The case for reglobalization

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What we're tracking today

TODAY: Israeli attacks put Aleppo Airport out of service again + Ukraine’s grain exports see progress via humanitarian corridor

Good morning, lovely people. We have another tight issue for you this morning — and the dominant theme is that M&A and investment activity is brewing in the logistics sector in the region.

THE BIG LOGISTICS STORY- Bahrain-based GFH Financial Group is acquiring Saudi food and services and logistics business Gulf Central Company, which has an enterprise value of SAR 500 mn. Over in Saudi Arabia, Neom’s investment fund is investing USD 100 mn in autonomous vehicle company Pony.ai.

^^ We have everything on this story and more in the news well, below.

Israel launched attacks on Syria’s Aleppo airport yesterday for the fourth time in the two weeks since the Israel-Hamas war started, putting it once again out of service, Agence France-Presse (AFP) reports. Syrian Transport Ministry Official Suleiman Khalil said the attacks targeted a runway that had been hit before, putting the resumption of services on hold once again.

Ukraine has exported 700k tonnes of grain through its Black Sea “humanitarian corridor” since it started operating in August, Reuters quotes Ukrainian agricultural minister as saying. “During the operation of the new corridor, 38 ships entered the ports and more than 30 left, not all of them with grain, of course,” Minister Mykola Solsky said. Some 6 mn tonnes per month need to be exported to preserve agriculture as a key sector of Ukraine’s economy, and that volume can only be ensured by resuming full operations at deepwater ports in Odessa, Solsky added. Agricultural producers say some 2.5 mn tonnes of food can be exported through the corridor each month, which would almost offset the impact of Russia’s decision to quit the Black Sea grain agreement.

Background: The temporary “ humanitarian corridor ” introduced by Ukraine for ships stuck in Black Sea ports reroutes exports via the western Black Sea coast near Romania and Bulgaria to avoid attacks on river ports.

Iraqi Kurdistan’s oil production is set to resume within a month, pending agreements:Foreign oil companies in the Kurdish region of Iraq informed the government that they will begin operating within a month if an agreement is reached on oil production costs and contracts, Reuters reports, citing Iraq’s Prime Minister Mohamed Shia Al-Sudani. Turkey halted flows through Iraq’s northern oil export route following an arbitration ruling in March where Ankara was ordered to pay damages for receiving oil from Iraqi Kurdistan without Baghdad’s approval. Turkey’s energy minister said that the pipeline was prepared for shipments to resume earlier this month, but two Iraqi officials were cited as saying that they have yet to receive the official notification as to whether the pipeline is ready. Disputes persist over production cost and contracts, Sudani indicated.

CIRCLE YOUR CALENDAR-

SCZone is in China: A delegation from Egypt’s Suez Canal Economic Zone (SCZone), led by Chairman Walid Gamal El-Din, is on tour in China in the provinces of Suzhou and Hefei, after visiting Hangzhou to drum up investments from Chinese companies into Egypt’s textile and garment industry and establish projects in the West Qantara Industrial Zone.

TheParcel + Post Expo 2023 kicked off earlier this week and runs through today in RAI Amsterdam, Netherlands. The event brings together industry experts to network, showcase technologies, with a live conference featuring expert industry analysis and opinion.

TheG7 Trade Ministers meeting will take place at the Osaka International Convention Center in Sakai, Osaka, Japan between 28 and 29 October. The event will bring together trade ministers from Canada, France, Germany, Italy, United States, United Kingdom, Germany and the European Union to discuss the changing environment surrounding trade, and growth of the global economy.

AD Ports is set to host the International Association of Ports and Harbors (IAPH) World’sPorts Conference-Abu Dhabi 2023, from 31 October to 2 November, at the Abu Dhabi National Exhibition Center, under the theme ‘Reinventing Ports’. The event will bring together more than 100 speakers, from port operators to influential figures in the industry, to network and share expertise on the industry.

Dubai Business Forum is set to take place on 1-2 November at Madinat Jumeirah, in Dubai. The event will bring together top business leaders to boost business partnerships and networking.

TheDubai Precious Metals Conference 2023 is taking place on 20-21 November 2023 at the ballroom at the SO/ Uptown Dubai in the UAE. The event will bring together industry experts, innovators, and leaders to discuss emerging trends, technologies, and strategies driving the metals industry.

Etihad Cargo will host the third iteration of ACE in Abu Dhabi between 4 and 6 December. The conference brings together air cargo industry executives with expert speaker debates, workshops, and networking via a one-to-one meeting scheduler and in-person meetings. The event will focus on the air cargo sector in the Middle East.

TheEurasian Economic Union (EAEU) exhibition is taking place from 4 to 7 December at Tehran Permanent International Fairgrounds in Tehran, Iran. The exhibition will be attended by EAEU members, members of the Shanghai Cooperation Organization, and the Persian Gulf Cooperation Council, and will bring together domestic and foreign companies in the industrial, mineral, and agricultural fields to showcase their latest products at the event. Seminars and conferences on transport, trade, and tourism will take place on the sidelines of the event.

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

Bahrain’s GFH to acquire Saudi food and logistics services company

Bahrain-based GFH Financial Group is acquiring Saudi food and services and logistics business GulfCentral Company, which has an enterprise value of SAR 500 mn, according to a press release (pdf). Enterprise Logistics reached out to a representative for more details about the transaction but did not receive a response ahead of dispatch time.

What’s next? GFH says it looks forward to working with the acquired company to grow its business, expand its portfolio, expand geographically, and enhance its warehousing and logistical capacity, GFH CIO of Private Equity Hammad Younas said. Gulf Central will leverage GFH’s technology and international network to invite its foreign suppliers to set up facilities in KSA and expand its existing customer base, Gulf Central CEO Shafqat Khan said.

About Gulf Central: The firm has a diverse base of 1k blue-chip customers including players in hotels, restaurants, catering, retail brands, and warehousing and supply chain operations, according to the press release. It also has relationships with some 200 international aggregators and producers.

About GFH: GFH’s businesses include investment management, commercial banking, and treasury and proprietary investments. It operates across the GCC, North Africa, India, the US, Europe, and the UK, according to the release. The acquisition is in line with GFH’s strategy to invest in priority sectors aligned with Saudi Vision 2030, GFH CEO Razi Al Merbati said in the release.

Neom’s investment fund invests USD 100 mn in Pony.ai to expand autonomous vehicles in MENA

Neom invests in automotive vehicle company: Saudi megaproject Neom’s investment arm, Neom Investment Fund (NIF), is investing USD 100 mn in autonomous driving company Pony.ai to introduce autonomous vehicles in Neom and key markets in the Middle East, according to a press release (pdf). NIF will also form a joint venture with Pony.ai to develop, manufacture and deliver autonomous vehicles, an autonomous driving service, and smart vehicle infrastructure throughout the MENA region.

The details: The joint venture will establish R&D and manufacturing headquarters across the region, according to the press release.

What they said: “The investment in Pony.ai is an essential part of our ambitious plans to build a smart, zero-emission, autonomous multi-modal transport system, connecting people and communities across Neom, while incubating new technologies for the benefit of the world,” Neom’s Executive Director of Land Mobility Terry Wong said.

Background: Neom previously announced rolling out automated logistics solutions at its multiple sites. These will include the world’s first fully automated seaport, autonomous ground and air shuttles and a carless city. It also recently invested USD 175 mn in a joint venture with eVTOL company Volocopter that will see them both work together on “fleets, operations and infrastructure to localize industry innovation.”

About Ponyai: Founded in 2016, Pony.ai is headquartered in Silicon Valley and focuses on autonomous mobility. The company’s products include a robotaxi, robotruck and personally owned vehicles.

GWC’s net income saw 12.7% y-o-y decrease in 3Q 2023

Qatari logistics giant Gulf Warehousing Company’s(GWC) bottomline recorded an 12.7% y-o-y drop to QAR 53.8 mn in 3Q 2023, according to a financial statement (pdf). Revenues also decreased 11.7% y-o-y to QAR 349.56 mn during the same period.

On a 9M basis: The company’s net income dropped 5.5% y-o-y to QAR 171.42 mn in 9M 2023. Meanwhile, revenues inched up 2.32% y-o-y to QAR 1.14 bn.

What they said: “This year, GWC Group embarked on an ambitious journey, exploring new markets, and diversifying its services. These strategic moves are reinforcing Qatar’s position as a regional and global logistics and reexport hub, setting the stage for continued growth and innovation,” GWC Chairman Sheikh Abdullah Bin Fahad Bin Jassim Bin Jaber Al Thani, Chairman of GWC Group stated.

Reglobalization is the future of trade, according to WTO

The case for reglobalization, according to the WTO: In the face of challenges such as environmental strains, increased inequality, and geopolitical tensions, counter-pressures to reverse globalization, unwind interdependence and return to a more divided world of regional blocs are rising, a recent World Trade Organization (WTO) World Trade Report 2023 (pdf) explains. The case for globalization has weakened as supply chain issues, marginalization and environmental challenges took precedence over the past few years, the WTO argues, while warning that reversing globalization could have dangerous repercussions. Reglobalization — or what the WTO describes as a more “inclusive” and broader integration of global economies — could be the solution, the WTO argues.

Why are countries shifting away from globalization? Globalization has left economies vulnerable to excessive risks, such as unreliable foreign suppliers, especially amid crises like the Russia-Ukraine war and covid-19, the report writes. Complex supply chains can leave countries less self-sufficient and prone to turbulent and external shocks, as recent crises have shown. This narrative is thus setting the stage for the increased localization of supply chains, with reshoring, nearshoring, friendshoring, and decoupling of supply chains emerging. The biggest example of that trend is China and the US, who are already showing signs of decoupling and tense trade relations.

Globalization is high risk, high reward: While the report admits globalization has helped lift mns out of poverty and created more integration and interdependence of global economies, global crises — like financial crisis, covid-19 and the Russia-Ukraine war over the past few years — can turn these rewards to challenges very quickly, it argues.

But it’s also credited for the growth of the global economy + the integration of developing countries in the global economy: The world’s economy grew 14x over the past 70 years, while world trade expanded 45x, on the back of the rise of globalization, the report says. Developing economies’ share in global trade has also grown from a third to almost half since the 1980s, with their share of global output rising from 24% to 43%.

Which means the risks of deglobalization could be even more dire than those of globalization: Deglobalization would hamper innovation, competition, and efficiency, by forcing countries to excel at more industries rather than specializing in specific industries that they excel at, the report argues. The WTO estimates that the cost of fragmenting the world into trade blocs would be 5% of real income at the global level, while developing economies could face double-digit losses.

Fragmentation is not going to solve our problems: The unwinding of globalization can lead to disruptions in the labor market, where workers may have to adapt to new jobs or find new jobs, eventually leading to reduced incomes and increased poverty, the report writes. Fragmentation can also lead to uncoordinated environmental policies, which could impede our global transition to sustainability, it adds.

The answer? According to WTO, more globalization: Integrating more people and economies into the global trade system and strengthening multilateral cooperation will make our economies more secure, inclusive and sustainable, the report argues.

While security concerns are here to stay, reglobalization can promote security by expanding the multilateral trading system to new actors and areas that facilitate “flexicurity,” which the report defines as supply chain diversification during crises. Cooperation on trade restrictions during crises can also mitigate their impact. Instead of turning to unilateral policies. The WTO can also leverage its position to reduce overlap between security and trade, by developing agreements and enabling least-developed members to overcome their trade barriers, the report writes.

It also poses benefits on the environmental front…: Reglobalization can pave the way for a green transition by advancing services trade and enabling a wider application of digital technologies, the report says. With the widespread digital provision of some services, a large share of trade would be less carbon intensive, by allowing trade to take place without cross-border movement. Digital solutions in energy, manufacturing, agriculture and land use, buildings, services, transportation and traffic management could reduce global carbon emissions by some 15%, according to the report. Digital high-speed connectivity can also improve sustainable transport by enhancing optimized transportation by enabling real-time data collection and analysis —which can lead to reduced congestion and efficient route planning which can lower emissions, the report writes.

…especially in the Middle East: With the Middle East posing big prospects for the development of renewable energies, trade and the transfer of technology is necessary to ensure these prospects are fulfilled, the report explains.

Dubai Silicon Oasis snags four awards

Dubai Integrated Economic Zones Authority member Dubai Silicon Oasis has received four accolades from fDi Magazine Global Freezones of the Year Awards, according to fDI Intelligence. The awards they snagged include global freezone of the year for SMEs, the Middle East freezone of the year for SMEs, fifth in the top 10 global freezones of the year 2023, and an honorable mention for catalyzing R&D.

UAE, Scotland agree to boost trade ties + Iraq meets with regional transport ministers to boost cooperation. PLUS: More news from Qatar

UAE + Scotland to deepen bilateral trade:Emirati Foreign Trade Minister Thani Al Zeyoudi inked an MoU with Scotland’s Cabinet Secretary for Wellbeing Economy, Fair Work and Energy Neil Grey to boost bilateral trade, private sector and academic partnerships in the fields of advance technology, innovation, education, and research, according to a press release (pdf). The countries look to exchange insights, expertise, and experiences and establish joint public, private, and academic initiatives, to contribute to economic diversification, according to the release.

Iraq looking to enhance transport cooperation with fellow Arab countries: Iraqi Transport Minister Razzaq Al Saadawi met with several counterparts from the region at a meeting of the Council of Arab Transport Ministers to discuss boosting transport ties, according to a s tatement. Al Saadawi discussed projects in air, sea, and land transport with his counterparts and other high-level officials, the statement said.

Qatar + Korea eye stronger trade ties: Qatari Emir Sheikh Tamim bin Hamad Al Thani agreed with South Korean President Yoon Suk Yeol to enhance their relations to a “comprehensive strategic partnership” during a summit in Doha, Yonhap News Agency reports. The pair inked five MoUs to strengthen cooperation in several areas including trade and investment promotion.

ALSO WORTH KNOWING-

A Qatari Transport Ministry delegation met with a delegation from Uzbekistan’s Transport Ministry to discuss boosting transport and railroads cooperation between both countries. (Statement)

Almajdouie adopts IRU program for skillin and developing operations + more from Tunisia, the UAE, and EgyptAir

Saudi logistics firm Almajdouie has collaborated with the International Road Transport Union (IRTU) to improve operations and drivers’ skills after signing an agreement in Riyadh,according to an IRU press release.The agreement pertains to the use of IRU’s goods transportation certification programme, RoadMasters. Almajdouie has become the first logistics service provider in KSA to adopt IRU’s RoadMasters program, with the target of improving driver safety and fostering higher customer satisfaction.

ALSO WORTH KNOWING-

Tunisia secured a position as an official member of the Executive Office of the Council of Arab Transport Ministers on 24 October. It will hold this role until October 2025. (Statement)
The UAE’s Ports, Customs, and Free Zone Corporation (PCFC) and Microsoft have signed an MoU to explore collaboration in the areas of skilling in infrastructure, data an AI for its employees. (Press release)
International polyurethane solutions provider Pearl Polyurethane Systems has become one of the first organizations in the UAE to utilize Etihad Rail’s National Rail Network to transport products from the UAE to KSA in partnership with DHL Global Forwarding. (Press release)
EgyptAir is expanding its Asia-Pacific network starting 16 November with addition of a fourth route toChina. The flight will operate three times a week between Cairo International Airport (CAI) and Shanghai Pudong International Airport (PVG). (Simple Flying)

Calendar

OCTOBER

Egypt’s Suez Canal Economic Zone (SCZone) goes on a roadshow to South Korea.

24-26 October ( Tuesday-Thursday): Parcel + Post Expo 2023, RAI Amsterdam, Netherlands.

26-29 October (Thursday-Sunday): ICASM 2023, Conrad, Etihad Towers, Abu Dhabi, UAE.

28-29 October (Saturday-Sunday): G7 Trade Ministers Meeting, Osaka International Convention Center, Sakai, Osaka, Japan.

30 Oct-2 Nov (Monday-Thursday): XLP AGM 2023, Barcelona, Spain.

30-31 October (Monday-Tuesday): Gartner Supply Chain Planning Summit, London, UK.

31 Oct-2 Nov (Tuesday-Thursday): IAPH World Ports Conference, Abu Dhabi, UAE.

September-November: Emirates Postal Group’s “Logistics Unleashed” competition, UAE.

NOVEMBER

November: Abu Dhabi Airports Terminal A set to become operational.

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

1-2 November (Wednesday-Thursday): Dubai Business Forum, Madinat Jumeirah, Dubai, UAE.

11-13 November (Saturday-Monday): GCC-Türkiye Economic Forum, Çırağan Palace Kempinski Hotel, Istanbul, Turkey.

9-15 November (Thursday-Wednesday): Intra-African Trade Fair, Cairo, Egypt.

15-17 November (Wednesday-Friday): Global Freight Summit 2023, Coca Cola Arena, Dubai, UAE.

13-17 November (Monday-Friday): Dubai Airshow, Dubai World Center, UAE.

17-18 November (Friday-Saturday): 17th Iran-Turkmenistan Joint Economic Commission, Ashgabat, Turkmenistan.

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

14-17 November (Tuesday-Friday): IATA Slot Conference, Dubai World Trade Centre, Dubai, UAE.

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

20-21 November(Monday-Tuesday): Dubai Precious Metals Conference, SO/ Uptown, Dubai, UAE.

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

21-23 November (Tuesday-Thursday): Touchdown Middle East, Gulf Hotel, Bahrain.

21-23 November (Tuesday-Thursday): ARABAL 2023 Conference, Hilton Riyadh Hotel & Residences, Riyadh, Saudi Arabia.

23 November (Thursday): Global Supply Chain and Logistics Summit, Grand Millennium Hotel Business Bay, Dubai, UAE.

30 November-3 December (Saturday-Tuesday): Handling Expo, Egypt International Exhibition Center, Cairo, Egypt.

September-November: Emirates Postal Group’s “Logistics Unleashed” competition, UAE.

DECEMBER

4-6 December (Monday-Wednesday): ACE 23 Air Cargo Conference, Yas Island Hotel, Abu Dhabi, UAE

4-7 December (Monday-Thursday): Eurasian Economic Union (EAEU) exhibition, Tehran Permanent International Fairgrounds, Tehran, Iran.

10-11 December (Sunday-Monday): Invest in Logistics, St.Regis Almasa Hotel, New Administrative Capital, Egypt.

12-14 December (Tuesday-Thursday):Food Africa Cairo 2023, Egypt International Exhibition Center, Cairo, Egypt.

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.

3Q 2023: Design and supervision contract for Oman’s proposed Musandam Airport to be awarded.

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

2024

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 in 2024

FEBRUARY 2024

13th World Trade Organization Ministerial Conference, Abu Dhabi, UAE.

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

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

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

MARCH 2024

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

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.

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

JUNE 2024

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.

NOVEMBER 2024

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

DECEMBER 2024

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

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.

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

2027

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

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