OFFICIALS of the Jebel Ali Free Zone Authority (JAFZA) have urged more companies engaged in the supply-chain and logistics business to grow their operations further by utilising the free zone’s excellent facilities.

In a special networking session with members of the Supply Chain and Logistics Group (SCLG) and their guests on April 8, Ibrahim Al Janahi, chief commercial officer at JAFZA, described the logistics firms as key clients of the free zone.

“Let us not sit back and relax… the industry and the economic environment have changed so much in the last couple of years,” he said, stressing that while opportunities abound, there are also challenges that companies have to deal with.  

The infrastructure, facilities and services being offered at the free trade zone in Jebel Ali may help companies in the supply-chain and logistics industry to advance their growth, said Omar bin Hendi, vice-president for customer relations at JAFZA.

Spread over an area of over 49 square kilometres, JAFZA has a range of state-of-the-art facilities, including pre-built warehouses ready to be leased, office spaces in various sizes and plots of land for large-scale operations, such as manufacturing and extensive warehousing.

SCLG, a Dubai-based non-profit organisation dedicated to the development of the supply-chain and logistics industry, has been organising a series of forums to help its members develop their businesses and ride out the ongoing global financial crisis.

On May 6-7, the group will conduct its second annual Logistics and SCM (supply-chain management) Strategy Summit, along with a networking gala dinner, in Dubai to help promote the emirate as an international hub for the industry.

Industry professionals, such as David W Fairnie, director of security at DP World; Michael Proffitt, the well-known logistics veteran with 30 years of experience; Omar Hijazi, chief executive officer of Tejari and many senior managers in the Middle East will be sharing their views during the event.

ROLLS-Royce, a global power systems manufacturer, will power the aircraft of Saudi Arabian Airlines with Trent engines, which are eco-friendly, in a contract worth $900 million that includes a long-term service agreement.

Chosen by the airline for the first time, Trent engines will power up to 12 Airbus A330 aircraft, with deliveries from 2010, Rolls-Royce said, adding that Trent 700EP (enhanced performance) features reduced fuel-burn and emission levels.

“This important order marks another stage in the development of our relationship with Saudi Arabia,” said Phil Harris, senior vice-president for airlines at Rolls-Royce. “The superior technology in the Trent 700EP, backed up by a comprehensive service package, will deliver significant benefits for the Saudi Arabian Airlines.”

Rolls-Royce, which highlighted its broad manufacturing portfolio during a recent defence exhibition in the UAE, has secured over 70% of the A330 market over the last three years. In the Middle East, eight of the nine A330 operators have selected Trent 700 engines to power their fleets.

“This combination is particularly suitable for Middle East operations, where outstanding performance in hot and high altitudes/locations enables operators to fly further with more passengers,” Rolls-Royce said.

The company’s four major manufacturing and service businesses involving civil aerospace, defence aerospace, marine and energy play an important role in the development of the Middle East region. In 2008, services revenues in the region accounted for 52% of Rolls-Royce’s global revenues of $13.44 billion.

BUSINESS Systems Group (BSG), a regional competency centre for the Exactus supply-chain software solutions, has signed an exclusive agreement with Indian-based Trackon Telematics to distribute the latter’s products in the Middle East.

“With this alliance, our joint offering has the potential to revolutionise the transportation and fleet management business in the region,” said Vinod Kumar, managing director of Trackon. “Both our organisations are aligned towards facilitating operational excellence for our respective clients… “

Trackon is one of the leaders in fleet management solutions (FMS) for long- and short-haul cargo operators, school buses, retail management chains, crane and earth-moving machinery, construction equipment and refrigerated vans.

Mohideen Shaikh, development manager at BSG, described Tackon’s FMS as a cost-effective and secure solution to “almost all the problems and issues faced by fleet managers”. This is also integrated with Exactus’ aware transport management system, providing a more efficient execution of a transport lifecycle.

“BSG enters into alliances with market leaders that enable us to add value to our customers,” said Raheel Khan, BSG’s regional director. “By working with Trackon, we will be able to engage more effectively with customers requiring fleet management functionality.”

Pakistan keen on energy deals with UAE

A HIGH-LEVEL Pakistani delegation has met with officials of the Dubai Export Development Corporation (EDC) to facilitate increased bilateral trade, and to consider some deals with the UAE in the energy sector.

“The foreign direct investment in Pakistan from the UAE has grown, and we have many investments from the UAE, such as that of Al Falah Bank and Emaar Properties,” said Dr Mirza Ikhtiar Baig, chairman of the Pak-UAE Business Council.

Headed by Pakistani Ambassador to the UAE Khursheed Ahmed Junejo and Dr Saeed Khan Mohmand, Pakistan’s Consul General in Dubai, the delegation was here late last month to explore further trade opportunities between the two countries.

“EDC, as part of its mandate to promote exports from Dubai and the UAE, is keen to assist foreign delegations intending to source products from the UAE and attract more businesses to establish in Dubai,” said Engr Saed Al Awadi, chief executive officer of EDC.

He said UAE exports to Pakistan rose to $5.2 billion in 2008 from $3.4 billion the previous year, making the former as the latter’s second-largest trading partner after the US. Pakistan imports from the UAE mostly crude oil, chemicals, rubber, plastic, machinery, engineering items and pure gold. 

Baig said his country is keen to capitalise on the UAE as the Middle East’s business hub, as Pakistan exported $22 billion worth of goods to the UAE in 2008, with textiles accounting for $12 billion.

The Pakistani delegation included officials from 30 companies representing various sectors, such as agriculture, textile, real estate, oil and gas, manufacturing, information technology and publishing.

In a statement, EDC said the Pakistani-UAE bilateral trade touched $7 billion in the last fiscal year, ending June 30, with the balance of trade in favour of the UAE.

RSA Logistics starts operating at DLC

THE DUBAI-based RSA Logistics DWC has obtained a licence from the Dubai Logistics City (DLC) to start operating at the Dubai World Central (DWC) from March.

The first company to obtain the right to operate at DLC, a part of DWC, RSA Logistics has completed the construction of its 25,000-square-metre distribution centre in 12 months.

“The fact that the first company to commence operations at DLC is a home-grown logistics organisation speaks of Dubai’s initiative to take a lead in all business sectors,” said Rashed Bu Qara’a, chief operating officer at Dubai Aviation City Corporation, an aviation project within DWC.

He also described it as a “first step for DLC” to become a multi-modal logistics hub in the UAE and the entire Gulf region. “Our success is measured by the substantial number of international logistics companies that have signed up and are constructing their respective facilities at DLC,” he said.

The 21.5-square-kilometre (sq km) DLC is part of Dubai’s 2015 strategy to develop its transport and logistics services. It is within the DWC’s urban land development spread over 140 sq km.

Abu Dhabi welcomes nasair, Bahrain Air

TAKING advantage of the growing regional aviation sector, the Abu Dhabi International Airport has welcomed this month the daily flights from Jeddah by nasair, and on March 29 the first passenger plane from Bahrain Air.

“We are delighted that Bahrain Air has chosen Abu Dhabi, as the airline perfectly complements our current mix of services and destinations,” said Mohammed Al Bulooki, vice-president for airline marketing and aeronautical revenue at the Abu Dhabi Airports Company (ADAC).

Nasair used to operate three flights between its home base, Jeddah, and Abu Dhabi. Bahrain Air plans to double its daily flights from Abu Dhabi in the medium term from the present nine flights weekly.

Owned by the National Aviation Services, nasair operates one of the newest fleets within the Gulf region. It made its inaugural flight to Abu Dhabi in April 2008, making the UAE capital its first destination outside Saudi Arabia.

“Regional growth within the aviation sector is increasing, and we anticipate the traffic flow between Abu Dhabi, Jeddah and other Saud Arabian cities, such as Riyadh, to continue growing,” Al Bulooki said.

Bahrain Air currently flies to 16 destinations in the Middle East, North Africa and the Indian subcontinent.     

ADAC, which operates and manages the Abu Dhabi and Al Ain international airports, has the Midfield Terminal Complex for its centrepiece activity in a $6.8-billion investment programme in Abu Dhabi. Due for completion by 2012, the complex would increase annual capacity at the airport to 20-40 million customers.

THE TERMINAL 3 at the Abu Dhabi International Airport has been in full operation since early this month, following the transfer of flight from Terminal 1, said the Abu Dhabi Airports Company (ADAC).

The $271.8-million facility (Dh1bn) has expanded airport capacity to over 12 million passengers per annum, an increase of more than five million passengers yearly from April 7.

Covering a built-up area of 88,000 square metres, Terminal 3 has 10 departure gates equipped with the latest technology in airport operations and navigation systems. Its new duty-free facility hosts 19 high-end boutiques.

“It is very pleasing to have a home base that complements the impressive growth of Etihad Airways,” said Etihad’s chief executive, James Hogan.

Khalifa Mohamed Al Mazrouei, chairman of ADAC, said Terminal 3 will help Abu Dhabi’s growth in air transport and cargo handling. “The opening of the new terminal holds great significance not only for the airport and Etihad passengers, but also for Abu Dhabi as a world-class centre for investment, tourism and commerce,” he added.

A public joint-stock company owned by the Abu Dhabi government, ADAC was created in 2006 to operate and manage the Abu Dhabi and Al Ain international airports.

There is an ongoing re-development and expansion programme worth $6.8 billion at the Abu Dhabi International Airport which will increase capacity to 20-40 million passengers per annum.

WHILE DP World posted strong growth in 2008, prospects for 2009 are making it reconsider some major projects, including a new port development outside London.

UK-based Transport Intelligence (Ti) said it received comments from the Dubai-based DP World, suggesting that it might slow the rollout of full capacity at its ‘London Gateway’ project in southeast England which is set to open by end-2010.

The world’s fourth-largest marine terminal operator, DP World is committed to big terminal developments in Vietnam, Djibouti and Peru.

Last year, container traffic throughput at many of the company’s big terminals worldwide was buoyant, achieving an overall 15% increase in annual volume to 27.7 million 20-foot equivalent units (TEUs). This meant a 22% rise to $1.3 billion of earnings before interest, tax, depreciation and amortisation.

Its home ports in Dubai posted an 11% growth in container volume, with a traffic figure of 12 million TEUs throughout the year. The global economic crisis, however, affected DP World’s European, Australian and American ports.

Its Asian terminals continued to grow in double figures, owing to the company’s better exposure to the east-west trades around Southeast Asia and the Indian subcontinent.

Ti said “it is likely” that DP World’s profits have not yet fully reflected the “downturn in worldwide container trades”. It based this comment on an earlier statement by Sultan Ahmed bin Sulayem, chairman of DP World.

“Falling utilisation rates across container terminals globally mean the demand for new capacity in the short term is much diminished,” Sulayem said. “Taking into account our existing pipeline of committed capacity, the company has decided to defer much of our planned new capacity until such time as higher utilisation rates return.”

THE ONGOING investments being made by global integrators in emerging markets, particularly China, is a wise move despite the global economic slowdown, hinted industry experts and the World Bank, noting China’s multibillion-dollar stimulus.

“A return to stronger economic expansion in China next year should help support growth among the countries of the East Asia and Pacific region,” said the World Bank in its East Asia Update report released early this month.

DHL is expanding its operations and services in China, which currently offers the biggest opportunities for foreign players. Its recent joint venture, DHL-Sinotrans, has been linked with APEX, a domestic express delivery firm.

Another global courier firm, TNT, has also announced its first Chinese domestic road distribution service using the road network of TNT-Hoau, its wholly-owned Chinese subsidiary, while Federal Express (FedEx) launched its new regional hub in Guangzhou.

With an investment of $150 million, this new facility in the southern Chinese province of Gaungdong is FedEx’s nerve centre in the Asia-Pacific region. In December, UPS opened its new international hub at Pudong International Airport, in Shanghai.

The World Bank said that gross domestic product in developing East Asia will climb 3.5% this year. This is lower than the bank’s estimate of 6.7% growth rate made in December, however, and way below last year’s eight per cent.

There has been a drop in domestic demand and exports since last year, owing to the global financial meltdown.

The global express industry used to focus on international, rather than domestic services, in China, which announced in November a stimulus worth $587 billion to fire up personal consumption and spending on services.

China’s economy will grow further, owing to government investments and the small exposures of banks to losses on the US subprime mortgage crisis, according to the World Bank’s twice-yearly Update report on the region.

Vikram Nehru, the World Bank’s chief economist for East Asia, told journalists in Tokyo early this month that economic recovery in China would be reflected in the rising prices of commodities which had experienced stabilised levels.

The Chinese economy will expand 6.5% this year, although lower than the previous forecast of 7.5% growth and last year’s nine per cent. Over the past four months, economies in the region were in a bad shape, shadowing declines in advanced economies.

The manufacturing industry in China also improved for the three months to February, according to a survey on the economic health of the sector, as factories restocked, believing that the economy would ride out the credit crisis soon.

“China’s economy is possibly on the road to a sustainable recovery,” stressed Zhang Liqun, a government economist, speaking to Reuters. Commenting further on the survey, he said: “Policies are beginning to show their effectiveness, supporting quite fast economic growth.”  

EIGHT company members of the Supply Chain and Logistics Group (SCLG) bagged the Mohammed bin Rashid Al Maktoum (MRM) Business Award for various categories, in recognition of their contribution in the UAE’s economic development.

Three of the eight SCLG-member awardees won under the ‘Supply Chain & Logistics’ category, a newly-introduced class in the four-year-old MRM Award, which honoured a total of 16 companies, two of which clinched two awards each.

Dubai Ports World, Al Islami Foods and Federal Express (FedEx) International (Dubai branch) were cited for business excellence and their role in economic building, said the Dubai Chamber of Commerce and Industry, the award-giving body.

“Moreover, the [MRM] Award enables the participating firms to get detailed evaluation and confidential feedback reports on a company’s business performance and areas of strength and development… ” said Abdul Rahman Saif Al Ghurair, chairman of Dubai Chamber.

Besides the logistics category, the MRM Award also introduced the ‘Corporate Social Responsibility’, or CSR, category, which also plays an important role in economic growth. These brought to seven the MRM Award categories, the five of which are ‘Manufacturing’, ‘Finance’, ‘Re-Export’, ‘Construction’ and ‘Real Estate’.

The five other SCLG company members that won the MRM Award are ETA Star Property Developer, which is backed by the ETA-Ascon Group, under the Real-Estate category; Dubai Aluminium Company and Al Khaleej Sugar (Manufacturing); Landmark Group (Re-Export) and Unilever Gulf, which won the “final award” dubbed ‘UAE Free Zones Manufacturing’, the category for companies operating in the free trade zones.

Dubai Cable Company, which won under the Manufacturing category, has officials who are individual members of SCLG, a Dubai-based non-profit organisation dedicated to the development of the supply-chain and logistics industry.

FedEx also won in the CSR category, sharing the award with SS Lootah Contracting Company, Dubai Chamber said in a statement on April 7, the same day the awards were given in a ceremony at Madinat Jumeirah. SS Lootah won another MRM Award for the Construction category.

His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, presented the awards to 16 companies during the fourth-round of the MRM Business Award.

Dubai Chamber, which created the MRM Award in 2005, said the winners were honoured for their “outstanding entrepreneurship… and unflinching contribution to the economic development of the UAE, the overall business atmosphere and the society at large”.

Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai; Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, Deputy Ruler of Dubai; a number of dignitaries, business councils and other guests also attended the awarding ceremony.

LOGWIN, a provider of international logistics services based in Luxembourg, has joined forces with Finnish partner and forwarding agent, Wikestrom & Krogius, to create and operate a supply-chain centre for Wartsila Corporation in Shanghai.

The deal involves a five-year contract for the partners to provide logistical and operational services for Wartsila. These include the management, transportation and distribution of 70,000 tonnes of power-related cargo from Shanghai to Europe.

“Logwin’s partnership’s responsibilities will also comprise the provision of specialised logistical services that entail the management of the 1,868-square-metre [sq m] cross docking area where goods are recovered, opened, sorted, tallied and repacked,” said Logwin, which published the details of the agreement.

Logwin had assisted the Helsinki-based Wartsila in the development of a 3,100-sq-m facility offering comprehensive logistics services, such as quality inspections, local warehousing, packaging, shipment consolidations and distribution capabilities.

“[T]he new centre will enable Wartsila to consolidate goods from multiple suppliers in China, including quality control and inspection of goods on their arrival at the centre… “Logwin said.

It added that the centre also repackages the cargoes from China into full container loads for shipment to Finland, Italy and other European destinations.

The facility has a 1,868-sq-m docking area, a 766-sq-m quality-control inspection workshop and a 466-sq-m purpose-built office.