations. “In the past year and a half to two years, we have deployed USD mns in these technology plays,” Allam told us.

And data centers: The company has set aside space for possibly hosting data centers in the 20 to 25 MW range and above at logistics parks that are under development, Allam said. Although there are some regulatory obstacles to be worked out, the Egyptian government recognizes that data centers can be a major attractor for FDI, he said. Digitization has seen substantial progress through Nafeza, he added.

Golden licenses are speeding things up: “[The golden license process] didn’t take 90 days,” Allam said, but it streamlined their acquisition of necessary licenses and permits. A bigger problem lies in making government authorities cooperate with the license, he said.

Customs clearance is another sticking point: 100% of parcels entering Egypt via airports and other gateways are opened by customs, Allam said, whereas the figure in the US is closer to 3%. This puts a ceiling on the number of parcels that can be processed at Egypt’s ports. “If this doesn’t change, e-commerce will never grow to where we want it,” he added.

Nevertheless the sector’s outlook is positive: Hassan Allam Utilities and AP Moller Capital launched an integrated logistics platform for warehousing and handling services in Egypt. The fact that there is robust demand from big players for logistics investments in Egypt, despite the adverse macroeconomic climate, is a testament to the sector’s potential, Allam said. The strategic partnership between Hassan Allam Utilities and AP Moller Capital aims to deploy c. USD 200 mn of direct investments in the logistics industry, air freight, and warehouses in Egypt.

UAE and Egypt sign MoU to partner on data center expansion

UAE + Egypt ink MoU to boost data center projects in Egypt: The UAE’s Ministry of Investment and Egypt’s Ministry of Communications and Information Technology have signed an MOU to establish a framework for investments in digital infrastructure, centered on data center projects in Egypt, according to an Egyptian cabinet statement. The agreement looks to develop bilateral relations between public and private bodies, regulatory authorities, implement incentives, and streamline the development of data centers with a targeted capacity of 100 megawatts capacity in the first phase, ramping up to 1k megawatts in the future, the statement said.

OTHER STORIES WORTH KNOWING ABOUT THIS MORNING-

Malawi opens embassy in Rabat: Morocco's Foreign Minister Nasser Bouritaand Malawi’s top diplomat Nancy Tembo inaugurated Malawi’s embassy in Rabat, Morocco on Monday. (MAP)
Jordan + Egypt explore postal partnership: A delegation from Jordan Post visited Egypt on Sunday to explore boosting postal and e-commerce ties. (JNA)

Riyadh Air + Accenture unveil three-year partnership

AVIATION-

Riyadh Air + Accenture enter three-year strategic partnership: Riyadh Air has signed a strategic partnership agreement with Accenture to help the airline establish a cloud-only infrastructure, boost cybersecurity capabilities, and enhance operational services upon its upcoming launch, according to a statement. The partnership will help the company expand its operations to more than 100 destinations by 2030.

ALSO WORTH KNOWING-

ICTT purchases new cranes: The International Container Transhipment Terminal (ICTT) operated by DP World in Cochin, India has added two new STS Cranes to deliver “an enhanced level of service” to customers. (Statement, pdf)
Iraq launches e-reservation system: Iraq’s Transport Ministry has announced the launch of electronic reservation for internal and external flights. The service “will allow customers to easily make reservations by directly accessing the website, choosing the destination, and setting the appointment in a smooth manner,” said Minister of Transport Razzaq Muhaibis Al-Saadawi. (INA)
Etihad + China Eastern to enhance ties: The UAE’s Etihad Airways and China Eastern Airlines have signed an MoU to boost commercial and operational ties. The two companies will collaborate in codesharing, reciprocal loyalty programs, cargo transport, maintenance, repair, and overhaul, ground handling, catering, lounge access, staff training, and several sustainability initiatives. (Statement)
Hunnu flies to Dubai: Mongolian airline Hunnu Air has started direct weekly flights from Ulaanbaatar, Mongolia to Dubai, UAE. (Akipress)
GAFI partners with Banque du Caire: Egypt’s General Authority for Investment and Freezones (GAFI) inked an MOU with Banque du Caire to boost local and international investment. (Statement)

Calendar

ONGOING

2 October 2023-28 March 2024: Doha Expo 2023, Doha, Qatar.

DECEMBER

18-20 December (Monday-Wednesday): International Exhibition of Transportation, Logistics, and Related Industries (Iran Trans Expo 2023), Imam Khomeini Grand Prayer Campus (Mossala), Tehran, Iran.

19-20 December (Tuesday- Wednesday): The Saudi Airport Exhibition, Riyadh International Convention and Exhibition Centre.

19-20 December (Tuesday- Wednesday): The Digital Government Forum, The Ritz Carlton, Riyadh.

EVENTS WITH NO SET DATE

2H 2023:Construction of Neom’s first hydrogen fueling station will kick off.

2H 2023: Expansion of Baghdad International Airport to begin.

Before the end of the year: The first phase of the Ain Sokhna port redevelopment will wrap.

JANUARY 2024

9-11 January (Tuesday- Thursday): Dubai International Pharma and Technologies Conference and Exhibition, Dubai World Trade Centre, UAE.

12-14 (Friday-Sunday): 2024 5th International Conference on Supply Chain Management (ICSCM2024), Singapore.

23-25 January (Tuesday-Thursday): Transport Middle East 2024, Intercontinental Abu Dhabi, UAE.

FEBRUARY 2024

5-7 February (Monday-Wednesday): Middle East Bunkering Convention 2024, DoubleTree Hilton, Dubai, UAE.

6-7 February (Tuesday-Wednesday): The Middle East ProcureTech Summit (ME ProcureTech Summit, Dubai, UAE.

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

13 February (Tuesday): World Trade Organization Ministerial Conference, Abu Dhabi, UAE.

12-14 February (Monday-Wednesday): Sustainable Aviation Futures MENA, Address Hotel Dubai Mall, UAE.

12-15 February (Monday-Thursday): Future Warehouse & Logistics 2024, Dubai, UAE.

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

22-24 February (Thursday-Saturday): International Freight Forwarders Conference, Hyatt Regency, Dubai, UAE.

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

MARCH 2024

3-5 March (Sunday-Tuesday): Sustainable Green Blue Infrastructure Conference 2024 (Marlog), Green Plaza Mall, Egypt.

4-8 March (Monday-Friday): Logistics & Transport Management 2024, Dubai, UAE.

5-6 March (Tuesday-Wednesday): ShipTek International Conference & Awards 2024, The Address Dubai, UAE.

5-6 March (Tuesday-Wednesday): MRO Middle East, Dubai Trade Center, Dubai, UAE.

6 March (Wednesday):The Gulf Ship Finance Forum, Waldorf Astoria Dubai International Financial Centre, UAE.

7 March (Thursday): Truck and Fleet Conference 2024, Dubai, UAE.

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

20 March (Wednesday): Construction work scheduled to begin on the 162 km Rasht-Astara Railway in Iran.

APRIL 2024

27 April- 1 May (Saturday-Wednesday): Iran Expo 2024, Tehran International Permanent Fairground, Iran.

29 April- 2 May(Monday-Thursday): GLA Global Logistics Conference, Dubai, UAE.

30 April- 2 May(Tuesday-Thursday): Autonomous E-mobility Forum, Doha, Qatar.

MAY 2024

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

2-4 May(Thursday-Saturday): The International Conference on Logistics Operations Management: smart, sustainable and green logistics (GOL), Marrakesh, Morocco.

3-5 May (Friday-Sunday):2024 IEEE 15th international conference on Logistics and Supply Chain Management, University of Sousse, Tunisia, Tunis.

7-9 May (Tuesday-Thursday): Annual Investment Meeting (AIM) Congress, Abu Dhabi, UAE.

14-15 May (Tuesday-Wednesday): Seamless Middle East, Dubai World Trade Centre, UAE.

14-16 May (Tuesday-Thursday): Airport Show, DWTC, Dubai, UAE.

21-23 May (Tuesday-Thursday): WAGA 2024, Riyadh, Saudi Arabia.

JUNE 2024

2-4 June (Sunday-Tuesday):IATA Annual General Meeting (AGM) and World Air Transport Summit, Dubai, UAE.

19-21 June (Wednesday-Friday): World Freezones Organization’s Annual International Conference and Exhibition, Bari, Italy.

OCTOBER 2024

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

22-24 October (Tuesday-Thursday): Asean Ports and Logistics 2024, Johor, Malaysia.

NOVEMBER 2024

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

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

DECEMBER 2024

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

20 Decemeber (Wednesday): The 5th Iran-Senegal Joint Economic Cooperation Commission, Dakar.

EVENTS WITH NO SET DATE

1Q 2024: Construction of phase 3 of Agility’s logistic park in Abidjan, Côte d'Ivoire to be completed.

1Q 2024: Egypt’s Transport Ministry to launch pre-qualification tender for Cairo-Alex freight railway.

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

King Salman Energy Park is set to become operational.

2025

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.

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.

2027

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

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