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MARKETS: SHIPPING SHARES TO DROP ON LOW DEMAND AND NEW SHIPS
THE
supply chain
and logistics
Projects in GCC’s marine, F&B,
agri and mining sectors offer
good returns
Vol i, no 2 | March 2009
www.sclgme.org
The Gulf’s
credit quality drops as
SWFs shun bailouts
Low demand for exports,
lower oil prices are putting
MENA to the test
Growth engine
The Dubai government creates forums with the
private sector to develop the logistics industry
The official publicaTion of The Supply chain and logiSTicS group

The Image
Shoulder-to-shoulder
THE GOVERNMENT’S
call for greater participation in economic
building by the private sector in the
logistics industry is, indeed, a welcome
gesture. Despite the many challenges facing
the industry, such as the credit crunch
and the piracy off the coast of Somalia,
global trade – 90% of which is moved at
sea – still has to transport goods, especially
perishable supplies. Moreover, food is the
last item that consumers would scrimp on
or jot down last in their shopping list.
It’s about time the private and the public
sectors strengthened their co-operation
on how to help the supply-chain and
logistics industry help the economy grow
further. Already, the Dubai Department
of Economic Development has initiated
a series of forums to serve as a platform
for both parties to identify and find
solutions to the various challenges facing
the industry. This is a great step forward
which should be replicated in other related
industries, especially the financial and
banking sector.
For as long as the government, financial
institutions, entrepreneurs and other
traders co-operate to move things forward,
the economic recovery won’t look so far
down the road.
March 2009 The supply chain and logistics link 3

ADVERTORIAL
Al Ghurair Foods: Nourishing people
Al Ghurair Foods (AGF), a part of Al Ghurair Investments, has made
tremendous progress over the years – growing from a small flour mill in
1976 to a technologically advanced, world-scale, multi-product manufacturing
enterprise. With a turnover of over $1 billion and having plants operating
in the UAE and five overseas locations and a market presence in over 50
countries, AGF is one of the largest food manufacturing and marketing
businesses in the Gulf region.
AGF has a large customer base extending across the four continents. These
customers are served by professionals working across various businesses
and countries. Among the different product lines, the flour business is the
flagship of AGF, with other integrated businesses that add synergy from an
organisational as well as the customer usage perspective. The milling of flour
is done in six flour mills, two of which are in Dubai and the others are in
Algeria, Sudan, Lebanon and Sri Lanka. These mills have a combined daily
wheat milling capacity of over 5,500 metric tonnes (mt). Besides the flour
used for normal baking, the mill at Jebel Ali also produces specialty mixes,
giving it a unique versatility.
Edible Oils Refinery is a state-of-the-art refinery strategically located at the
Jebel Ali Port. It has a refining capacity of 90,000 mt.
Dubai Oil Mills is one of the largest and most modern oilseeds processing
units in the Middle East, equipped with a capacity to crush 4,000 mt of
soybeans or 2,800 mt of canola seeds daily. The plant was established
with an investment of Dh250 million, using state-of-the-art technology
to supply quality edible oil and meals. The importance of the project to
the UAE economy can be gauged from the fact that the foundation-stone
of the project was laid by His Highness Sheikh Mohammad bin Rashid Al
Maktoum, Vice- President and Prime Minister of UAE and the Ruler of Dubai,
in 2001. The plant uses only the finest quality Soybeans and Canola seeds
imported from the US, Australia, Canada, Argentina, Brazil and Paraguay,
among other countries, providing the customers Oils and other products of
uncompromised quality. With a customer base spread as far as Vietnam and
Australia in the East and France in the West, the plant, within one year of its
commissioning, was able to reach full capacity utilisation. Keeping in view the
future business potential, the company is already implementing an expansion
plan for enhancing its capacity. Dubai Oil Mills, like all other manufacturing
facilities of AGF, conforms to high standards of quality systems and has been
certified as an ISO 9001:2000, ISO 14001:2004 and HACCP compliant
company.
JAFZA also recognised the efforts put in by the company by awarding it the
environmental systems enhancement trophy for 2006.
In 2005, the Australian Quarantine and Inspection Service (AQIS) certified
the plant as a quality supplier after a detailed audit of its systems by their
assessors. DOM enjoys the pride of being adjudged a better plant in terms
of product quality and yield by the officials of the world’s industrial leader,
‘Bunge’, which coincidentally happens to be our benchmark company for
product quality.
Gulf Legumes Company is the only technologically advanced lentils splitting
and cleaning plant in the GCC. It has an annual capacity of over 50,000 mt,
making it one of the largest pulses plants in the world. The Al Jabal Poultry
Farm is also one of the largest poultry farms in the UAE, known for its
consistent quality and produces over 50 million fresh and high quality eggs
per year.
National Maize Mills has an annual capacity of 90,000 mt, making it one of
the largest corn mills in the region. This technologically advanced unit has the
ability to mill various types of corn and deliver different sizes of corn grits
used by the snack foods industry.
Reem Rice Mills, in Pakistan, which is strategically located in the best paddy
growing area in the heart of Punjab, is the source for long grain basmati rice
marketed by AGF.
Gulf Feed Mill (GFM) was established for the purpose of developing and
producing high-quality animal feed. It manufactures a wide product range
covering chicken feeds, livestock feeds, mono-gastric feeds and premixes.
The Trading and Procurement Department of AGF is involved in the trading
of grains, oilseeds, meals and crude edible oils. More than three million
metric tonnes of cargo is handled every year which amounts to 75,000 40-
foot containers a year or over 200 containers a day. To back up its trading
and procurement business, and bring added flexibility to its operations, AGF
has installed silos with grain storage capacity of over 360,000 tonnes.
JENAN
Made in the UAE, Jenan is the umbrella brand of AGF that offers the best
natural nourishment available from any processed food. Jenan offers an
extensive range that includes flour, rice, edible oils, maize grits, pulses, eggs,
pasta and noodles. It has maintained the highest standards in terms of flavour,
purity, texture and nutrient content, thus winning the trust of its consumers.
With the current offering of 45 product variants across different categories,
AGF intends to diversify into newer consumer food categories, in line with
its strategic plans to maintain and consolidate its market leadership position.
(For DQA Group)
A Certified Company for
- QMS ISO 9001:2000
- EMS ISO 14001:2004
- F.S.M.S. HACCP
Essa Al Ghurair Chairman
Razi Ansari CEO
P.O. Box 780, Dubai, UAE, Tel: +971-4-3939633, Fax: +971-4-3939191
Website: www.alghurairfoods.com

Contents
38
Vol I, No 2 | march 2009
03 The Image
Shoulder-to-shoulder
34 30
06 the newsroom
08 Notes & Quotes
Buy the Book: This way to the logistics
sector
Quotes: On the strength of Dubai’s
economy, earnings expectations
of airlines worldwide, trade links
between the UAE and Turkey and the
differentiation of credit risk
10 Inside SCLG
Moving the logistics industry forward
Simplified operations to help firms cope
with credit crisis
SCLG membership
SCLG’s new members
16 News & Views
On Dubai’s Q4 exports surging 62%,
DED’s forums with the logistics industry,
offshore projects giving rise to demand
for workboats, Air Arabia facing serious
challenges, crisis management in the
aviation sector and Abu Dhabi’s mass
transport plan
22 ROUNDUP
ADIA cargo tonnage rises two per cent
in January, Fujairah Free Zone on an
expansion drive, Ehrhardt+Partner’s
processes guaranteed by digital video
documentation, Agility acquires Finnish
logistics provider and Aramex posts 21%
rise in Q4 net income
23 OVERSEAS
• On US warships and Somali pirates;
the EC working on a barrier-free maritime
transport area; UK ports letting out
moorings for unused vessels; oil
companies still using supertankers to
store unsold crude oil and Qantas Freight
offering direct weekly service between
the US and New Zealand
• US retail container traffic to drop 12%
in H1
• Few firms manage their supply-chain
carbon footprints
26 The Industry
Strongest, weakest logistics markets
Points of delivery
Paving the way for shippers, service
providers
30 Fund Folio
Debt challenge: The Gulf’s credit quality
declines as the world’s state-owned
investment funds shun bailouts of
distressed companies
34 Focus
Taking stock of asset-light strategy: Trading
in shipping shares appears bleak on
slowing demand for cargo and the influx of
new ships
38 COVER STORY
Growth engine: Dubai begins closer
interactions with the private sector for the
further development of the logistics industry
44 The Gulf
Investment areas: Projects in GCC’s marine,
food and beverage, agriculture and mining
offer good returns
48 MENA Region
Dealing with risks: Falling demand for
exports and lower oil prices are testing the
resilience of MENA countries
52 Calendar
• Seatrade organising workboats
conference
• E+P offers workshops on warehouse
logistics
54 Opinion
Re-branding in the time of financial crisis
56 Faces & Phases
GAC expanding, consolidating in Western
Europe
irish organisation names Etihad best
business class airline
bifa bestows ‘Environment Award’ to
Aramex
Faulds, Amornpatsophon given new GAC
positions
Etihad names Iran country manager,
reshuffles RGMs
Emerson sees increased revenue on new
regional HQ in Dubai
Deutsche Bank grants Al Khalifa, Hassan
new positions
GAC launches internal environmental
award
62 Side View
Flying High
March 2009 The supply chain and logistics link 5

The Newsroom
The official publicaTion of
The Supply chain and logiSTicS group
Publisher
dominic de Sousa
ISSUES affecting the logistics industry make up most of The Link’s
coverage for this month. “The Image” and the “Cover Story” sections
tackle efforts by the Dubai government for closer interactions with
industry leaders to develop their businesses further. “DED [Dubai
Department of Economic Development] continues to focus on
developing the emirate’s most dynamic economic sectors that have
been the key contributors to Dubai’s growth,” says Khalid Al Kassim,
deputy director-general for Planning and Development at DED. “The
logistics sector is a key component in our growth model.”
“The Industry” section opens on pages 26 and 27 with a story on
the world’s strongest and weakest logistics markets. The industry’s
global community is confident about the present situation, giving it
an index of 6.4, in a survey done by UK-based Transport Intelligence,
although it doesn’t feel the same way regarding the economic
prospects over the next three months. Today’s strongest market,
China, is given a -28.1 confidence level for the next three months
while industry executives in India are optimistic about the market’s
prospects in the short to medium term.
The award-winning doctoral dissertation of Miquel Àngel Estrada, a
professor and research scientist based in Spain, talks about an easy-touse
tool in organising the transportation of a large number of goods.
His critique illustrates, among other things, the correlation between
the cost of handling goods and the capacity of vehicles to be used
in transporting these goods. “The vans, which fill up quickly, are the
better option to transport small packages when handling costs are
high while large trucks should be used when handling costs are low,”
says the article on page 27.
For its sections on “Fund Folio”, “Focus”, “The Gulf” and “MENA Region”,
The Link talks, respectively, about the Gulf’s declining credit quality,
publicly-listed shipping and logistics companies, projects in the GCC
that offer good returns and the low demand for exports and lower oil
prices putting countries in the Middle East and North Africa to the
test. In the last and new section, “Side View”, the magazine features
the Emirati cadet pilot programme of Etihad Airways. The programme
has grown considerably, with 55 UAE nationals undergoing training
to become fully qualified pilots with the airline, since its inception in
January 2007.
Managing Director
& Associate Publisher
frédéric paillé
fred@cpi-industry.com
Editorial Director
b Surendar
surendar@cpi-industry.com
Editor
Jose franco
jose@cpi-industry.com
Business Development Manager
Myk baxter
myk@cpidubai.com
Design
reynaldo delante Jr
rey@cpidubai.com
Julia gubanova
julia@cpi-industry.com
head of Digital Services
nadeem hood
nadeem@cpidubai.com
Webmaster
Troy Maagma | troy@cpidubai.com
Database/
Subscriptions Manager
purwanti Srirejeki
purwanti@cpi-industry.com
ADVERTiSinG EnQUiRiES
frédéric paillé +971 50 7147204
fred@cpi-industry.com
geoffrey f cadenhouse-beaty
+971 50 9105804
geoffrey@cpi-industry.com
Published by
1013 centre road,
new castle county
Wilmington, delaware, uSa
head Office
po box 13700
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Tel: +971 4 375-6830
fax: +971 4 434-1906
www.cpi-industry.com
our coVer
Cargoes on the port of
Dubai Creek, Deira: saying
that the logistics sector is a
key component of its growth
model, the Dubai government is
pushing for closer interactions
with the private sector to
develop the industry further
Photo by Rey Delante
printed by
excel printing press
copyright © 2009 cpi industry
all rights reserved
While the publishers have made
every effort to ensure the accuracy of all
information in this magazine,
they will not be held responsible
for any errors therein.
6
ThE supply chain anD logisTics linK March 2009

Notes & Quotes
buy The book
This way to the logistics sector
HOW have the fuel prices changed the aviation
industry, particularly the air cargo sector, in the UAE
and the wider Gulf Co-operation Council (GCC) region
What can you do to reduce greenhouse gas emissions
These are some of the issues and questions being
tackled by the Log. Middle East-SCLG yearbook
and directory 2009, released this month under the
collaboration of DVV Media Middle East and the Supply
Chain and Logistics Group (SCLG). “This yearbook
chronicles the changes that the UAE and the region
are experiencing every day,” says Dr Kanak Madrecha, a
consultative committee member of SCLG.
The directory highlights, for instance, the logisticsfriendly
countries worldwide, with the UAE leading
the other GCC states at No 20, out of 150 surveyed.
Quoting the World Bank’s Logistics Performance Index,
the directory mentions the efficiency and effectiveness
of customs and other border procedures in the UAE
and Bahrain, but says these do not fare well in Qatar.
Singapore, The Netherlands and Germany are the
friendliest countries when it comes to customs and
logistics services while Rwanda, Timor-Leste and
Afghanistan are at the bottom-rung of the index.
The directory also has a section featuring the best
industry innovators and managers, such as Wade
Thompson, sales and marketing director of CEVA
Logistics. His innovative supply-chain solution was
picked up by food companies supplying the military
units when the war broke out in East Timor in 1996.
Having eight sections, the directory is a
comprehensive guide to the supply chain and logistics
industry in the GCC region. Besides having GCC-wide
country reports, it covers topics on the sea freight, road
and transport, railway and air cargo sectors.
The reader, especially outside the industry, may at
first find the 264-page directory confusing, as it has
neither an introduction nor a note from the editor.
With the scope of its coverage, however, the directory
is, indeed, a valuable guide offering all the necessary
information on the industry.
This adherence to knowledge and
experience and its flexibility are
also the source of major strength of
dubai’s economy.
—dubai Chamber, on the ability of dubai
traders to do business with various regions and countries
This uncertainty about the future will place
additional pressure on the bottom lines and
earnings expectations of airlines across the
globe. —abdullah bin mohammad al Thani, chairman
of air arabia, on the challenges that lie ahead as the global
aviation industry gets a beating from the credit crisis and
low consumer confidence
we have listened to our customers, who
are being impacted by the global economic
slowdown, and have made the decision to
maintain rates at 2008 levels and extend
storage times. —mohammed al muallem, senior vicepresident
and managing director, dp World’s uae region,
on tariff rates at dubai’s Jebel ali port.
Trade links between the uae and Turkey have
grown substantially in recent years, and we
anticipate strong demand between these two
important commercial centres. — James hogan,
chief executive officer of etihad airways, on the airline’s
flight to the Turkish commercial city of istanbul from June 2
our survey has shown that some sectors
are doing much better than others, such as
intermodal and pharma logistics. developing
markets, such as China and India, are also
still good places to be doing business. —John
manners-Bell, chief executive of uK-based Transport
intelligence, on the global logistics community
[w]e see new rating activity remaining steady
with greater need for differentiation of credit
risk, and in line with companies’ attempts to
lock in liquidity as it becomes available. —
moody’s Investors Service, seeing the gulf arab states
accepting a more expensive funding in exchange for better
long-term liquidity.
[G]iven the necessary drawdown on reserves,
government spending would have to fall until
there were signs of a sustainable
recovery in the global economy
and oil prices stabilised above $50
per barrel. – eFG-hermes to gcc
8
ThE supply chain anD logisTics linK March 2009

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Inside SCLG
Moving the
logistics industry
forward
JOHN HALPIN
The author
DESPITE the continuing slowdown in
economic activity worldwide, we at the
Supply Chain and Logistics Group (SCLG)
are still bullish about our industry
and the vital role it plays in the global
economy. And being in Dubai has a lot
to do about this optimism, as the city
is a regional logistics hub. No wonder
the government has called for greater
participation by the industry’s private
sector in economic growth. The Dubai
Department of Economic Development
has created a series of forums for the
public and the private sectors to meet
and discuss the various challenges and
opportunities in the industry.
We have various concerns on how
to take advantage of the emerging
opportunities and how to tackle the
various challenges we face. Companies
engaged in the supply chain and logistics
business, for instance, face the daily
challenge of how to transport large
number of goods from port to port,
including which routes to take, the
loading capacity of support services, such
as trucks and vans, and the extent to
which they can be filled.
The credit crisis also remains a
problem to the industry, as banks are
still keeping tight reins on letters of
credit. We are well aware, however, that
we shouldn’t dwell so much on such
tight lending policies and, instead, move
forward, by looking for other sources of
financing. A distinguished speaker in a
recent SCLG-organised forum put it aptly
when he emphasised that companies
should prioritise partnerships and
streamline their operations to help ride
out the financial turmoil. Integrating our
systems to trim costs will undoubtedly
give us a good source of internal
financing.
The sea piracy off the coast of Somalia
is another issue that continues to dog our
industry. The pirates have become more
brazen in their criminal acts, engaging in
kidnap-for-ransom and earning millions
of dollars in ransom for hijacked ships.
This is a serious concern for companies
providing supply chain and logistics
services, as taking a safer but longer
route means spending more for fuel and
delayed shipping schedules.
Recently, the Somali pirates earned
$3.2 million when they released a
Ukrainian ship laden with Soviet-era
tanks and other heavy weapons. They
counted the money, dropped from
air through a parachute, and left in
motorboats. All this happened within
sight of the US Navy, who couldn’t arrest
the pirates for fear of endangering
the lives of the other seamen being
held hostage in separate areas. These
activities affect international commerce
and require the full support of the
international security community in
addressing the safe passage of vessels
around the globe.
There are other issues affecting our
industry that are much closer to home,
so we at the SCLG have been conducting
a series of forums to listen to the
concerns of our members and help them
find ways to deal with the current crisis.
We have some of the industry’s most
innovative and determined leaders, who
are much needed during challenging
times. By working closely together, we
will continue to provide solutions to
various challenges, and position the
regional industry as the benchmark
by which the global supply-chain
community measures itself.
John Halpin is general manager of Hy-Tech
Logistics Recruitment Services.
10
The supply chain and logistics link March 2009

Simplified operations to help
firms cope with credit crisis
PRIORITISING partnerships and integrating their systems
to streamline operations will help companies in the supply
chain and logistics industry cope with the global economic
slowdown, stressed a business management expert.
Speaking before a forum organised by the Supply Chain
and Logistics Group (SCLG), Professor Rajiv Aserkar also urged
companies to offer incentives for early purchase orders and
compete through services, not prices.
“We will find solutions to the impact of the global credit
crisis,” he said at the Global financial crisis – survival and
preparation for the future: The supply chain view. “And we
will have our way forward.”
Aserkar, who teaches courses in transportation and
warehousing management at the SP Jain Centre of
Management Dubai, also said that companies must look for
“internal financing”, such as reducing costs and obtaining
letters of credit, since banks have tightened lending.
He expressed confidence, however, that governments
will announce more stimulus packages to fuel development
worldwide. He said the construction industry “will have a
great time, because the money would go in that direction”.
He added that free trade agreements (FTAs) will help
increase savings and pave the way for a more vigorous trade
between parties concerned.
In December, member-states of the Gulf Co-operation
Council signed an FTA with Singapore. This allows tariff-free
access for 99% of domestic exports from Singapore as well as
free entry of all GCC goods to that Southeast Asian city-state.
Professor Rajiv Aserkar addressing a forum on financial crisis
March 2009 The supply chain and logistics link 11

Inside SCLG
Board of
Directors
Shashi Shekhar
Emirates SkyCargo
Mishal Hamed Kanoo
Kanoo Group
Mohammed Sharaf
DP World
Clifford Cuttelle
Tagstone
Sanjay Naik
Emirates Group
David Wild
SCLG membership
Fadi Ghandour
Aramex
Michael Proffitt
Hamdi Osman
FedEx
Saadi Al Rais
RHS Logistics
Graham Burne
Nakheel
Jinendra Sancheti
TNT Express
Corporate Membership
Membership with the Supply Chain
and Logistics Group (SCLG) is open
to all organisations. Corporate
members may nominate four to six
members, depending on the category
of membership – basic, privileged or
premier – they opt for. All nominated
members shall be allowed to vote at the
Annual General Meeting (AGM) and at
any Extraordinary General Meetings. The
Board of Directors (BoD) and Executive
Committee (EC) members shall decide
the annual fees for membership.
Individual Membership
This is open to any individual from
any part of the world. The annual
subscription shall be set from time-totime
as deemed necessary by the BoD
and EC members.
Student Membership
Only full-time students can be SCLG
members, but this membership does not
convey voting rights to the individual.
The annual fee shall be set from timeto-time
as deemed necessary by the BoD
and EC members.
Why be an SCLG Member
A membership allows access to
educational training, seminars
and networking evenings at
concessional and rebated rates. It also
provides rebates on subscription of
membership to SCLG’s international
partners. A membership card will
soon be issued to members allowing
them to receive discount offers from
leading retailers and service providers.
There is also a certificate that
distinguishes a member as a
professionally focused individual or
enterprise committed to the cause of the
supply chain and logistics industry.
For more details, please visit our
website on www.sclgme.org. If you wish
to volunteer to help us foster a better
supply chain and logistics community,
please contact Kanchan Vora on admin@
sclgme.org.
The SCLG Middle East is a non-profit
organisation working under the umbrella
of the Dubai Chamber of Commerce
and Industry to promote the cause of
the supply chain and logistics industry.
It brings opportunities for personal
and professional development through
networking prospects among like-minded
professionals and corporations on a
global basis.
The SCLG was founded with the help
of senior management professionals
representing a wide spectrum of
industries in the supply chain. It strives
to bring the best in education, seminars
and interaction through partnerships and
alliances with a variety of similar bodies
across the globe.
The group’s official magazine, The
Supply Chain and Logistics Link,
addresses the needs of the supply chain
professionals in the Middle East. It
presents news, views, developments and
information drawn from industry experts.
The first of its kind in the region, The Link
aspires to be a benchmark for the industry
community, offering valuable insights and
information to the target market.
12
The supply chain and logistics link March 2009

The magazine’s articles and
news features cover innovative
supply chain practices, emerging
technologies, e-commerce
and market information from
industry leaders.
SCLG’S Mission
The group aims to provide
an accessible and dynamic
networking environment that
facilitates the achievements of
its members in a community
that encourages professional
development and diversity in
the logistics and supply chain
management.
SCLG’S Objectives
To promote the cause of
the supply chain and logistics
industry and raise the standards
of all industries on end-to-end
supply chain
To protect the interests of
member organisations and
support government bodies in the
formulation of policy frameworks
for logistics organisations
To encourage the free exchange
of knowledge and skills relating to
supply chain and logistics among
its members
To provide members the
opportunity to network among
one another and to help
facilitate an efficient commercial
environment
To undertake studies and gather
information, statistical data and
official documents relevant to the
industry
To establish and maintain
good relations with similar
international organisations and
other professional groups, and to
provide members the opportunity
to network with like-minded
organisations
To conduct training courses,
seminars, conferences and studies
relating to logistics and supply
chain and to establish a library
and research centre to expand
the knowledge base information
on the industry
To promote the cause of education
in supply chain and logistics
among the UAE nationals, thereby
contributing to build a cadre of
professionals and highly-skilled
citizens to take up current and
future challenges in the industry.
Consultative
Committee
Members
Dr Satish Mapara
GlobeApex Management
Consultants
Sanjay Babur
Cosmos Insurance
Nigel Moore
Logistics Recruitment
Johnson Soans
Extron Electronics
Tayssir Awada
FedEx
Dirk Van Doorn
DHL
Roy A Patterson
UTi
Madhav Kurup
Hellmann Worldwide
Logistics
Arup Gupta
Sharaf Logistics
Usha Kaul Saraf
University of Dubai
Michael Stockdale
Dr Cedwyn Fernandes
University of
Middlesex
Pradeep Melakandy
Pan-Pacific Logistics
Dr Kanak Madrecha
Dubai World
Ravi Kashyap
Steinweg Sharaf
Geoff Wheatley
SSI Schaefer
(Middle East)
Reinhard Wind
USP Logistics
Jassim Saif
Emirates SkyCargo
Executive
Committee
Members
Soma Sekhar
SCLG President
TrackIT
Melvin Verghese
Transworld Group
John Halpin
Hytech Logistics
Ayman Ismail Ahmed
Mohsen Al Awadhi
Dubai Logistics City
Sebastian Thomas
Al Futtaim Retail
Andreas Dur
Xvise Logistics
Naveen Arun
DAMAC Holding
Brian Forbes
DHL Express
Stephen Cross
ATMS
Hemant Barke
Prudence Insurance
Brokers
March 2009 The supply chain and logistics link 13

Inside SclG
SCLG’s new members
For oVer two decades, Al Ghurair Foods has been the leading manufacturer of edible oils
and grain base products in the Middle East. Its mission is to provide nutritionally high,
environmentally friendly and quality food products that enhance and enrich the quality of life.
It is the leading player in the food business in the local market and the preferred supplier
in the international market. Besides edible oils, the company’s focus areas include flour, rice,
noodles, pasta, poultry, pulses, burghul, maize, mineral water and animal feed.
CaPITaL Star Shipping, an international freight forwarder, is committed to provide world-class
services and personalised solutions for all logistics needs. It aims for complete customer
satisfaction by becoming a ‘pole star’ with regard to guiding the client through a plethora of
options available in logistics.
The company is fairly young, but being managed by a group of dedicated professionals with
decades of international experience in the industry. It helps the client evaluate its logistics
requirements, and recommends strategies to ensure prompt shipment on budget. It plans to
build a good reputation by providing efficient, reliable and secure handling of cargo every time.
duBaI Customs is a government body that facilitates free trade and helps secure the integrity of
its city’s borders. It aims to be a world leader in customs administration by providing innovative
and proactive services to its clients.
Being a regulatory body and a member of an international network of customs authorities,
Dubai Customs supports free trade practices by identifying and addressing non-compliance
with the laws. Its responsibility extends to the people and businesses and international
agencies, such as the World Trade Organisation and the World Customs Organisation. It also
ensures that international conventions and agreements are strictly followed by the trade
community.
SKyCom has invested all its efforts in the service of the courier industry by continuously
upgrading its IT system and manpower and infrastructure capabilities, along with direct
network expansion. It is capable of handling freight movements by air, sea and land through
its group company, Skycom Cargo. It is also looking to build on logistics, with concentration on
warehousing and transportation.
After 15 years of operation, Skycom has expanded to other Gulf Arab states from its base in the
UAE. It also has offices in India, Germany and Singapore, and is planning of expanding further
to the US, Canada and the UK.
14
ThE supply chain anD logisTics linK March 2009

aLBa Logistics is a specialist in supply chain warehousing strategy, operation and productivity. It
focuses on the business of delivering client-value services, rather than making deliverables that
are often irrelevant to a client’s objectives. Its strategy is not just about methodology, but rather,
it’s giving clients the results that deliver true business value in the quickest and most effective
manner possible.
The company’s clients include GlaxoSmithKline, Pepsico, Braun and Actavis, among others.
dB Schenker is one of the leading global integrated logistics service providers, and has a leading
goods transport rail network at its disposal. It stands apart from its peers, with its dense network
of locations in the world’s most important economic regions. It offers air and ocean transport,
land transport in Europe and services in contract logistics and supply chain management.
With this special combination of services, the company can provide quick and efficient solutions
for the client’s various requirements with regard to trade and industry.
modern Freight Company (MFC) is a diversified transport and logistics company, with offices
and agents located strategically around the world. Owned by the Dubai Transport Company
(DUTCO), one of Dubai’s leading trade and transport groups, MFC has its managerial base at the
Jebel Ali Free Zone.
Its core business areas include logistics (warehousing and distribution), freight forwarding (sea,
air and land), international projects, container depot (including repairs and conversions) and
liner agency.
a ProVIder of supply chain management services, the Thakral Gulf Clearing & Forwarding (TGCF)
has been operating at Dubai’s Jebel Ali Free Zone since 1996. Equipped with modern facilities and
a professional team, the company also has facilities for packing, repacking and co-packing, and
provides various services from freight forwarding and warehousing to transport and distribution.
TGCF is a part of the multinational Thakral Group of Companies, which has headquarters in
Singapore.
March 2009 ThE supply chain anD logisTics linK 15

News & Views
Dubai’s Q4 exports surge 62%
EXPORTS and re-exports
by members of the Dubai
Chamber of Commerce and
Industry from October to
December surged over 62%
to $20.6 billion (Dh75.6bn)
from a year ago, with Saudi
Arabia and Iran as the largest
destinations.
This brought to $65.23
billion (Dh239.6bn) the
total amount of exports and
re-exports for 2008, up 42%
compared with the previous
year, according to the first
bulletin issued by Dubai
Chamber for February.
It said the success of Dubai
traders shows their ability
to triumph even during
hard times, and mirrors the
emirate’s capacity to weather
the global financial meltdown.
The traders also have the
ability to do business with
various regions and countries,
making use of their wellestablished
international
networks.
“This adherence to
knowledge and experience and
its flexibility are also the source
of major strength of Dubai’s
economy,” the bulletin said.
It added that Saudi
Arabia, the largest Gulf Arab
economy, and Iran contributed
a total increase of $6.72
billion (Dh24.7bn) from their
corresponding exports during
Value of exports/re-exports of Dubai Chamber members by destination per
quarter, 2008 (Source: Dubai Chamber Certificate of Origin Database Q4-2008)
the fourth quarter compared
with the third quarter.
Ethiopia, meanwhile,
climbed to the 16th, from
20th, place as the largest
export market for the 6,372
Dubai Chamber members, who
sold goods to 185 destinations
worldwide. This also made
that landlocked country in the
Horn of Africa as Dubai’s thirdlargest
contributor to quarterly
export growth.
The export-increase to
Ethiopia reached $60 million
(Dh220m) between October
and December, and that
to Egypt, Syria and Yemen
amounted to over $13.6
million (Dh50m) each.
The bulletin said
total exports to the Gulf
Co-operation Council (GCC)
increased 49.8% to $12.2
billion (Dh44.8bn) during the
fourth quarter from a year ago.
Qatar remained the secondlargest
destination for UAE
exports in the GCC after
Saudi Arabia, with value of
exports reaching $1.58 billion
(Dh5.8bn).
Exports to Kuwait, however,
dropped 6.5% to $789.52
million (Dh2.9bn) during the
fourth quarter while those
to Oman dropped 20.8% to
$517.27 million (Dh1.9bn) and,
to Bahrain, slumped 10% to
$245 million (Dh900m).
Air Arabia faces serious challenges
WHILE its net profit jumped
45.4% in the fourth quarter,
Air Arabia is set to face
serious challenges this year
as the global industry gets
a beating from the financial
meltdown and lower levels of
consumer confidence.
“This uncertainty about the
future will place additional
pressure on the bottom lines
and earnings expectations of
airlines across the globe,” said
Abdullah bin Mohammad Al
Thani, chairman of Air Arabia.
The International Air Travel
Association earlier said the
global aviation industry would
incur losses of up to $35 billion
this year, the biggest in history,
while losses in the Middle East
could double to $200 million.
Air Arabia, a budget carrier
based in the UAE emirate of
Sharjah, said net income rose
45.4% to $37 million (Dh136m)
between October and
December, as compared with
a year earlier, on increased
number of passengers.
It also announced a net profit
of $138.8 million (Dh510m)
for 2008, or up 35.6% from the
previous year, as turnover rose
61% to $565.2 million (Dh2.1bn).
The number of passengers
that flew with the airline grew
33% to 3.6 million last year
from 2.7 million in 2007, with
passenger average load factor –
passengers carried in proportion
to available seats – at 85%.
MSC Daniela
MSC bullish
on Gulf
market
THE GENEVA-based
Mediterranean Shipping
Company (MSC) is bullish
about growing its business in
the Gulf, citing its long-term
partnership with DP World.
“Our plans for the
future have not changed,
and the consolidation
and improvement of our
commercial activity in the area
remain strong and focused…”
said Captain G Aponte,
president of MSC.
Recently, the company’s
MSC Daniela, the world’s
largest container vessel, made
a maiden call at the Jebel
Ali Port, DP World’s flagship
marine terminal.
“It is also due to this that
MSC is in a position to grow
in the Gulf,” Aponte said,
stressing that DP World,
the world’s fourth-largest
marine terminal operator,
has a “consistent and
pragmatic” approach to port
management.
Capable of carrying 14,000
of 20-foot equivalent units
(TEUs), the ship spearheads
the new generation of megavessels
that can accommodate
over 12,000 TEUs. She is 51.29
metres wide and has a keel-tomast
height of 67.26 metres.
MSC Daniela berthed at
Terminal 2 in Jebel Ali after
visiting the DP World-operated
Jeddah Islamic Port. She
provides weekly services with
very fast transit times from the
West Mediterranean, the US,
Canada, West Africa and South
America.
16
The supply chain and logistics link March 2009

Indian delegation seeks
investment opportunities in Dubai
AVIATION and retail investors
were among the delegates from
14 major companies in India
which visited Dubai in February
to bolster trade ties between the
two parties.
The delegation met with
officials of the Dubai Export
Development Corporation
(EDC) to express its interests
in developing various areas of
mutual co-operation, said EDC
in a statement.
The other delegates
are executives of Indian
companies engaged in
real estate, telecoms,
pharmaceutical, travel,
exports, finance, agriculture
and food and beverage.
“India is one of the
most important countries
for Dubai in terms of the
export industry,” said Farid
Karmostaji, director of Export
Market Development at EDC.
Organised by the
Associated Chambers of
Commerce and Industry
of India (ASSOCHAM), the
Farid Karmostaji (right) and Amit Dev
delegation was also set to meet
with officials of the Jebel Ali
Free Zone Authority and the
Dubai Internet City.
“Engaging business with an
apex industry body, such as
ASSOCHAM, is very vital to EDC,
as this organisation represents
the interests of industry and
trade from all regions of India,”
Karmostaji said.
The director of operations
at Time Broad Band, Amit
Dev, and Abdul Khalique, head
of ASSOCHAM International
Division, headed the
Offshore projects give rise
to demand for workboats
THERE is a growing demand
for sturdy workboats in
the Middle East, owing to
various developments in the
offshore oil and gas sector
and maritime and shoreline
projects, according to an
industry observer.
Christopher Hayman,
chairman of event organiser
Seatrade, said workboats
include tugs, ferries and supply
vessels; police, fire, patrol,
pilot, rescue and oil-spill boats;
and dredgers, barges and
floating cranes.
“Shoreline projects are
reaching maturity along the
UAE coast, and there is a
growing need for the right
type of emergency boats to
provide the sophisticated
maritime firefighting and
rescue services expected of
modern cities…” he said.
He stressed that about
2,000 workboats are currently
being docked or repaired in
the Middle East, showing
a promising growth for
workboats despite the global
economic slowdown.
“Some operators may slow
down in their exploration
and development activity, but
few are expected to cut back
dramatically,” he said. “In
fact, new vessels to support
the offshore industry in the
Gulf continue to be ordered
or delivered.”
He added that offshore
delegation seeking investment
opportunities in Dubai.
“One of our missions is to
convey industry viewpoints
proactively, Dev said, “and to
communicate with various
governments overseas for
public-private partnerships for
economic development.”
Established in 2006, EDC is on
a broader campaign to develop
and enhance trade relationships
with other countries worldwide.
It is an autonomous organisation
under the directive of the Dubai
government.
Christopher Hayman
supply vessels deliver various
goods, from drill pipes to
potable water and oil and gas
drilling rigs to platforms at sea.
Shallow water production, such
as that in the Middle East, is
the biggest offshore market.
Hayman said that Seatrade
is organising The 2009 Middle
East Workboats Exhibition &
Conference, from October 5 to
7, at the Abu Dhabi National
Exhibition Centre.
DED creates
logistics
forums
THE DUBAI government is
keen on interacting with private
logistics companies to help it
address the challenges and
opportunities in the industry.
Forums have been organised
by the Dubai Department
Economic Development (DED)
to address this, providing
venues for both government and
companies concerned to talk
among themselves.
“A number of issues
related to developing the
logistics industry and ways
to raise the standard of
those working in the field are
being tackled through these
ongoing forums,” said Khalid
Al Kassim, deputy directorgeneral
for planning and
development at DED.
The organisation’s director
for International Logistics
Services, David Harris, said
the forums help align the
interests of the government
and the private sector, and
develop various strategic
initiatives to strengthen the
logistics industry.
“The sector has been a
cornerstone of economic
development,” he said, “and
the better the communication
and alignment, the more it can
flourish and support Dubai’s
growth.”
In January, DED signed a
memorandum of understanding
with DHL Exel Supply Chain, a
contract logistics firm, to help
improve Dubai’s logistics master
planning in a way that it would
support the growth of the other
sectors.
This covers the development
of carbon reduction models and
technology solutions within the
logistics sector and designing
a ‘service villages’ concept to
reduce port congestion and
introducing innovative platforms
to assist the growth of smalland
medium-sized enterprises.
March 2009 The supply chain and logistics link 17

News & Views
A view of the Abu Dhabi airport
Concerted effort on aviation
emergency plan urged
A MORE successful aviation
crisis management programme
needs a concerted effort
between airports and airlines,
stressed an official of the
Abu Dhabi Airports Company
(ADAC).
“Airports and airlines must
work together to implement
jointly the appropriate
measures to cover any
crisis,” said Nasser Juma,
vice-president for safety and
security at ADAC.
This includes managing
delays, damage to property and
customer safety and well-being,
he added, speaking before
the recent Aviation Crisis
Management Conference, in
Abu Dhabi.
Sheikha Al Maskari, ADAC’s
vice-president for corporate
affairs, meanwhile, said the
company is pushing for a more
active participation by UAE
nationals in the development
of the country’s aviation sector,
in line with the strategic plans
Sheikha Al Maskari
of the federal government.
“ADAC seeks to invest in
human resources, particularly
in our national resources, as
we consider them an important
investment for which we have
great hopes,” she said, following
ADAC’s participation in a
recent job fair.
Juma warned that the
negative impact of an aviation
accident may be felt for years
if not handled correctly. A
well-formulated emergency
response plan supported by
strong leadership is, therefore,
the key to a better crisis
management programme.
He said that a jointly
developed emergency plan
allows all parties to agree
on roles, responsibilities and
actions between the service
providers, airport operators and
airlines.
This also helps strengthen
the quick-response mechanism,
improve communication
systems and deliver a better
understanding of what
resources and equipment are
available to both parties during
an emergency.
“If sufficient finance and
resources are not committed
to the planning, training and
exercising process,” Juma said,
“an organisation will risk a less
than optimum response, loss
of public confidence and loss
of lives.”
A Pharma World’s facility under
construction
Pharma
World sees
50% growth
over 5yrs
PHARMA World Holdings (PWH
has signed contracts with some
major pharmaceutical firms
worldwide, including Johnson &
Johnson and GlaxoSmithKline,
which will help facilitate growth.
A third-party logistics
provider for the pharmaceutical
and healthcare sector, PWH
expects a 50% compound
growth over the next five years
based on current sales and
expected market share.
The company’s new
warehouse at the Jebel Ali Free
Zone is under construction
and will start operating by
May, according to a statement
released earlier.
“With the operation of this
new facility, we will be able to
provide logistics solutions on
a wider scale,” said Maher J
Kheder, business development
manager PWH.
With a total land area of
9,200 square metres, the
facility’s capacity is well
over 15,000 pallets. It will
have a warehousing space
of 5,900 square metres,
with another 600 square
metres being allocated for
administrative spaces.
The facility will make
provisions for receiving and
dispatching, cold storage and
humidity control, among other
services, allowing clients to
improve delivery service and
reduce supply chain costs.
18
The supply chain and logistics link March 2009

DHL Freight improves
Europe-Middle East network
DHL Freight has improved its
road transport services between
Europe and the Middle East,
offering customers to choose
their most suitable mode of
transport – air, ocean or road –
in order to minimise costs.
“With this new option, it
is really worthwhile for our
customers with clients in
Europe and/or the Middle East
region to take another look at
their shipment structure,” said
the company’s chief executive
officer, Thomas George.
The impoved network of
DHL Freight, the overland
transport business of Deutsche
Post World Net, between the
two regions means lower costs
and easier processes than
those of air freight, and shorter
transit time compared with
the ocean freight.
This systematised service,
which also paves the way for an
optimised supply chain, offers
door-to-door delivery supported
by an online track-and-trace
system, providing full shipment
visibility to customers.
A wide range of market sectors,
ABOUT six million online
transactions passed through
the electronic platform of
Dubai Trade in 2008, up 50%
from the previous year, on
increased number of services
made available to clients.
These were mostly entities
concerned directly with
commercial transactions, such
as DP World, Dubai Multi-
Commodities Centre and
Economic Zones World – all
flagship companies under the
government-owned Dubai
World – and Dubai Customs.
Dubai Trade, a part of the
Dubai World Group, said there are
DHL’s door-to-door delivery is supported by an online track-and-trace system
such as pharmaceutical, electrical
and engineering, construction,
automotive and oil and gas, may
go for the economical door-to-door
service for shipments from over 38
countries in Europe to destinations
across the Middle East.
“By continually introducing
new services, which are
supported by investments in
infrastructure, increased network
coverage and technology, we
broaden DHL’s strategic footprint
and service offering across the
region,” George said.
DHL’s European shipments
are consolidated in 13 major
Dubai Trade posts 50% rise
in online transactions
now 612 online services accessible
on its portal – www.dubaitrade.ae
– compared with the 325 in 2007.
Built to cover the entire supply
chain, the portal links the trading
community and key industrial
sectors.
“Dubai Trade is committed
to continue providing effective
support to Dubai’s trading
community in a bigger way,”
said Mahmood Al Bastaki, the
company’s director. “Our effort
on this front won World Bank’s
praise last year.”
The World Bank described
as having “utmost quality” the
data it prepared in 2008 with
gateways and forwarded to its
transit centre in Istanbul, from
where the cargoes are fed into
the Middle East network.
Operating in 16 major
distribution centres and
numerous local terminals in
the Middle East, DHL also takes
care of all administrative work,
such as the letters of credit and
the all risk-insurance services.
“With access to the larger
DHL network,” the company
said, “DHL Freight customers
can benefit from further
synergies when it comes to
courier services.”
Dubai Trade’s key stakeholders
on the export and import
procedures, timelines and costs.
The data prompted the
“Doing Business Report”
released by the World Bank
to modify the UAE’s ranking
in the ‘Trading across Borders’
category to 14 for 2009 from
24 last year. The country’s
ranking on the ‘Ease of Doing
Business’ category was also
raised to 46 from 68 for the
same period.
The report evaluated the
business regulations and their
enforcement in 181 economies
and major cities worldwide.
DP World
RETAINS
RATES AT
JEBEL ALI
DP World, the world’s fourthlargest
marine terminal
operator, has committed to
maintain for this year its 2008
tariff rates at its flagship Jebel
Ali Port, shelving an earlier
plan to raise container handling
fees for its UAE operations.
The company, which
recently reduced free storage
time in the terminal to relieve
congestion over the summer
months, has also been
providing all local importers a
10-day free storage time since
March 1.
“We have listened to our
customers, who are being
impacted by the global
economic slowdown, and have
made the decision to maintain
rates at 2008 levels and
extend storage times,” said
Mohammed Al Muallem, senior
vice-president and managing
director, DP World’s UAE
Region. “This will give them a
measure of relief as they plan
for the year.”
Dirk Van Den Bosch, chief
commercial officer, DP World’s
UAE Region, noted the 100%
storage savings for containers
which would typically remain
at the terminal for 10 days. He
also said that maintaining the
existing tariff rates will ensure
“cost stability” for Dubai
traders.
However, some traders
said at the beginning of the
year that port handling and
storage tariffs at the Jebel Ali
Port would drop, owing to a
reduction in operational costs.
The port expects to grow
its throughput further this
year, following the scheduled
completion of its $1.5-billion
(Dh5.5bn) Jebel Ali Terminal 2
project by the end of February.
It posted an 11% increase in
throughput last year.
March 2009 The supply chain and logistics link 19

News & Views
UPS invests $1 billion a year for service improvement
UPS offers domestic services
in UAE, 15 other countries
UPS, a global supply chain
courier, has begun offering
domestic express pickup and
delivery services within the
UAE and 15 other countries
across the Middle East, Africa,
Europe and Latin America.
These include Saudi Arabia,
Algeria, Pakistan, South Africa,
Kenya, Cyprus, Czech Republic,
Hungary, Kazakhstan, Malta,
Romania, Serbia, Ukraine,
Argentina and Chile.
The company, meanwhile,
reported an operating profit
of $5.4 billion and diluted
earnings per share of $2.94 for
2008. In a statement, it said
there were lower package and
freight volumes due to the
global credit crisis.
“Consequently, we’re making
the tough decisions necessary
to adapt our enterprise to
today’s realities,” said Scott
Davis, chairman and chief
executive officer of UPS.
“This includes changes in
Scott Davis
organisational structure,
compensation and network
configuration.”
The domestic services
allow UPS customers in the
16 countries to eliminate
multiple shipping processes
by consolidating their
package delivery services with
only one carrier.
UAE customers will also
be able to use the same
technology platform for
tracking, visibility and billing
by using UPS for their domestic
and international shipping
requirements.
“This expansion represents
an investment for the future
through markets where we’re
seeing growing demand,” said
Dan Brutto, president of UPS
International. “While we’ve
provided international services
to these countries for years,
we see an opportunity now to
expand our customer base and
grow our business.”
UPS, which provides package
delivery service in more than
200 countries and territories,
has invested over $1 billion
a year over the past two
decades to develop information
technology solutions that help
customers connect with new
markets.
Abu Dhabi’s
mass
transport
plan
ABU Dhabi’s Surface Transport
Master Plan (STMP), which is
on its final phase, calls for the
establishment of a high-quality,
high-capacity metro rail system
covering 131 kilometres and
supported by tram and bus
services.
A major initiative being
undertaken by the Abu Dhabi
Department of Transport, STMP
was hatched to develop a
comprehensive plan for surface
transport, including the different
modes for passengers and freight.
The plan is looking at roads
projects, a Metro and a Light Rail
Transit system to meet the mass
transport needs of Abu Dhabi
until 2030. These include having
optimal connectivity between
the Abu Dhabi Island and its
upcoming communities, such as
Saadiyat, Baniyas Islands and Al
Raha Beach.
Last month, the Abu Dhabi
government invited bids for the
Abu Dhabi Metro Study.
With three phases – feasibility
study, preliminary design and
final contract documentation
and tender award – the STMP
has an overall objective to help
ensure the implementation of the
Abu Dhabi Metro, in accordance
with its schedule and technical
specifications.
The main tasks for the metro
include identifying the parameters
of the line covering its alignment,
track rail systems and station
locations; selecting the best
project urban insertion and
providing the capital, operation
and maintenance cost estimates.
These also cover
the schedule for project
implementation; the revision of
alternative options for design,
construction, procurement
and operations and the
specifications on how the project
can maximise its patronage and
financial viability.
20
The supply chain and logistics link March 2009

Port of Salalah, APL to
operate new terminal
by 2011
Abu Dhabi unveils mass transport plan
OMAN’S Port of Salalah and
container shipping firm, APL,
have entered into a joint
venture to operate a new twoberth
container terminal by
2011, after the expansion of an
existing terminal at the port.
“This agreement ensures
guaranteed access to capacity
for APL in one of the world’s
most desirable locations for
transshipment,” said Martijn
van de Linde, the port’s chief
executive officer (CEO). He
added that the port has
partnered with APL since 2003.
The project covers a
28-hectare, deep-sea facility that
will have a quay length of 700
metres and an annual capacity
of 1.6 million 20-foot equivalent
units (TEUs). The terminal will
be able to handle vessels of
more than 10,000 TEUs.
Salalah is on the
southwest coast of Oman,
making it one of the most
ideal transshipment hubs
connecting the East-West
container routes to the Middle
East and South Asia.
“The partnership with
the Port of Salalah is part of
our long-term commitment
Port of Salalah
to enhance our service
to customers,” said Ron
Widdows, group CEO of
Neptune Orient Lines, the
parent company of APL.
The Port of Salalah,
which is the facility owner,
has a 30-year concession
to operate the port and act
as its authority. It began
operating in 1998 and now
has six container berths and a
capacity of 4.5 million TEUs.
APL’s global portfolio
includes wholly-owned
terminals on the US West
Coast of Los Angeles, Seattle,
Oakland and Dutch Harbour;
the ports in Kobe and
Yokohama ports, Japan, and in
Taiwan.
Etihad’s Istanbul flight to
boost UAE-Turkey trade links
STARTING from June 2, Etihad Airways
will fly to the Turkish commercial city of
Istanbul, in line with boosting its flight
programme to Europe and to support the
growing trade links between the UAE and
Turkey.
The UAE has $4 billion worth of
investments in Turkey, which has
committed to invest $40 billion in
the UAE over the next four years. The
volume of trade between the UAE and
Istanbul, Turkey’s biggest city, grew
400% to $2.57 billion in 2007 from $700
million in 2002.
James Hogan, the airline’s chief
executive officer, said the initial flight
to Istanbul is four times a week, but
will be expanded to five times a week
by October. This will also provide
“convenient onward connections” to
cities with well-established Turkish
communities, such as Sydney and
Melbourne.
“Trade links between the UAE and
Turkey have grown substantially in
recent years, and we anticipate strong
demand between these two important
commercial centres,” he said, adding
that a two-class – business and
economy – A320 will be deployed for
the route.
The Abu Dhabi-Istanbul route will
bring to 13 the number of European
cities that Etihad services, and increase
its international flight network to 54
cities. The airline will also begin flights
to Melbourne, Australia and the Greek
capital of Athens within this year.
Etihad, meanwhile, has stressed the
importance of Italy to its global flight
network, saying it will increase to fivea-week
from three-a-week the number
of flights between its home-base of Abu
Dhabi and Milan beginning on March
29. The airline launched its Milan
flights in September 2007.
“The increase in our Italian flights
follows a record year for the airline,
with more than 55,000 passengers
flying between Abu Dhabi and Milan,
and seat factors currently averaging
85%,” said Geert Boven, the airline’s
executive vice-president for sales and
services.
Etihad has also begun placing its
two-letter code, EY, on both of Kuwait
Airways’ weekly services between
Kuwait and Abu Dhabi from February 1.
Gulls in the port of Istanbul
The Kuwaiti airline has also placed its ‘KU’ code
on the 19 weekly services operated by Etihad on
the same route.
These are part of a new code share agreement
between the two airlines, with an aim to expand
their network. The deal gives travelers a choice
from 21 weekly flights between Abu Dhabi and
Kuwait City.
March 2009 The supply chain and logistics link 21

News & Views
Roundup
Aircraft movements in Abu Dhabi rise 2.8% in Jan
THE ABU Dhabi
International Airport posted
a two per cent rise in cargo
tonnage in January from a
year earlier, while aircraft
movements were up 2.8% for
the same period. Cargo and
aircraft movements in the
year to January increased
11.2% and 11.7%, respectively,
according to the Abu Dhabi
Airports Company (ADAC). The
airport also posted a 10% rise
in passenger traffic in January
from a year ago, despite the
global economic downturn,
said ADAC, which operates and
manages the Abu Dhabi and Al
Ain international airports.
LARGE oil tankers will
soon be able to load up crude
exports at the UAE emirate
of Fujairah from the capital
Abu Dhabi, as work on a new
construction facility is under
way. The existing Abu Dhabi-
Fujairah oil line currently
supplies small carriers.
Captain Mousa Murad,
general manager of the Port
of Fujairah, told Emirates
Business 24/7 in February
that the facility – Industrial
Port – will be able to handle
up to 70% of Abu Dhabi’s
total crude exports upon
completion.
The port’s strategic location
means that oil will not have
to pass through the Strait of
Hormuz, which is a flashpoint
due to the ongoing diplomatic
tiff between Iran and the
West over Tehran’s nuclear
programme. Supplies will be
delivered to the port through
a pipeline and stored in giant
reservoirs on the docks, and
huge tankers moored offshore
will then be loaded through a
system of pipes.
ABOUT 25 new factories,
including container,
pharmaceutical, waste
recycling, ceramic and
equipment spare parts have
been instrumental in the
expansion drive of the Fujairah
Free Zone Authority, with
investments of $54.3 million
(Dh200m) over the next three
years. The free zone has so
far attracted over 1,500 firms,
with $543.5 million (Dh2bn)
in investments, since it began
operating in 1991.
EHRHARDT + Partner
Solutions, a German provider
of warehouse management
services, has announced that
all its intra-logistics processes
are now guaranteed by a
digital video documentation.
LFS 400, a new standard
module in the warehouse
management system, saves and
archives the video sequences
of storage processes and
connects the image data with
the information on the flow of
materials.
“This way, LFS 400 increases
the quality of the turnover
processes, minimises losses
in shipping and simplifies
internal investigation,” said
the company’s managing
director, Hermann Ehrhardt.
“At the same time, we reduce
additional work, which is
necessary in case of returns or
damages to goods.
GULF Navigation has
announced a 23% rise
in net profit to $40.3
million (Dh148.2m) for
2008 compared with
the previous year, with
revenues advancing 45% to
$107.8 million (Dh396m),
on reliance on long-term
charters. “We were able to
deliver a robust performance,
concrete financial results
and remarkable growth
across all business areas,”
said the company’s chairman,
Abdullah Al Shuraim.
The board of Gulf
Navigation, which owns and
operates tankers for crude,
clean petroleum products
and chemicals, also
proposed a cash dividend of
eight fils per share for 2008,
or eight per cent of the
share capital.
AGILITY, a global
logistics firm based in the
Middle East, has acquired the
Finnish forwarder and logistics
provider, Oy O. Nyström
& Company, in a bid to
strengthen its platform in the
Nordic region. The deal “marks
an important milestone in
the company’s pan-European
development”, Agility said,
including a minority stake in
a joint venture in Denmark
and agents in Norway and
Finland.
Jan-Eric Skogster, chief
executive officer of Nyström,
is tasked to continue
running his company, which
will be rebranded as ‘Agility’.
He said there are no job cuts
planned as a result of the
acquisition.
ARAMEX has announced
a 21% rise in net profit to
$10.6 million (Dh38.8m)
for the fourth quarter from
a year earlier, owing to
“significant improvement in
margins” on its key products.
Revenues increased 17% to
$565.2 million (Dh2.1bn)
in 2008 compared with the
previous year while net profit
surged 21% to $40.1 million
(Dh147.3m) from $33.1
million (Dh121.5m) during the
same period.
Gulf Navigation owns and operates tankers for crude and chemicals
22
The supply chain and logistics link March 2009

Overseas
A US warship
WITHIN sight of two
US warships, Somali pirates
counted the $3.2 million in
ransom on February 5 after
they released an arms-laden
Ukrainian freighter, ending
a four-month standoff that
attracted world attention
on piracy off the coast of
Somalia. The pirates took off in
motorboats as the coalition of
international forces authorised
by the UN to pursue them on
land, air and at sea could not
seize them for fear of putting
at risk the lives of other
seamen held hostage on other
hijacked ships.
Vessels from the US Navy’s
Fifth Fleet surrounded the
MV Faina, loaded with Sovietera
tanks and other heavy
weapons, when it was seized
on September 25, making sure
the arms on board would not
get into the hands of Somali
insurgents with links to Al
Qaida. This was one of the most
brazen attacks on shipping off
the coast of Somalia.
“We have a very healthy
balance sheet with little
debt,” said Fadi Ghandour,
the company’s founder and
chief executive officer, “and
we intend to keep it that way
in 2009.” Aramex recently
acquired Metrolife Middle
< Fadi Ghandour
THE EUROPEAN Commission
(EC) has adopted an action plan
aimed at, among other things,
simplifying administrative
formalities imposed upon
shipping companies. This
also involves drawing up
recommendations for memberstates
of the European Union
to create “a maritime transport
area without borders in
Europe”.
Antonio Tajani, EC vicepresident,
said: “This
commission considers that
the necessary conditions
for setting up a barrier-free
maritime transport area are
now in place, and that relevant
measures may be introduced
in a staggered fashion between
2010 and 2013.”
MAERSK Line said it
would raise its eastbound
Europe-Asia trade general
rates by a total of $50 per
20-equivalent units (TEUs), or
$25 per TEUs on March 1 and
on April 1. The Denmark-based
East, a records management
company under Infofort.
Metrolife has operations in
the Middle East and North
Africa.
GULFTAINER has
announced a new connection
at its Khorfakkan Container
Terminal, in the east
global container shipping said
there are signs of growing
demand in sea freight due to
the weak sterling and euro.
“As a result of increasing
costs associated with the
growing demand, and to ensure
sustainable freight rates,” the
company said in a statement,
“Maersk will enact commodity
rate increases for export cargo
from Europe to Asia.”
PORTS and local
authorities across the UK have
been letting out moorings for
unused vessels following a
slump in demand for shipping.
The Fal river in the Carrick
District, Cornwall, for instance,
is now home to at least nine
laid-up ships. Ship owners
started looking for lay-up berths
after the rates earned by cargo
ships collapsed in September
and October. While the sector
experienced a mild recovery in
December and January, charter
rates for the ships are still down
90% from May.
Maersk Line raises Europe-Asia trade rates
coast of Sharjah, as the
Mediterranean Club Express
(MEX) service is calling
weekly at the terminal. The
first call was made by CMA-
CGM Balzac, in February, en
route to ports in Southeast
Asia, China and South Korea
from various areas in the
Mediterranean.
OIL companies have
continued building up vast
floating reserves of unsold
crude oil on supertankers in
the North Sea, US Gulf, in the
Mediterranean and off the
coast of West Africa – with
an aim to take advantage of
higher prices in the coming
months. Reuters reported
in early February that the
stockpile on very large crude
carriers (VLCC) had probably
reached 80 million barrels, or
equivalent to a day’s global oil
consumption.
The discount for prompt oil
had deepened again by end-
January, owing to the release
of some oil from storage and
the traders’ re-booking of
vessels on long-term contracts
with storage options. The
week before that the Royal
Dutch Shell sold three
cargoes of North Sea Forties
crude by transshipment,
prompting analysts to say
that the storage trade could
be over.
March 2009 The supply chain and logistics link 23

News & Views
Overseas
GERMAN carrier Senator Lines said
it would close shop by the end of
February due to the financial turmoil,
making it the first major victim in
the container shipping sector. Owned
80% by Hanjin Shipping, a Korean
shipping operator, since 1977, Senator
Lines cited “reduced volumes, together
with overcapacity and extreme
unhealthy competition, especially on
the East-West routes” as a result of
the global economic crisis. It vowed to
deliver all containers and honour its
other obligations.
WALLENIUS Wilhelmsen Logistics
has signed a contract with the Port
of Gothenburg, Sweden, to make the
port a transshipment centre for its
services in the Baltic region. A new
transshipment service, especially for
high and heavy cargoes from the
Americas and Asia to Russia, was
established from Gothenburg to St
Petersburg, Russia, via Kota in Finland.
The new service will be maintained
by MV Vinna, which is capable of
carrying a wide range of cargoes,
including cars, buses, trucks and
machinery for construction and
agriculture. The use of larger vessels
for longer journeys helps minimise
shipping’s environmental impact on
the Baltic region.
GAC Shipping & Cargo Systems
Philippines, a subsidiary of Dubaibased
GAC Group, has extended its
10-year partnership with Zuellig
Pharma Corporation which involves
GAC providing transport and
customs clearance services to the
pharmaceutical distributor. Jake
Cuerva, president and managing
director of GAC Philippines, said
Zuellig evaluates its providers twice
yearly, and that his company did well
in those assessments.
GAC Thailand, meanwhile, signed
a three-year deal with JewelsAgent.
com Company which covers free zone
warehousing and other services at Lad
Krabang. This affords the jewellery
exporter to save 20% on costs, as
it is allowed to assemble and pack
its goods inside the free zone, and
exempted from value-added tax and
all import duties.
Many organisations are taking steps to reduce carbon emissions
Few firms manage their supply
chain carbon footprints
ONLY 10% of companies surveyed in North
America, Europe and Asia are actively
modelling their supply-chain carbon
footprints and have successful sustainable
initiatives, according to a report released by
Accenture in February.
“Supply chain masters are making
great strides in linking cost effectiveness,
customer service and sustainable supplychain
practices,” said Jonathan Wright,
senior executive at Accenture’s Supply Chain
Management practice.
The report said the masters, or
organisations that performed well in cost
effectiveness and customer service, are more
than twice as likely as the non-masters
(under-performers) to model their supply
chain carbon footprints and implement
successful sustainable initiatives.
“Despite today’s reduced energy costs,
there continues to be a business case for
greening the supply chain, resulting in lower
costs as well as environmentally responsible
processes,” Wright stressed.
Accenture, a global management
consulting, technology services and
outsourcing firm, also said that 37% of 245
supply chain executives are not aware of
the level of supply chain emissions in their
network.
It emphasised that 38% of respondents
had undertaken at least one green initiative
in their transport fleet which involves green
fuels, vehicles with hybrid engines and
streamlined vehicle design. It also said that
86% of respondents had implemented at
least one green initiative in their warehouses,
mostly in the areas of recycling and using
natural light, lighting management systems
and energy-efficient bulbs.
“The study findings demonstrate that the
vast majority of organisations are taking steps
to reduce carbon emissions,” Wright said.
Accenture surveyed the supplychain
executives responsible for their
organisations’ logistics, warehousing and
transportation operations. This was done
between May and July.
24
The supply chain and logistics link March 2009

US retail container traffic to drop 12% in H1
CARGO volume at major US retail
container ports is seen to decrease by 12%
during the first half of the year, a much
faster drop compared with the 7.9% slump
it recorded by the end of 2008.
The monthly Port Tracker report,
released in February by US-based
National Retail Federation (NRF)
and IHS Global Insight, put last
year’s volume at 15.2 million 20-foot
equivalent units (TEUs), down from 16.5
million TEUs posted the previous year.
The NRF forecast that cargo volume
between January and June would be 6.6
million TEUs, down 11.8% from the 7.5
million TEUs recorded a year ago.
“Unfortunately, cargo volume at
the ports reflects retailers’ anticipated
sales, and NRF expects that sales will
get worse before they get better,” said
Jonathan Gold, vice-president for supply
chain and customs policy at NRF.
“Retailers are going to import only what
they can sell.”
The forecast for March is at 1.08
million TEUs, down seven per cent
from a year earlier; April at 1.14 million
TEUs, down 10.1%; May, 1.16 million
TEUs, down 11% and 1.19 million TEUs,
down 8.5%, for June.
In January, the cargo volume was
forecast at 1.04 million TEUs, down
15.8% from January 2008, while February,
traditionally the slowest month of the
year, was forecast at one million TEUs,
down 18.7% from a year ago.
The US ports covered by Port Tracker
are Los Angeles/Long Beach, Oakland,
Seattle and Tacoma on the west coast;
New York/New Jersey, Hampton Roads,
Charleston and Savannah on the east
coast and Houston on the Gulf coast.
A marina and cargo terminal at Long Beach, Los Angeles
March 2009 The supply chain and logistics link 25

The Industry
Trains in an Indian railway station: ‘India is still a good place to be doing business’
Strongest, weakest logistics markets
DESPITE the economic gloom, the global logistics
community is still confident about the present
industry, giving it an index of 6.4. It shows a
much lesser confidence index, however, when it
comes to economic prospects over the next three
months. Any result above zero is positive, says the first Global
Logistics Business Confidence Index released by Transport
Intelligence (Ti), in a scale of between 100 and -100.
A UK-based research firm focusing on the transport
activities worldwide, the Ti study reveals a slightly improving
confidence on economic prospects over a 12-month period
at -26.5. Comprising over 500 respondents from all sectors
worldwide, Ti says of its study done for February: “It is
designed to provide an indication of the strength of the
industry and a valuable tool in assessing when the industry
will come out of recession.”
While China is rated the strongest market currently,
with an index of 34.4, this confidence quickly sinks to
-28.1 over a three-month period and -31.3 for the next
12 months. Respondents from India were very optimistic
about the market’s prospects in the short to medium
term, but those from the logistics industry across North
America were the most pessimistic, giving the present
market a -8.62 confidence level.
Having a present confidence index of 24.3, the intermodal
sector has the most positive outlook within the industry while
the road/freight and express sectors were the least positive.
The sea freight forwarding and shipping sectors fall below the
average level while the rest also have negative ratings over the
three- and 12-month periods.
“Our new Business Confidence Index shows that although
there is a lot of negative sentiment in the market regarding
its future prospects, on a global basis the industry is still just
about keeping its head above water,” says John Manners-Bell,
Ti’s chief executive. “Our survey has shown that some sectors
are doing much better than others, such as intermodal and
pharma logistics. Developing markets, such as China and
India, are also still good places to be doing business.”
The pharmaceutical and healthcare logistics sector has
the highest confidence level now at 38.9 by industry vertical
sector, the Ti study says, and also for the next 12 months.
The consumers’ vital need for drugs and treatment, coupled
with the large purchases by governments, makes the sector
one of the most secular, or least affected by market volatility.
The least confident sector is industrial, owing to a slump in
construction and infrastructure projects.
26
The supply chain and logistics link March 2009

Points of delivery
IF you are facing so many challenges in organising the
transportation of a large number of goods, a doctoral
paper that won a major award in Spain could offer
some help. The dissertation talks about an easy-to-use
tool that offers logistics mangers a way to improve
on the existing practices of delivering goods from points of
origin to various delivery points. This also guarantees reduced
costs and the prompt delivery of goods.
Titled “Analysis of efficient strategies in parcel-distribution
logistics”, the doctoral thesis analyses an existing system, and
then continues to modify it to be more useful to the industry.
A group of operations is involved in this system, called “tabu
search-based metheuristic algorithm”, which defines the
route, the size of the vehicles and the location of the stopping
points; it then estimates the costs and chooses a strategy on
how to send the goods from three options.
The first option, says the paper, is to send the goods
directly. There is also the multi-stop or “peddling” option,
with the vehicle carrying the goods stopping on the way to
complete the load or unload parts of it to various delivery
points. Using load-transfer centres, or hubs, is the third
option being offered by the system. These storage hubs have
unloading bays, where the delivery vehicles can stop and the
goods are taken out, redistributed and loaded onto other
vehicles at loading bays.
This illustrates the correlation between the cost of handling
goods and the capacity of vehicles, says the paper, authored
by Miquel Àngel Estrada. The vans, which fill up quickly, are
the better option to transport small packages when handling
costs are high while large trucks should be used when
handling costs are low. In cases where the vehicles are fully
loaded, the costs are reduced by seven per cent compared
with the solutions offered by other heuristic methods. In
fractioned loads, the savings may reach over 12%.
“The methodology and the algorithms used to solve the
problems are designed for delivery companies,” says Àngel,
who was awarded the fifth Abertis prize for Research on
Transport Infrastructure Management by the Abertis Chair
at the Universitat Politècnica de Catalunya (UPC). “But they
could be applied to air, sea and urban transport networks
with multiple points of origin and destinations.”
Àngel has fully earned a Ph D in Civil Engineering at
UPC and won a 6,000-euro cash prize and the publication
of his work out of his dissertation. He is a professor at the
same university and a research scientist at the Transport
Innovation Centre, which is run jointly by UPC and the
government of Catalonia.
Stressing that planning and operating a delivery network
is a serious problem for companies engaged in logistics,
he says: “My reason [in choosing this subject for research]
was based on the companies’ need and the lack of scientific
contributions.”
(Above) A van, which fills up quickly, is ideal for transporting small packages when handling costs are high; (Right) Using a large truck to transport goods is the
best option when handling costs are low
March 2009 The supply chain and logistics link 27

The Industry
Increased investments in South america provide more routeing options for cargoes shipped by sea in most world regions
Paving the way for shippers,
service providers
EXPORTERS and importers shipping cargoes by sea between South
America and Asia, North America, Europe and other regions will have
more routeing options following various investments in the transport
and port infrastructure of South American countries. These will also
improve the multimodal transport links from South America to the
Atlantic (east) and Pacific (west) coasts, as well as develop the flow of
goods within the Latin American region.
“Despite the economic slowdown seen in the US and Europe now
starting to be felt in South America, the investment is expected
to continue,” said UK-based Transport Intelligence (Ti), in a report
posted on its web site in February. It added that new opportunities
have cropped up for both local and international third-party logistics
(3PL) firms, ocean carriers and other transport companies because of
economic growth in Brazil, Argentina, Chile, Ecuador and Peru.
Most of these investments have come from foreign-owned
companies, which put their money in the ports and maritime
sectors on the east and west coasts of South America. “Intermodal
connections between the key cities of Sao Paulo, Rio de Janeiro and
Belo Horizonte have improved significantly in the last three to four
years, as have connections outside that triangle,” said Adriano Garcia,
sales manager of Schenker, a global logistics provider, speaking to Ti.
These cities are in the more developed south of Brazil, the biggest
economy in South America, where investments have increased since
President Lula came to power. Brazil, Argentina and other countries
in the region have also boosted imports and increased the number
of products they export, creating more opportunities for the shipping
and logistics industry in most regions of the world.
The supply chain management and logistics sector in South
America is less developed compared with that in Europe, North
America and Asia, but international logistics firms are expecting more
investments in Brazil’s logistical infrastructure in the coming years.
Schenker and other major logistics providers, such as Expeditors,
Panalpina and Kuehne + Nagel, have, in fact, been increasing their
warehousing and logistics operations in Brazil. Other global 3PLs, such
as DHL, provide contract logistics to major shippers, especially in the
automotive and healthcare industries, in South America.
CMA-CGM, the French container ocean carrier, launched a weekly
container barge service in Brazil in early-February, reducing transit
time and cost when moving cargoes in the north. The move has
also bolstered plans by the Mercosur Atlantic Corridor Consortium
(MACC), an organisation focusing on linking South America’s east
and west coasts, to realise its major plans for bi-oceanic routes and
railway projects.
In many cases, the best option for the link is to use the ports on the
Amazon River to lessen transit time and cost in transporting goods.
The world’s longest inland waterway system, the Amazon runs from
northern Brazil up to northern Peru. The Amazon also offers other
river connections as far inland as Porto Velho, in northwestern Brazil,
which is close to the borders with Bolivia and Peru.
A large part of the Brazilian sea freight export cargoes have
been shipped via the local and state-run ports in the same state as
the cargoes originated, even if there were better options in other
countries, such as Montevideo, Uruguay instead of Buenos Aires,
Argentina.
28
ThE supply chain anD logisTics linK March 2009

Freight Management
Warehousing
Distribution
Projects Management
Container Conversions
P.O. Box 17580 Jebel Ali U.A.E.
Tel.: +971 4 8819600 Fax: +971 4 8817231
e-mail: mfcgroup@mfc.ae
web: www.modernfreightco.com
"PURE Logistics
PURE Power"

Fund Folio
{ Corporate finance }
Debt
challenge
The Gulf’s credit quality
declines as SWFs shun bailouts
of distressed companies
COMPANIES in the Gulf Arab states are seen
to accept a more expensive funding in
exchange for better long-term liquidity, as
they will struggle to refinance maturing debt
instruments, and the state-owned investment
funds remain to be passive long-term investors. This will
not change the rating activity for companies while the
world’s sovereign wealth funds (SWFs) wait for better value
later in the year before making new investments.
“In turn, we see new rating activity remaining steady
with greater need for differentiation of credit risk, and
in line with companies’ attempts to lock in liquidity as
it becomes available,” said Moody’s Investors Service in
a corporate finance outlook. The global rating agency
also described the overall credit quality in the Gulf
Co-operation Council (GCC) as having “declined”, and said
this is “likely to continue to do so going forward”.
The SWFs, according to the Financial Dynamics
International, are interested to acquire minority stakes
in listed companies without playing any management
role. While they see Brazil, China and some countries
in Central America as the most attractive regions for
investments, the SWFs are likely to divert cash inflows
from their global portfolios towards their home countries
and regions, in order to add stability and economic
stimulus to the local markets.
POOR CREDIT
About $40 billion worth of debt instruments will mature
in the GCC this year, giving a “significant challenge” to
businesses. The UAE accounts for $20 billion, including
the $15 billion for Dubai, of the total amount. Since
access to equity markets dried up last year, the bulk
of corporate fund-raising in the UAE used syndicated
< An aerial shot of Rio de Janeiro: Brazil is one of the most attractive
countries for investments
March 2009 The supply chain and logistics link 31

Fund Folio
SWFs are waiting for the market to hit bottom before making new investments
bank financing, whose volumes
rose to about $115 billion from $50
billion in 2007, Moody’s said.
The decline in credit quality was largely
due to global pressure on key markets,
particularly real-estate and regional stock
markets. “As the year 2008 progressed, the
financial woes of the world reached the
shores of the Gulf, resulting in a severe
slowdown of core real-estate markets as
financing and liquidity dried up,” Moody’s
stressed.
The drop in oil prices to $40 a barrel
from over $147 in July also had an impact
on liquidity. Moody’s said it expects oil in
the region to have an average price of $50
a barrel for 2009. It added that the GCC
budgets, however, will withstand lower
oil export receipts. “Government balance
sheets have remained only moderately
affected by lower oil prices, given the
substantial liquidity most have amassed
in their sovereign wealth funds over the
past years,” it stressed.
NEGATIVE RATINGS
Moody’s, which has already made negative
ratings on many GCC companies, said the
baseline credit assessments in the region
are likely to be tested in the downturn.
These assessments are the measure of a
company’s creditworthiness, excluding
exceptional government support.
Given the region’s high proportion of
government-backed entities, however,
the link to sovereign credit quality is
particularly high.
“We expect companies’ business plans
to change substantially, as they adapt
to a new environment,” Moody’s said.
It cited various sectors that have been
adversely affected by the credit crisis,
particularly real estate, trade, tourism
and commodities. “Accordingly, we will
Given the region’s
high proportion
of governmentbacked
entities,
however, the
link to sovereign
credit quality is
particularly high
32
The supply chain and logistics link March 2009

Current 12 months forward PE versus Five-year High | Source: Financial Dynamics
Extent of fall in forward PE from Five-year High | Source: Financial Dynamics
be closely monitoring those companies,
whose ratings and underpinning financial
metrics rely on assumptions that may no
longer be achievable.”
The rating agency assumes that the
Gulf is “highly interventionist” with regard
to the financial health of its flagship
organisations, saying that 94% of all
Moody’s-rated corporate debt in the GCC
is with government-related issuers. The
ratings for these issuers include always
the opinion that government support is
guaranteed in times of crises.
PASSIVE INVESTORS
Aside from the SWFs being passive
long-term investors and wanting to
prioritise investments in their home
economies, the Financial Dynamics (FD)
also said the state-owned funds are
now cautious about supporting further
bailouts of distressed companies. These
funds, however, are set to “re-enter
the global equity markets” soon, said
Charles Watson, the company’s group
chief executive officer. He noted that
“compelling valuation propositions” are
emerging across the North American and
Western European equity markets.
“The bottom has yet to come,” an FD
study released in February quoted one
SWF executive as saying. “We are ready to
re-enter the market in a major way – but
not for several months...” said another.
Some funds have even reduced their
exposure to the equity markets since 18
months ago, FD said in February. It added
that the executives also emphasised the
need to improve corporate governance and
management quality.
A part of FTI Consulting Incorporation,
a global corporate communications
consultancy, FD conducted one-on-one
interviews with senior executives from a
number of the world’s SWFs, whose total
assets accounted for over 50% of the
$5-trillion worth of collective global funds
held by the SWF asset class.
Released in February, the findings
also showed the majority of the funds
not wanting to have majority stakes in
companies or make 100% acquisitions.
“We are increasingly interested in seeing
how it might be possible to secure a
cheap entry into an investment either by
buying the debt or structuring some form
of convertible instrument,” said an SWF
executive, “but our intention in doing so
is purely to create value, not to seek any
form of control.”
PROMISING REGIONS
Asia and South America, especially Brazil,
are the two regions which the SWFs
found to be the most attractive, both for
qualitative and quantitative reasons. By
measuring the current price-to-earnings
(P/E) ratios of the top 800 companies in
major markets worldwide, and comparing
these valuations to market highs, FD
found the “deepest value” in North
America and Western Europe. The P/E ratio
is a measure of the price paid for a share
vis-à-vis the annual profit earned by the
firm per share.
The biggest PE discount relative to
five-year market high is found in North
America at over -48% and about -47% in
Asia-Pacific. Companies in the Asia-Pacific
fell to 13.2% from a high of 25.1%, FD said,
but the market is still expensive, owing
to the belief that the region promises
strong economic fundamentals. It added
that various industries, such as media
and entertainment, mining and steel and
other metals are showing the largest topto-bottom
falls across all regions.
Despite the current market conditions,
FD said, Western Europe and North
America were named the best investment
regions in financial terms. “Although the
data revealed Asia to have one of the
two deepest discount areas alongside
North America,” it added, “its actual P/E
is the highest, and, therefore ... the most
expensive option currently for investors.”
The rating agency
assumes that the
Gulf is “highly
interventionist”
with regard to the
financial health
of its flagship
organisations,
saying that 94%
of all Moody’srated
corporate
debt in the GCC is
with governmentrelated
issuers. The
ratings for these
issuers include
always the opinion
that government
support is
guaranteed in times
of crises
March 2009 The supply chain and logistics link 33

Focus
{ Markets }
Taking
stock of
assetlight
strategy
Trading in shipping
shares appears bleak on
slowing demand and
new ships
REMAINING “asset light”, Aramex has begun to
perform well on the Dubai Financial Market
(DFM) this year. The stock surged 21% to
Dh1.05 in the year-to-date, according to the
February issue of a regional monthly study by
EFG-Hermes. “We believe the company will continue to
take market share, particularly in a tighter market, as it
dominates the smaller players that make up a significant
proportion of the logistics market in the Middle East,”
the study said in its January issue. “The company
remains asset light, and thus more flexible than some of
its global competitors in terms of operational leverage.”
Middle East’s Aramex, a logistics and transportation
solutions provider, has won major logistics contracts
since it started diversifying its offerings
through products and services in 2007. It
< An investment bank compares key stocks, including logistics and
aviation, with their emerging market peers
March 2009 The supply chain and logistics link 35

Focus
expanded operations in the Middle
East by making key infrastructure
investments, and made strategic
acquisitions in Singapore and Indonesia
to reach a wider market in emerging
economies. It grew in size, reach, capacity
and reputation – which it has since
continued to build on – by advocating
the asset-light strategy, or capitalising on
outsourcing trends across the region.
The company was cited in ‘logistics’, a
sub-sector under the ‘industrials’ sector
in a January study, released in February,
by Egypt’s EFG-Hermes, one of the leading
investment banks in the Middle East
and North Africa (MENA). It said Aramex
shares were trading in the middle
range of the sub-sector at 6.4 times the
estimated price-to-earnings (P/E) ratio for
2009, but the growth outlook was above
the sector average, with an EPS (earnings
per share) compound average growth rate
(CAGR) of 16% over the period 2008-2010.
In the industrials’ aviation sub-sector,
Air Arabia shares were cited as trading
at 7.7 times the 2009 estimated P/E ratio,
which is a measure of the price paid for
a share against the annual profit earned
by the firm for every share. The January
study cited Kuwaiti-based Jazeera Airways
as having performed below the sector
median of 9.8 times, with shares trading
at 8.2 times the 2009 P/E estimates. Most
companies in the sector suffered from
low or negative earnings in most parts of
2008, owing to high oil prices.
“However, both Air Arabia and Jazeera
managed to pass on this increase in fuel
prices to customers in the form of fuel
surcharges, which explains their lower
valuations compared to the sector,” the
study said. “Jazeera looks more attractive
from a growth prospective with an EPS
CAGR of 112% for 2008e-2010e, albeit
from a low base,” it added. It stressed that
the forecast for Air Arabia did not include
the second hub in Rabat, Morocco and a
third one either in Egypt or the Levant
region, which includes Lebanon, Jordan
and Syria.
‘BLEAK’ OUTLOOK
In the February study, released early
this month, Air Arabia, a budget airline
based in the UAE emirate of Sharjah,
was mentioned as one of the lowest
performers on DFM in the year-to-date,
dropping 57% to Dh0.96. Gulf Navigation,
a provider of pipeline, shipping and
seaport services, was the worst performer
with a fall of 96% to Dh0.55. Describing
the industrials’ shipping sub-sector as
having “weakened significantly in recent
months”, EFG-Hermes said in its January
study that the 2009 outlook “appears
bleak”, owing to slowing demand and
the influx of new ships. “Consequently, it
would not be surprising to see the sector
trading on single-digit P/E ratios for the
next three years,” it added.
The logistics industry was one of the
key stocks compared by EFG-Hermes
with their emerging market peers in the
January study, considering P/E ratios and
earnings growth, as well as net debt-to-
EBITDA (earnings before taxes, interest,
depreciation and amortisation), priceto-book
(P/B) ratio and EV (enterprise
value)/EBITDA “where appropriate”. P/B
is a financial ratio used to compare a
company’s book value – tangible assets
of a firm minus its liabilities – to its
current market price while the EV/
EBITDA ratio is applied when valuing
The aviation sector suffers from low or negative earnings in 2008, owing to high oil prices
36
The supply chain and logistics link March 2009

cash-based businesses.
The study described the UAE stocks,
particularly banks and construction,
as “weak”, owing to the collapse of the
real-estate market. “Morocco remains
expensive due to capital controls, though
less so than in 2008,” said the January
study. “Saudi equities continue to be a
little more expensive than most MENA
peers, due to their relatively more
defensive properties.”
The fourth quarter of 2008 saw the
98% year-on-year drop in earnings of
UAE companies, mainly due to falls
in financial and real-estate revenues.
Reporting an earnings contraction of
98% year-on-year, the financial sector
blamed it mainly on provisions and
impairment within the Dubai banks.
The real-estate sector reported net losses
for the same quarter, due to Dubailisted
entities. Losses incurred by Emaar
Properties, for instance, reached $481.86
million (Dh1.77bn) on the back of US
write downs.
STOCKS RISE
EFG-Hermes said that DFM rebounded
while the Abu Dhabi Securities Exchange
(ADX) gained ground in February.
The DFM General Index gained 2.5%
to 1,558.98 points last month, with
the market advancing for 10 sessions
and declining for nine, as the Dubai
government announced it would launch
a $20-billion bond programme as part
of a long-term financing plan. Abu
Dhabi’s general benchmark jumped 5.3%
to 2,376.5 points last month, with the
average daily turnover rising 13% monthon-month
to $54.88 million (Dh201.6m).
Saudi Arabia, the biggest Gulf Arab
economy, had a weakened stock exchange
in February, with average daily turnover
declining seven per cent to $1.36 billion
(5.1 billion Saudi rials, or SAR). The
Tadawul All-Share Index (TASI), which
gained 8.8% to 4,384.6, advanced in nine
sessions and fell in 11, with the media
and publishing sector as the only gainer
at two per cent and the petrochemical
industries losing the most at 14%. The
net buyers were resident Arab investors
while Saudi funds and investors in the
Gulf Co-operation Council (GCC) and from
overseas were net sellers.
“King Abdullah reshuffled the cabinet
last month and extended the changes to
other government posts as well,” stressed
EFG-Hermes in its February study. “This
included the appointment of Mohamed
Al Jasser as the new governor of the Saudi
Arabian Monetary Agency.”
‘Aramex will continue to take market share’
Retail investors continued to be
net sellers in Saudi Arabia, it said,
while institutional investors were
the net buyers. It added that the
telecommunications and information
technology sector eased nine per cent
and both multi-investment and realestate
development lost eight per cent.
The Saudi Industrial Export advanced
29% to SAR32.70 while Saudi Telecom,
which lowered the tariffs for incoming
calls and roaming service, dropped 24%
to SAR35.70. The company previously
introduced unified lower roaming tariffs
with about 30 operators worldwide.
OIL-PRICE SCENE
The GCC states, meanwhile, are advised
by EFG-Hermes to re-assess their
investment plans until the global
economy and the oil prices get better.
It warned that a $30-per-barrel oil,
for instance, would mean weaker
government spending over the next few
years. This would be a difficult scenario
for Saudi Arabia and Bahrain, which are
hydrocarbon-poor per capita countries,
while the hydrocarbon-rich states of Abu
Dhabi and Qatar would see the least
need to cut their expenditures.
“Nevertheless, given the necessary
drawdown on reserves, government
spending would have to fall until there
were signs of a sustainable recovery
in the global economy and oil prices
stabilised above $50 per barrel,” it said
in the February study. This would impact
on investment, private consumption and
the short- and long-term changes in the
size and age composition of populations.
“Government investment plans would
have to be re-evaluated, and only the vital
investment programmes would continue,
with even key infrastructure projects
being put on hold,” it added.
Predicting a 70% fall in oil revenue
from 2008 levels for all the GCC countries,
the study said this scenario will “result
in a severe contraction in nominal GDP”.
A gross domestic product figure that
has not been adjusted for inflation, the
nominal GDP of GCC is seen to fall by
36.9% this year. The cuts in oil production
will also result to a stagnant real GDP,
following an average growth of 6.9% the
previous year.
The study expects oil prices to remain
weak between January and June, with
a base scenario of $50 per barrel for
Brent crude, due to slowing demand for
energy and rising production surplus.
A stronger oil price is expected by the
second half of the year, as production
cuts by the Organisation of the
Petroleum Exporting Countries, which
cut oil productions quotas by 4.2 million
barrels per day as at end-2008, will be
felt across the market.
March 2009 The supply chain and logistics link 37

Cover Story
{ Economy }
Growth
engine
Dubai creates forums
for the further
development of the
logistics industry
THE LOGISTICS sector indeed plays an important
role in economic growth, with the Dubai
government pushing for closer interactions
with the private sector on how to develop
the industry further. It is one of the key
sectors – along with the various services in transport,
construction and financial and professional – which the
Dubai Department of Economic Development (DED) has
identified as engines of growth.
Stressing that the department formulates policies in
line with the government’s vision to diversify its income
sources, Khalid Al Kassim, DED deputy director-general
for Planning and Development, says: “DED continues to
focus on developing the emirate’s most dynamic economic
sectors that have been the key contributors to Dubai’s
growth. The logistics sector is a key component in our
growth model.”
TRADE HUB
With its logistics market growing over 20% annually,
Dubai is driving the industry growth by the establishment
of the Dubai Logistics City (DLC), according to the Dubai
Chamber of Commerce and Industry. A part of the
government-owned Dubai World Central, DLC is
designed to provide investment opportunities for
Dubai’s logistics market grows over 20%
annually / Rey Delante
March 2009 The supply chain and logistics link 39

Cover Story
DED has identified the logistics sector as a key component
for D
Dubai is a regional centre for re-export, retail, leisure, aviation, IT and banking / Photo by Rey Delante
global companies, and will be operational
by mid-2009.
The DLC is also designed to handle
12 million tonnes of air cargo annually
in up to 16 air cargo terminals, as it
is strategically located alongside the
new Al Maktoum International Airport
and adjacent to the Jebel Ali Port and
Free Zone. It also has its own aviation
area, a cluster for specialised aviation
industry suppliers offering warehousing
and cargo handling facilities. A labour
village spread across 350,000 square
metres will be able to accommodate up
to 40,000 workers.
As a regional centre for re-export, retail,
leisure, aviation, IT and banking, Dubai
has more than 60% of the Middle East’s
imports transiting its borders. About
3,000 active members of Dubai Chamber
are into cargo handling, storage and
warehousing and other auxiliary services.
The emirate’s Cargo Village, which has
been operational since 1991, services the
cargo handling requirements of the Dubai
International Airport.
SECTORAL FORUMS
The public-private partnership via a
series of forums, Al Kassim stresses,
serves as an incubator of ideas,
technologies and innovation which
will help the further development
of the industry. DED has recently
signed, for instance, a memorandum
of understanding with DHL Exel
Supply Chain, with an aim to having
a “pre-eminent platform” to help the
industry grow. This combines Dubai’s
commitment for economic growth and
the expertise of the global logistics
contractor.
The series of dialogues between
the public and private sectors in
the logistics industry, which DED
has organised, is designed to serve
as a venue where both parties can
communicate their various concerns.
“The logistics sector forums play a key
role in aligning the interests of the
government and the private sector,
and will assist in the development of
both tactical and strategic initiatives
to further strengthen logistics in the
region,” Al Kassim says. “They also
40
The supply chain and logistics link March 2009

nent
for Dubai’s growth model
(Top): The DED building; (Above): DED’s business registration office
serve as effective platforms to collect
feedback of various stakeholders to our
activities, and to understand the issues
they are facing and, ultimately, to assist
them with policy development, if and
where needed.”
Combining a number of solutions
designed to enhance Dubai’s master-plan
for its logistics sector, the partnership is
also envisioned to support the growth
of other sectors in the UAE and the
whole Gulf region. Seen to deliver value
by 2010, the initiatives involved are the
development of a technology that reduces
carbon emissions within the logistics
sector, the reduction of port congestion
and the ways to develop the small- and
medium-sized enterprises (SMEs) in the
manufacturing sector.
EXPORTS SUPPORT
The manufacturing sector is a major
concern also of Dubai’s Export
Development Corporation (EDC), an
autonomous organisation tasked by the
government to facilitate the creation of
an enabling environment for exports.
Created in 2006, EDC’s mandate also
involves enhancing the competitiveness
of Dubai as a preferred trading partner to
important economies worldwide.
The organisation is now on the
advanced stage of implementing some
of the tasks comprising its five-year goal,
says Engr Saed Al Awadi, chief executive
officer of EDC. Since last year, the EDC
has been participating in various local,
regional and international exhibitions and
conferences to promote Dubai exports to
various markets. It has also created a web
site, whose hard copy will be out in May,
containing comprehensive information for
both exporters and buyers.
Another task being done by the EDC to
support exporters is the publication of a
series of booklets containing information
on the various sectors, such as food and
plastic, in the manufacturing industry.
Al Awadi describes the plastic trade as
a “thriving industry”, which posted a
compound annual growth rate of 13% in
quantity between 2004 and 2007 while
re-exports and imports registered growth
rates of 10% and 18%, respectively. This
shows a “healthy promising sector”,
according to an EDC study.
Since last year,
the EDC has been
participating in
various local,
regional and
international
exhibitions and
conferences to
promote Dubai
exports to various
markets
March 2009 The supply chain and logistics link 41

Cover Story
Khalid Al Kassim
TRIMMED PROCESS
One of the first steps that DED has
taken to help promote the role of the
private sector in the logistics and other
industries is to make the process of
business registration easier, Al Kassim
says. His office co-operates with other
government departments on this matter,
saying that if all the necessary papers
for a proposed business are done, that
office may start operating in Dubai
within hours.
During the first two weeks of this
year, DED issued 429 new business
licences which, he says, highlighted
the strong fundamentals of the Dubai
economy. He cites the city’s pro-business
environment, strategic location, good
governance and transparency, worldclass
infrastructure and good quality
of life as “strong attractions” for
various investments. “Investors seek
out these strengths and the unique
value proposition that Dubai offers, and
this is reflected in the levels of new
business registrations,” he says.
Commercial licences make up about
80% of the new licences issued during
these two weeks as well as the last quarter
of 2008. “A commercial licence has always
been one of the most sought-after, as it
covers a gamut of business endeavours,”
Al Kassim says. He adds that professional
licences, especially those associated with
services, account for 17-20%, while the
rest are accounted for by tourism and
industrial licences.
Noting that Dubai has positioned
itself as a world-class regional hub for
trade, logistics, tourism, IT and finance,
Al Kassim says this enhances investor
confidence and attracts more foreign
investments – a trend that is seen to
continue. “DED takes into account global
trends, and is continuously launching new
services and initiatives,” he adds, “with
the objective of attracting international
companies to set up their regional base in
Dubai and, thus, contribute to achieving
higher economic growth.”
DED has unveiled nine electronic
services on its web site – www.dubaided.
gov.ae – for a more efficient operation
and enhanced productivity. These
eServices highlight the department’s
technology-driven initiatives, Al Kassim
says, ensuring that clients benefit from
value-added services Being the most
competitive economic hubs in the Middle
East and North Africa region, Dubai has
flexible labour markets, state-of-the-art
infrastructure and increasingly efficient
business processes.
“We are confident that the quality of
our foundation will hold the emirate
and country, and will help us retain
our competitive edge,” he adds. DED,
which is at the forefront of policy
recommendations to strengthen the
economy, suggested recently a monthly
rental payment in place of the one- or
two-cheque policy being adhered to by
most landlords. This would help take the
financial institutions and individuals away
from credit exposure, especially now that
lending facilities are tight.
CREDIT INSURANCE
With regard to the scarcity of credit
facilities for businesses, the EDC has
devised a way to help SMEs and exporters
in various industries by allowing them
to insure their transactions with credit
insurance offices. The service, offered
through the Export Credit Insurance
of the Emirates, a company under EDC,
ensures payment for an exporter’s
delivered products should the buyer in
the Gulf or overseas renege on its trade
obligations.
Through this credit insurance service,
exporters are guaranteed payment within
90 days if buyers fail to send the money
42
The supply chain and logistics link March 2009

for purchased goods. EDC would pay
exporters 20% of the goods that had
been delivered while a reinsurance firm
it had commissioned would foot the
remaining 80%. It has arrangements on
this with some regional and international
insurance firms, including the Parisbased
Compagnie Francais d’Assurance
pour le Commerce Exterieur, also known
as COFACE, the Islamic Corporation
for the Insurance of Investment and
Export Credit, based in Saudi Arabia, and
Kuwait’s Inter-Arab Investment Guarantee
Corporation.
It was reported earlier that exporters
could avail of this insurance service by
providing a premium of between 0.1%
and one per cent for a period of one year.
This could grow up to 2.5%, depending
on the commercial and political risks in
the country of destination. Credit risk
is the biggest risk-management concern
for SMEs, Al Awadi says, adding that
the process for credit insurance may
take some days, as the EDC works with
teams and some organisations here and
abroad to evaluate the buyers in different
countries and regions.
“Our credit insurance service will give
companies more confidence to export their
products to other countries,” he says. EDC
maintains a database of over 50 million
companies and institutions worldwide,
and has created teams and organisational
links with other groups to help it assess
the creditworthiness of buyers and collect
outstanding debts. Its other tasks include
providing legal and regulatory advice on
quality audits, trade policies and free-trade
agreements to exporters.
GROWTH INITIATIVES
Governments in Dubai and the whole
UAE have also taken several measures to
help industries cope with tight lending
facilities brought about by the global
financial meltdown by boosting liquidity
in the banking sector. The UAE Central
Bank injected $32.67 billion (Dh120bn)
into the financial sector and also
guaranteed commercial bank deposits for
three years, which show the “strength and
confidence of the leadership in guiding
the economy”, Al Kassim says.
He also describes as a “significant
initiative” the $20-billion bond
programme that the Dubai government
launched recently, a move reiterating
the ability of the emirate to ride out the
financial crisis, which stemmed from the
risky subprime mortgage industry in the
US. “This is a clear signal to the global
financial community that the federal
UAE Minister of Foreign Trade Sheikha Lubna Al Qasimi and Al Awadi attending a trade exhibition
Al Awadi and Peter Linford, senior trade commissioner for South Asia at the Australian Trade
Commission, in Dubai
structure of the UAE,” he says, “has the
resources to ensure the long-term stability
and to overcome the unprecedented
challenges experienced by the global
financial sector.”
Dubai’s strategy for economic growth
is also fast-shaping up, following the
consolidation of four key agencies under
the DED directive. These include the
Foreign Investment Office, Dubai Shopping
Festival, EDC and the Sheikh Mohammed
Establishment for Young Business Leaders.
The group’s executive committee, headed
by Sami Al Qamzi, director-general of DED,
is tasked to identify the challenges facing
the economy and formulate guidelines on
how to deal with them.
This development “marks the evolution of
a strong, centralised organisation that will
play an instrumental role in shaping the
growth dynamic of the emirate”, Al Kassim
says. He also cites the need for stronger
corporate governance and transparency
measures amidst the global credit crisis,
although the UAE has already started going
in this direction which helped its economy
to be resilient. “The authorities will now
lay more stress on financial regulations,”
he adds, “and to develop an early-warning
monitoring of the economy.”
March 2009 The supply chain and logistics link 43

The Gulf
{ High growth }
Investment
areas
Projects in GCC’s
marine, F&B, agri and
mining sectors offer
good returns
TRADITIONAL economic projects in the Gulf
Co-operation Council (GCC) have good chances
of becoming successful, owing to a number of
factors, including political stability, advanced
infrastructure and agreements against double
taxation. The Arabian Gulf, Arab Sea and Red Sea,
for instance, provide the GCC states with a good sea
environment for the various sectors that depend on fishing
and fish canning business. A recent study done by the GCC
General Secretariat said that Oman’s success in exporting
part of its fish reserves to Western Europe is evidence of
the sector’s business profitability.
Aside from marine projects, the other traditional
business ventures include those on food and beverage
(F&B), agriculture and mining, according to the
“Components and tools of investment in GCC memberstates”,
a research note compiled by Najib Abdullah Al
Shamsi, director for Research and Studies at the GCC
General Secretariat. The success of investments in these
fields also depends on the GCC states’ flexible economic
policies, encouraging legislative and legal environment, free
zones and increasing privatisations.
LOW DEMAND
The UAE’s strong financial position, for instance, will prevent
the country from sliding into a recession, despite the recent
collapse in oil prices and lower crude output as demand for
energy slumps. The Saudi American Bank (SAMBA) stressed in
a research note that the UAE authorities’ “quick” response to
the global liquidity crunch was to inject more money into the
financial system. “Together with fiscal stimulus packages, this
should prevent the country from slipping into outright
recession,” said the 22-page study.
In Media City, Dubai: The UAE won’t slide into a recession,
owing to its strong financial position
March 2009 The supply chain and logistics link 45

The Gulf
The GCC has a good sea environment for marine projects
While the country’s foreign
assets might have suffered
from global market pressure, SAMBA
said, still these could cushion any
adverse impact on the economy.
It added that inflation in the UAE
may drop to four per cent this year,
following a record-high of 14% in
2008. A broader economic activity will
be curtailed, however, due to slowing
credit growth as banks have tightened
lending rules, and despite forecast
spending increases of 21% and 42%
in the respective budget of the federal
government and Dubai.
“Although prospects are challenging,
the UAE is well-equipped to weather
the global downturn,” the study said,
stressing that the country has large
foreign assets to draw on, although
these, too, have been affected by the
collapse in asset prices worldwide. It
added that the growth in the country’s
gross domestic product will drop to
less than one per cent this year.
HIGH RETUrNS
The petroleum and gas, tourism and
services industries in the Gulf are
likewise mentioned in the GCC study
as having tremendous opportunities.
Having 45% of the world’s oil reserves
and 24% of gas reserves, the Gulf
Arab states are excellent areas for
investments in oil exploration,
refinery and distribution. Moreover,
the region has plans to allow privatesector
investments in the production
and service sectors of the petroleum
industry.
The high returns that these sectors
promise to investors are supported
by the growing GDP, or the sum of
products and services produced in
an economy in a given period, and
the increasing population that brings
the demand for commodities and
services, the study said. Over the past
five years, it noted, governments in
the GCC bloc also created economic
policies in tune with global trends,
including providing foreign investors
the same opportunities as their local
counterparts.
The GCC states’ combined GDP rose
6.4% in 2007, based on estimates by
the International Monetary Fund.
The GDP rose by 6.8% in 2005 after a
The Gulf region’s fertile agricultural lands promise good profits
for various projects, including fruits and vegetables
46
The supply chain and logistics link March 2009

periods for loan repayments. It also
stressed that the region adheres to a
monetary policy of allowing investors
here to transfer their profits outside
the region in whatever fashion they
want.
Traditional business ventures, such as those in the food and beverage sector, can expect high returns
2.5% rise in 2002 from 1998, Al Shamsi’s
study said. This was due to high oil export
receipts, the development of other sectors
– particularly real estate and financial
services – and government spending on
various infrastructure projects. The GCC’s
balance-of-payments, the IMF said, was set
to reach $210 billion by end-2008 from
$170 billion in 2005.
This means that the GCC members
will “attract more foreign capital and
investments” over the coming period, the
GCC study said, despite the ongoing global
financial meltdown brought about by
the credit crisis in the US. It added that
the Gulf region will be among the most
important areas for foreign investments,
especially now that all GCC members have
joined the World Trade Organisation, the
world body that helps facilitate free trade
among members.
Known for its fertile agricultural
lands, the GCC also offers high returns
for investments in such products as
fruits, vegetables, dairy, chicken and
meat, especially in the UAE, Oman and
Saudi Arabia. The region’s services sector
is another area where investors can
expect good profits, as the GCC offers
good services in telecommunications, IT,
education and health.
Noting the region’s sound credit
policies, the GCC study also said that
commercial banks are able to support
various development projects, mostly by
the private sector, which has access to
competitive interest rates and flexible
Inflation rate in the UAE will drop sharply this year
from 14% in 2008
Like the GCC study,
SAMBA also
forecast a sharp
decline in UAE’s
inflation rate for
this year
MASSIVE ASSETS
Massive assets in the UAE, meanwhile,
allowed the country to retain its large
net external creditor position when there
was a rise in borrowing, SAMBA said. The
country’s total external debt was put at
$150 billion as at end-2008, or equivalent
to 55% of its GDP. Based on conservative
estimates of the UAE’s total foreign assets
of $405 billion, plus the estimated assets
of the Abu Dhabi Investment Authority
(ADIA), the country has a positive net
external asset position of $225 billion, or
93% of GDP.
“Of course, the position could be
considerably larger, depending on the
true level of ADIA’s assets,” SAMBA said.
“Whatever the real figure, it is clear
that the UAE has considerable assets to
cushion the economy from the global
recession.” The UAE’s foreign assets are
composed of official reserves, bank
foreign assets and estimated ADIA’s assets.
The authority has under its management
total assets of between $300 billion and
$865 billion, 50% of which are invested in
equities, 20% in fixed income, 10% in real
estate and 20% in cash, hedge funds and
strategic investments.
Like the GCC study, SAMBA also forecast
a sharp decline in UAE’s inflation rate for
this year, after shooting up to 14% in 2008
from 11% in 1007, owing to a stronger
dollar, a drop in commodity prices and
weaker domestic demand. It described
these levels as being “underestimated”,
however, saying that real inflation rate
last year could be close to 20%, based on
prices paid by UAE nationals, who benefit
from government subsidies and rent
control not extended to expatriates.
It also noted that interbank rates
have remained high and banks started
to raise rates paid on deposits, despite
the UAE having loose monetary policies.
These increases will be passed on
to borrowers and to the anticipated
slowdown in credit growth, thereby
easing inflationary pressure. The other
factors that would contribute to lower
inflation in the UAE this year – which is
seen to slow to around four per cent –
include the easing of supply bottlenecks
and capacity constraints as projects are
completed, cancelled or postponed and
lower rental fees.
March 2009 The supply chain and logistics link 47

MENA Region
{ Economy }
Dealing
with risks
Falling demand for
exports and lower oil
prices are putting the
region to the test
THE TRANSPORTATION and storage sectors
are among those that benefited from the
investment drive in Qatar and Saudi Arabia,
which are seen to continue with their
investment programmes amidst the global
credit crisis. The retail sector in the UAE, on the other
hand, will be affected by the slump in the construction
and real-estate industry, according to a research study,
dated March 8, by EFG-Hermes. It also said that Morocco
will have the strongest growth in 2009 compared with the
other non-oil producing countries in the Middle East and
North Africa (MENA).
Countries in the whole region will not experience a
crisis in their balance-of-payments (BOP), which measures
the payments that flow between an economy and all other
economies, as reserve positions will be enough to meet
external obligations and BOP deficits. The study cited
Jordan and Lebanon, however, as the most vulnerable,
since they depend mainly on external economic
developments for growth. It also said that concerns over
Dubai’s ability to meet its debt obligations have been
allayed following the UAE Central Bank’s announcement of
a $20-billion five-year sovereign bond issue.
SAUDI ARABIA AND QATAR
EFG-Hermes, a major player in the region’s investment
banking, said it is “most positive” on the economies of
Qatar and Saudi Arabia. “We believe these two countries
will realise the greatest momentum in their economic
investment programmes, although the rate of growth
will decelerate.” While it expects the credit crisis to
create some restrain in the transportation and storage
businesses in these countries, the Egyptian-based
company said the growth of these sectors will
Sunset in Marrakesh: Morocco’s growth will be the strongest among
MENA’s non-oil producing countries
March 2009 The supply chain and logistics link 49

A slump in the UAE’s real-estate sector will impact the retail industry
“remain solid” compared with the other
sectors in the MENA region.
The fiscal and current accounts of
Saudi Arabia, the biggest Gulf Arab
economy, will fall into deficits this year
on the back of a 50% drop in oil revenue,
according to “MENA Economics: Not
immune but coping”, a research study
done by EFG-Hermes. In an attempt
to support the oil price over a slowing
demand for energy worldwide, the world’s
biggest producer of oil will have the
greatest fall in production this year. The
country’s 12.4% cut in oil production level
this year will result to an estimated 1.4%
contraction in its real GDP, a measure of
the size of an economy adjusted for price
changes and inflation.
The country remains one of the
strongest economies worldwide to weather
the credit crisis, however, as it has massive
foreign assets to compensate for the
loss of foreign funding. Riyadh needs to
continue its investment programme that
supports the non-oil sectors. Expansionary
spending by the government will fuel
the economy and result to more funds
entering the country, despite a forecast
significant drop in oil export receipts. Its
actual expenditure will rise by 11.5% this
year over the 2008 spending levels, with
focus on education and healthcare and
infrastructure.
“We believe the focus of the budget
is positive, given the global economic
slowdown and the medium-term
challenges for the Saudi Arabian economy,
notably the need to upgrade infrastructura
and create jobs,” the 64-page study said.
The budget must have been based on an
average oil price of $40-45 per barrel of
Brent crude, with a production capacity of
eight million barrels per day. EFG-Hermes
has a higher forecast for this year at $50 a
barrel for Brent.
Saudi Arabia’s fiscal balance is seen
to drop this year, for the first time since
2002, with a deficit of $14.3 billion, or
equivalent to 4.2% of GDP (gross domestic
product), which is the sum of products
and services produced in an economy
in a given period. But this will again
hit a surplus by 2010, the EFG-Hermes
study said, on increased oil revenues. It
stressed that foreign assets held at the
Saudi Arabian Monetary Agency (SAMA),
the country’s central bank, stood at $449
billion as at December 2008, or 96% of last
year’s GDP.
Qatar is also poised to ride out the
credit crisis, the study said, and will post
a real GDP growth of nine per cent this
year, the highest in the MENA region. The
country has one of the best economic
fundamentals regionally and globally,
owing to its oncoming five-year production
capacities of liquefied natural gas (LNG). It
will add 31.2 million tonnes per annum of
LNG capacity this year, as QatarGas Trains
4 and 5 and RasGAs Trains 6 and 7 become
operational.
The growth it experienced between
2002 and 2007 and its accumulated wealth
assure Qatar of further growth in the
coming years. “The government is finally
starting to reap the fruit of its hefty
investments over the years, particularly in
the LNG sector,” the study said. The sector
accounted for 32% of the country’s GDP in
the third quarter of 2008, making it the
largest single contributor, surpassing the
oil sector.
“Qatar is in a better position to
continue with its domestic investment
programme ... than other GCC [Gulf
Co-operation Council] countries,”
the study said. The country will
also experience a continued rise in
population, which saw a compound
average growth rate of 13% to 1.56
million over a 10-year period to January,
due to increased government spending.
This will accommodate the influx of
foreign labour and other expatriates,
who will spur domestic demand and fuel
economic growth.
50
The supply chain and logistics link March 2009

a vital need for the continuation of the investment programme, both to upgrade infrastructure and
increase the productive base. This should be supportive of non-oil activity, which although moderating will
remain solid. Sound monetary management has meant that banks are not overstretched and are in a good
position to continue to lend.
Figure 84: Government Spending to Remain
Expansionary
SAR billion, unless otherwise stated
MENA Region
Figure 85: Drivers of Real GDP Growth
%, unless otherwise stated
700
600
500
400
300
200
100
0
Capital Expenditure
Current Expenditure
7%
6%
5%
4%
3%
2%
1%
0%
-1%
-2%
Non Oil GDP
Overall GDP
2003
2004
2005
2006
2007
2008e
2009f
2010f
2006
2007
2008e
2009f
2010f
Government spending in Saudi Arabia to remain expansionary
Source: SAMA and EFG-Hermes Estimates
SAR billion, unless otherwise stated | Source: SAMA and EFG-Hermes Estimates
Drivers of real GDP growth
% unless otherwise stated | Source: SAMA and EFG-Hermes Estimates
Source: SAMA and EFG-Hermes Estimates
mulus as
nsionary
en the FX
position
UAE AND KUWAIT
The EFG-Hermes study said the correction
in the UAE’s real-estate sector will result
to a drop in its population, and impact
the performance of the retail, banking
and telecommunications sectors. These
are some of the structural issues that
have been exposed due to the credit
crisis, resulting in weaker outlooks for
the UAE and Kuwait. These countries may
have strong ability to continue spending
to support growth, the study said, but
added that the structural issues need to
be corrected.
“The outlook for the UAE has
deteriorated markedly as a result of the
global credit crisis, which has brought to
the fore structural problems in Dubai,”
it added. While the country has enough
reserves for government spending, there
will be a deceleration in domestic demand
as a number of property projects are
being cancelled and financing dries up.
Aside from having a non-oil sector that is
dependent on exports, thus vulnerable to
the global crisis, the UAE also has a sharp
fall in oil production.
The outlook for Kuwait remains
negative, despite its slow increase in
government spending and substantial
reserves, as it deals with the debt of the
local investment companies and the
crisis between the government and the
parliament. It will have this year’s biggest
contraction in real GDP at 2.2% among the
GCC countries, the study said, compared
with the UAE’s marginal 0.04%, owing to a
drop in domestic demand and contraction
in net exports. This shows Kuwait’s greater
dependence on the oil sector, which will
have lower production levels this year.
The erosion of wealth was greater in
Kuwait than in any other GCC countries,
owing to increased spending and credit
growth in the Kuwaiti banking system,
which lent mainly to the investment
institutions that make up more than half
of the country’s listed companies. “These
institutions have incurred substantial
losses with the collapse in global asset
prices, and some have defaulted on loans,
as credit facilities have become difficult to
obtain with the removal of financing from
foreign banks,” the study stressed.
MOROCCO AND EGYPT
With last year’s limited inflation and
the fiscal consolidation for 10 years,
the Moroccan government is capable of
increased spending this year, although its
external position will weaken greatly. The
country is highly depending on Europe for
remittances, foreign direct investments
(FDI) and tourism revenue, the study said.
France, Spain and Italy were its sources for
70% of remittances, 54% of exports, 56%
of FDI inflows and 53% of tourist arrivals
in 2007.
The study also expects Morocco’s 2009
exports to decline by 15% year-on-year,
as Europe is experiencing a slump in
demand for consumer and capital goods.
The expected good harvest for 2008 and
2009 and the government’s capacity to
boost fiscal spending, however, will fuel
the country’s growth this year. Agriculture
is a vital sector to the Moroccan economy,
as it employs 40% of the workforce and,
together with the agro-industry, accounts
for 21% of total exports.
“Therefore, growth in agriculture
remains a leading determinant of
economic growth due to its effect on
private consumption as well as economic
production,” the study said, adding that
the harvest is seen to reach 10 million
tonnes this year from five million tonnes
in 2008. In 2007, when the country
suffered from severe drought and
harvested only 2.1 million tonnes, growth
fell to 2.7% from 7.9% the previous year.
A large stimulus package, which
includes investments in infrastructure
and lower personal income taxes, will
also help fuel the economy. This will
increase government spending by 16%
for this year to $15.81 billion (135bn
Moroccan dirhams), or 18% of GDP,
compared with the previous year. The
North African country will spend more
to speed up various projects intended for
agriculture, energy, education, housing and
infrastructure.
A large budget deficit and public debt
in Egypt, meanwhile, will hamper that
country’s ability to embark on a major
stimulus package needed to boost its
economy. Stressing that Egypt’s budget
deficit “remains high relative to regional
peers”, EFG-Hermes said the government’s
increased spending will not be able to
57
compensate for lost investment. While
Cairo announced a $5.5 billion (30bn
Egyptian pounds) stimulus package for
fiscal years 2008-2009 and 2009-2010, the
EFG-Hermes study expects a 50% slump in
FDI inflows.
It stressed that the share of privatesector
investment dropped by 67% for
the fourth quarter of 2008 against total
investments from between July and
September and 75% from a year ago. It
also said that public-sector investment
plans in the previous years were delayed
due to structural problems. It noted: “We,
therefore, expect that the tax and tariff
cuts will have a more immediate impact
on investment than will government-led
expenditure.”
EXPANSIONARY BUDGET TO FOCUS ON CAPITAL EXPENDITURE
The actual amount of funds entering the economy will increase as government spending remains
expansionary and provide a strong stimulus to the economy, even though oil earnings will decline
markedly. We are forecasting an increase in actual expenditure of 11.5% in 2009e over and above actual
2008 spending levels. The budget prioritises capital spending with key areas including social development
(notably education and healthcare) and infrastructure. We believe the focus of the budget is positive given
the global economic slowdown and the medium-term challenges for the Saudi Arabian economy, notably
the need to upgrade infrastructure and create jobs.
Although the budget does not provide oil assumptions, we estimate it is based on an average oil price of
about USD40-45 p/b for Brent crude, with production of around 8.0 million bpd. Our oil price forecast for
2009e is slightly higher at USD50 p/b for Brent. We nevertheless also estimate the fiscal balance will fall
into deficit in 2009e, for the first time since 2002. We are forecasting a fiscal deficit of USD14.3 billion,
equivalent to 4.2% of GDP in 2009e. We estimate the fiscal position will once again realise a surplus in
2010e with oil revenues rising. NFAs held at SAMA stood at USD449 billion in December 2008, equivalent
to 96% of overall 2008 GDP. With the fall in oil prices and government expenditure the NFA position will
deteriorate in 2009e, albeit remaining extremely healthy. Along with foreign assets, net government
March 2009 The supply chain and logistics link 51

Calendar
SCLG-
Endorsed
Events
A barge being loaded on river
Seatrade organising
workboats conference
NOTING a growing demand for sturdy workboats
in the Middle East, event organiser Seatrade
will put up The 2009 Middle East Workboats
Exhibition & Conference, on October 5-7, at the
Abu Dhabi National Exhibition Centre.
The demand for workboats – tugs, ferries and
supply vessels; police, fire, patrol, pilot, rescue
and oil-spill boats; dredgers, barges and floating
cranes – is due to various developments in the
offshore oil and gas sector and maritime and
shoreline projects.
“Shoreline projects are reaching maturity
along the UAE coast, and there is a growing need
for the right type of emergency boats to provide
the sophisticated maritime firefighting and
rescue services expected of modern cities…” said
E+P offers workshops on
warehouse logistics
EHRHARDT + Partner Solutions
(E+P) is offering two one-day
workshops on warehouse
logistics, with focus on the use
of the latest technologies for the
sector, on March 17 and 25, the
company said in a statement.
“The large demand for our
warehouse logistics solutions
as well as our comprehensive
trainings and workshops prove
that our concept corresponds
exactly to the needs of the local
market,” said Hermann Ehrhardt,
managing director of E+P.
Workshops participants
will learn about, among other
things, the different models and
processes of receiving shipments
as well as the consolidation
of ordering and picking of the
goods. They will also learn
how to save costs by investing
in innovative supply-chain
solutions.
Ehrhardt said the workshops
Christopher Hayman, chairman of Seatrade.
He stressed that about 2,000 workboats
are currently being docked or repaired in the
Middle East, which shows a promising growth
for workboats despite the global economic
slowdown.
“Some operators may slow down exploration
and development activity but few are expected
to cut back dramatically,” he said. “In fact, new
vessels to support the offshore industry in the
Gulf continue to be ordered or delivered.”
Hayman added that offshore supply vessels
deliver various goods, from drill pipes to potable
water and oil and gas drilling rigs to platforms at
sea. Shallow water production, such as that in the
Middle East, is the biggest offshore market.
E+P’s solutions answer the needs of
local warehouses
courses will begin with
the basics in logistics and
move to advanced processes,
communicating the needed
knowledge to “optimise these
processes”.
Manufacturing
Excellence Middle
East
March 4-5
Abu Dhabi, UAE
Middle East Industrial
Flooring Conference
March 17
The Courtyard by Marriott
Dubai, UAE
Blue Ocean Strategy
March 22-23
Dubai, UAE
Seventh Intermodal
Africa
March 25-26
Le Meridien President Hotel
Dakar, Senegal
SCM Logistics Middle
East
March 30-April 2
Dubai, UAE
Warehouse
Management Masterclass
for Oil & Gas
April 22-23
The Ritz-Carlton Dubai
Dubai, UAE
Seventh ASEAN Ports
& SHIPPING
June 3-4
Shangri-La Hotel
Jakarta, Indonesia
Fourth Southern Asia
Ports, Logistics and
Shipping
September 24-25
ITC Hotel Park Sheraton &
Towers
Chennai, India
Fifth Thai Ports and
Shipping
October 29-30
Imperial Queen’s Park Hotel
Bangkok, Thailand
Fifth Trans Middle
East
November 24-25
Gulf International
Convention and Exhibition
Centre
Bahrain
52
The supply chain and logistics link March 2009

ADVERTORIAL
Skycom focusing on
changes to achieve
long-term growth
Amid the global economic meltdown,
which has affected many industries,
Skycom Courier & Cargo would like
to stay positive by taking stock of the
market condition, its customers, and
focus on the changes that are required
for long-term growth and will benefit
the company. It is true that the business
volumes are being affected, but the key
to overcoming this condition will greatly
depend on the company’s ability to retain
customers by offering them services that
give value for money.
During its 15 years of presence in the
UAE, Skycom has excelled in various
areas, such as IT and operations. It has
tailor-made products and services that
are cost-effective to customers, with the
right blend of staffing, infrastructure
and technology to cater to the demand
created by the market.
According to Girish Nair, chief executive
officer of Skycom Group, this is an
ideal time to look at other developments
that would carry the organisation into
the next phase. Spreading its network
through strategic partnerships would
undoubtedly transform the group into
generating better profits and, thus, being
able to compete with the major players
in the industry. Skycom is presently
operating in countries within the Gulf
Co-operation Council (GCC), except
Saudi Arabia, and has established offices
in India, Singapore and Germany. It
also has immediate plans to revamp its
existing setup in the US, and expand
to Canada and the UK. Having started
as a courier service, Skycom is proud
of being able to handle any kind of
logistics requirements being demanded
by customers. This is very important at
a time when the market requires total
logistics solutions under one roof. Skycom
Cargo has regular express trucking
(FTL & LTL) to Qatar, Oman and
Bahrain, and will be looking to expand
“Skycom is
presently operating
in countries
within the Gulf
Co-operation
Council, except
Saudi Arabia, and
has established
offices in India,
Singapore and
Germany. It also has
immediate plans to
revamp its existing
setup in the US, and
expand to Canada
and the UK ”
to other GCC countries in the near
future. Airfreights, sea freights, cargo
clearance, warehousing and logistics are
the other activities being carried out
by the company’s Cargo Division. The
group has integrated all courier and
cargo activities on a single web site, a
move which enables customers to track
their shipments and receive updates on
the movements of shipment.
In addition, customers now have option
of registering pick-ups, to request for
stationery and generate airway bills
for outbound shipments using the web
site (www.skycomex.com). The web
site also provides customers access to
the monthly billing available in PDF
format and to view images of airway bills
pertaining to shipments sent. With these
developments, Skycom is aiming to keep
abreast of competition, driven by the
latest technology.

Opinion
Re-branding in the time of
financial crisis Dr Hubert K Rampersad
THE CURRENT financial crisis is driving
the world into a global recession. There is
no job security now. In times of financial
crisis, you need to be independent, be the
chief executive officer of your life and
redefine yourself, in order to create and
attract new opportunities. You can get
yourself out of this crisis by re-branding
yourself and managing your personal
affairs effectively, and by building,
implementing and cultivating your
authentic personal brand (PB).
If you are well-branded, you will
ride out the financial crisis, save costs,
generate more revenues, find it easier to
convince others and attract the people
and opportunities that fit your goal. All
this can be realised successfully, based
on an innovative four-stage authentic
personal branding model:
1) Define and formulate your authentic
personal ambition (PA). Your PA is the
soul, the starting point, the core intention
and the guiding principles of your PB. It is
the fuel for your brand and encompasses
your personal vision, mission and key
roles. It is about developing your selfawareness
and identifying yourself and
figuring out your dreams, your identity,
what you stand for, what makes you
unique and special, why you are different
from anyone and what your values are.
You may also do a breathing-and-silence
exercise. Your PA makes your PB personal,
and links this to your values.
2) Define and formulate your authentic
PB. Perform a personal SWOT (strengths,
weaknesses, opportunities and threats)
analysis and evaluate yourself after
a breathing-and-silence exercise. You
need to determine your specialisation,
concentrating on a single core talent and
defining your main specific services,
your key characteristics and your single
leading and most powerful attribute. You
must also know your customers and their
greatest needs. The next step is to define
your PB story (elevator pitch), which is the
essence of what you want to say about
your PB, in order to produce a positive
emotional reaction. Finally, you should
design your personal logo, which is a
single graphical symbol that represents
your PB.
3) Formulate your personal balanced
score card (PBSC). The emphasis here
is to develop an integrated and wellbalanced
action-plan based on your PA
and PB, in order to reach your life and
brand objectives and to eliminate any
negative elements. It is about translating
your PA and PB into your PBSC (action).
Your PBSC entails your personal critical
success factors that are related to your
PA and brand, and the corresponding
objectives, performance measures, targets
and prioritised improvement actions to
master the crisis and to manage yourself
effectively. It’s an effective tool that you
can use to manage and master yourself
and monitor your behaviour and actions.
4) Implement and cultivate your PA,
PB and PBSC. You need to articulate your
PB with love and passion, be committed
to change and improve your perceived
value in the marketplace and yourself
continuously. In addition, try to build
your credibility and become an expert
in your field. Get the word out through
a variety of media channels, do the
work you love which is consistent with
your PB and values, gain experience
in areas which you are weak, promote
yourself, market your brand frequently
and consistently, make conscious choices
about the people you associate with, build
a strong network and deliver your brand
promise.
This innovative personal-branding
approach will provide you a roadmap
to translate your ideas, dreams and
aspirations into manageable actions that
will help you adjust your market offerings
to the needs of your customers. While
some individuals fight for survival, this
financial crisis is an excellent opportunity
for visionary people who like to
differentiate themselves from the others,
create an identity that makes it easier
for the others to remember who they are,
be known as thriving and distinguished
professionals and keep on improving
themselves.
In other words, this new system will
help you grow and distinguish yourself
as an exceptional professional. Remember
what Albert Einstein said, “In the middle
of difficulty lies opportunity.” Now is
the best time to engage in a meaningful
dialogue with yourself and build your PB,
in order to cope with the financial crisis
with your unique value proposition.
If yoU ARe well-
BRAnded, yoU
wIll RIde oUT
THe fInAncIAl
cRISIS, SAve coSTS,
geneRATe MoRe
RevenUeS, fInd IT
eASIeR To convInce
oTHeRS And ATTRAcT
THe PeoPle And
oPPoRTUnITIeS THAT
fIT yoUR goAl. All
THIS cAn Be ReAlISed
SUcceSSfUlly, BASed
on An InnovATIve
foUR-STAge
AUTHenTIc PeRSonAl
BRAndIng Model
This article is based on the author’s new
book, Authentic personal branding: A
new blueprint for building and aligning a
powerful leadership brand (Information Age
Publishing, USA, 2009). He is president
of TPS International Incorporated (Miami
Beach).
54
The supply cHain anD logistics link March 2009

Faces & Phases
Museum of the Fine Arts, Lille: The fourth-largest metropolitan area in France, Lille is great for the logistics business as it is situated halfway between Paris and Brussels
GAC expanding, consolidating
in Western Europe
DUBAI-based GAC will open
an office in France, and has
instituted organisational
changes in Russia to serve a
fast-growing market for the
shipping, logistics and marine
services industries that the
company serves.
The company’s French
office in Lille will be its first
expansion this year, and
is aimed to help develop
trade lanes and manage key
accounts for GAC operations
in Western Europe, including
the Benelux countries of
Belgium, The Netherlands and
Luxembourg.
“Lille is the ideal location
for the logistics business
development office, as it is
situated halfway between
Paris and Brussels, and it
will bring us closer to our
customers,” said Gunnar
Lundgren, GAC’s regional
logistics manager.
He added that the company’s
European key account manager,
Guillaume Gilleron, will run
the Lille office. Gilleron worked
previously in GAC Singapore
and GAC Hong Kong.
With its head office in
Moscow, GAC Shipping &
Logistics has consolidated
its facilities within the
Gulf Agency Company, in
Novorossiysk, and GAC St
Petersburg.
It also added a third branch
at the new port of Taman,
on the Black Sea, where GAC
is looking to specialise in
providing shipping services at
liquid and dry bulk terminals.
“By restructuring its
business in Russia, GAC is able
to focus on its core services
and customers,” said Arkady
Podkopaev, who returned
to his native Russia to take
over as general manager of
GAC Shipping & Logistics
after three years with GAC in
Turkmenistan.
He said the reorganisation
has made GAC “better
positioned and equipped” to
discover new markets, such
as marine services, for the
growing offshore industry
in Russia and its territorial
waters.
56
The supply chain and logistics link March 2009

Beatrice Cosgrove accepting an Etihad’s award from Michael Flood,
editor of Irish Travel News, as the president of the Irish Travel Agencies
Association, James Vaughan, looks on
Irish organisation
names Etihad best
business class
airline
FOR THE second year in a row, Etihad Airways won the
‘Best Business Class Airline’ award given by an Irish
organisation. It was also presented the ‘Best Airline to the
Middle East and Africa’ award at The 17th Annual Irish
Travel Trade News Awards.
Etihad, which was also voted runner-up in the ‘Best
Airline to Asia and Australasia’ category during a recent
ceremony in Dublin, celebrated in July its second
anniversary of flights to Ireland, the company said in a
statement.
In November, the airline won the ‘European
Sponsorship of the Year’ award in the business-toconsumer
category, owing to its sponsorship of the GAA
Hurling All-Ireland Senior Championship.
“Etihad Airways enjoyed a very successful 2008 in
Ireland, achieving an average seat factor of 80%, and
so to be recognised by the travel agents of Ireland and
Northern Ireland is a great privilege,” said the airline’s
country manager for Ireland, Beatrice Cosgrove.
In January, Etihad made a code-share agreement
with Aer Arann, making it more accessible for
passengers to travel from across Ireland, particularly
Cork and Galway.
BIFA bestows
‘Environment Award’
to Aramex
THE BRITISH International
Freight Association (BIFA) has
granted Aramex the ‘Environment
Award’ at its 20th Annual Awards
Ceremony, making the global
logistics solutions provider the
first winner in the category
introduced last year.
Stressing that Aramex has
been running a successful
business while reducing its
carbon footprint, the judges
said the award recognises the
company’s ongoing commitment
to sustainable development, as
it invests in and identifies ecofriendly
practices.
“A successful business is always
admired,” they said during the
award ceremony in London.
“However, what should be
respected is a company that is
leading the way and showing its
commitment to our environment.”
Camille Nasrallah, chief
executive officer of Aramex for
Europe, stressed the importance
of applying “green business
solutions” to help protect the
environment. This move, he
added, has made his company
gain financially and strategically.
Aramex was among 34
finalists vying for the trophies
in nine categories at the BIFA
Freight Service Awards. The
awards are recognised as the
most prestigious within the
freight forwarding and logistics
industry, as they encourage and
identify high standards and
special achievements in business
operations.
Last year, Aramex introduced a
number of eco-friendly initiatives
to its operations, including
biodegradable pouches, and
became the first company in the
Middle East to use hybrid vehicles.
It aims to be the industry’s first
carbon-neutral service provider.
“This commitment to
sustainability... has helped Aramex
become a well-known leader in
eco-friendly practices,” Nasrallah
said.
As part of a comprehensive
strategy outlined in its “Corporate
Sustainability Report”, Aramex
has set environmental targets,
including a 50% reduction in
carbon emissions per shipment.
The company also reinvests
one per cent of its annual profits
towards sustainable projects and
business activities, including
those that reduce its long-term
impact on the environment.
Camille Nasrallah (centre) is being congratulated by Steve Corbet, of award sponsor
CargoWise edi, as the former British minister of state for transport, Michael Portillo,
presents the BIFA Award for the Environment to Aramex
March 2009 The supply chain and logistics link 57

Faces & Phases
Faulds, Amornpatsophon
given new GAC positions
AIMING to strengthen its global logistics
activities, UAE-based shipping, logistics and
marine services group GAC has appointed
two new officials in Thailand who will report
to the company’s headquarters in Dubai.
John Faulds is now GAC Logistics’ Bangkokbased
global account manager, with Thanida
Amornpatsophon assuming his previous role
as GAC’s strategic purchasing unit manager
for airfreight in Thailand.
Faulds served for more than eight
years in his previous role at GAC while
Amornpatsophon was GAC’s strategic
purchasing unit executive for airfreight in
Thailand. Their new appointments began in
February.
Faulds used to be the vice-president of
Jardine Logistics in the US and Thailand,
where he managed a number of blue-chip
accounts.
John Faulds
Thanida Amornpatsophon
Etihad names Iran country
manager, reshuffles RGMs
ETIHAD Airways has appointed
Nabil Matarweh Hijazine as its
country manager for Iran. Based
in the capital Tehran, he will be
responsible for the Abu Dhabibased
airline’s commercial
operations across Iran.
“Nabil’s extensive commercial
experience in the Middle East
will be invaluable in his new
role,” said Geert Boven, the
airline’s executive vice-president
for sales and services. “He
understands the challenges
facing the aviation industry and
the importance of the Iranian
market in the global growth
plans of Etihad Airways.”
Etihad, meanwhile, has
restructured the sales teams of
its regional general managers
(RGMs), in line with the
ongoing expansion of its
route network. “The changes
reflect our ambitious growth
and development plans in
the respective regions and
new centres of focus… in the
coming years,” Boven said.
The restructuring will see
an increase in the number of
sales teams responsible for the
Middle East – especially the
UAE and Oman – Europe, Asia-
Pacific South and Australasia,
Asia-Pacific North and the
Indian Sub-continent, Africa
and the Americas.
Etihad said its presence
in the Iranian market could
“expand significantly”, owing
to an agreement allowing the
airline to operate 43 additional
weekly flights between Abu
Dhabi and the Iranian cities
of Tehran, Shiraz, Mashhad,
Esfahan and Kish.
The agreement was signed
by the UAE General Civil
Aviation Authority and the
Civil Aviation Organisation of
the Islamic Republic of Iran.
Hijazine has worked in the
commercial aviation sector in
the Middle East and North
Africa over the past 24
years, including as country
manager for Qatar Airways
in Algiers and Jordan. He
also held senior positions
in sales in Jordan, working
for Emirates Airline, Air
France, British Airways and
Royal Jordanian Airways.
Boven said the position
of RGM for the Americas Nabil Hijazine
has been given to Robin
Middleton, who joined
Etihad on November 15
the Middle East.
after working for the British Raymond Korban, Cramer
Airways, Qantas and Gulf Air. Ball and Joost den Hartog
Daniel Barranger, who has will continue with their
a 25-year experience in the respective role as RGM for
aviation, hospitality and the UAE and Oman, Asiacar-for-hire
industries in Pacific South and Australasia
the Middle East and Europe, and Asia-Pacific North and
assumed his position of RGM the Indian Sub-continent.
for Europe on January 5. Kirk Etihad offers flights to 50
Albrow is the new RGM for destinations in the Middle
Africa while Maen Abdul East, Europe, North America,
Halim has become the RGM for Africa and Asia.
58
The supply chain and logistics link March 2009

Emerson specialises in technology and engineering Photo courtesy of Emerson Process Management
Emerson sees increased revenue
on new regional HQ in Dubai
EMERSON, a global player in industrial
automation and climate technology, hopes
to generate sales revenue of over $1 billion
from its Middle East business in the near
future, following the opening of its new
regional headquarters in Dubai.
“The Middle East region continues to be
a strong market for Emerson technologies
and services, and we see increasing
opportunities to expand our presence in
the months and years ahead,” said David
N Farr, the company’s chairman, chief
executive officer and president.
Farr, who visited Dubai in January, said
Emerson is pouring investments into the
UAE, particularly Dubai and Abu Dhabi,
and in Kuwait and Saudi Arabia as part
of the company’s growth and expansion
programme.
It has also been making significant
investments in Qatar, where it is the
preferred supplier of automation
technologies and services to Qatargas, one
of the world’s major producers of liquefied
natural gas.
Emerson has more than 300 employees
working at its 130,000-square-foot regional
headquarters in the Jebel Ali Free Zone.
This is where Emerson assembles and tests
its products and advanced technology
solutions before shipping them to
customers in the Middle East and Africa.
There are also plans for the company to
open a regional engineering and training
centre in Doha within the next year, in
order to serve its customers better in the
northern part of the Middle East.
Last year, Emerson opened an office in
Doha and now has 40 resident employees
there, and another 45 employees are
working onsite in Ras Laffan on start-up
and commissioning activities.
March 2009 The supply chain and logistics link 59

Faces & Phases
deutsche Bank grants al Khalifa,
hassan new positions
DEUTSCHE Bank has announced the
appointment of Salman Al Khalifa as head
of its Global Markets Middle East and
North Africa (MENA) and Hussein Hassan
as head of both Structuring MENA and
hussein hassan
Islamic Finance.
“These two appointments demonstrate
our commitment to invest in this business
and develop the best local talent in the
region,” said Yassine Bouhara, the bank’s
Salman al Khalifa
global head of Structuring and head of
Global Markets Europe, the Middle East
and Africa.
A Bahraini, Al Khalifa was previously
head of Global Markets Sales at Deutsche
Bank while Hassan, a Kenyan of Yemeni
origin, used to be the bank’s head of
Islamic Structuring. The former also held
senior positions at Investcorp in Bahrain
and UBS in London.
Hassan studied Shari’a law in Yemen
and is a holder of a DPhil in Law from
Oxford University, where he also taught
law at its Mansfield College, and was a
fellow in Islamic law at the Oxford Centre
for Islamic Studies.
Replacing Ricardo Honegger and Geert
Bossuyt, respectively, Al Khalifa and
Hassan took up their new positions in
late-January. Honegger has retired and
resettled in Japan with his family.
“Deutsche Bank has witnessed
tremendous growth in the region over
the last few years, and firmly established
for itself a leadership position in
regional markets,” said Henry Azzam,
the bank’s chief executive officer in the
MENA region. “We believe that the new
appointments will further strengthen our
offering and our regional franchise.”
GaC launches internal environmental award
DUBAI-based logistics and
marine services group
GAC has launched an
environmental excellence
award dedicated to the
operations of its 79
companies worldwide.
Under the patronage
of Björn Engblom, group
executive chairman of
GAC, the award recognises
the concrete, measurable
achievements by local GAC
companies in reducing
resource usage, recycling
and re-using materials.
Dubbed ‘The Chairman’s
Award for Environmental
Excellence’, the recognition
will be given annually with
a cash prize of $10,000 for
the winner.
“We want to keep this as
a locally-based initiative and
to avoid using corporate
buzzwords like ‘carbon
footprint’ and ‘greenhouse
gas percentages’,” said the
company’s group president,
Lars Säfverström.
He also said the award
emphasises “clear and
simple” achievements, such
as how many kilos of paper
and litres of water saved
and the number of printer
cartridges recycled by a GAC
company in a year.
“GAC has been an
environmentally-aware
organisation for many
decades, stemming from
our Scandinavian roots,”
he stressed. “But now
we are taking the next
step to ensure all our
companies have a clear
incentive to… find ways to
reduce our impact on the
environment.”
With global operations,
GAC has been growing
in key logistics sectors,
including last year’s
acquisition of OBC, a major
UK-based shipping agency. It
also opened new operations
in Kazakhstan, Algeria,
Mozambique, the Czech
Republic and Poland.
The award emphasises, among other things, if how
many kilos of paper are used by a GaC office
60
ThE supply chain anD logisTics linK March 2009

www.ccube.org
www.thegreenhouse.ae
A fresh approach to analysing
the industrial sector in the Middle East
Tel: +971 4 3756830 • Fax: +971 4 4341906
www.cpi-industry.com

Side View
etihad’s first group of emirati cadet pilots: al menhali, ahmed, Bin Jathnan, al afifi, Saeed and haidar
Flying high
SINcE its inception in January 2007, the Emirati cadet pilot
programme of Etihad Airways has grown considerably and
now boasts 55 UAE nationals undergoing training to become
fully qualified pilots with the airline. Etihad’s Emiratisation
initiatives also focus on two other streams, including the
technical engineering development programme and the graduate
management development programme.
Etihad currently has two international cadet pilot courses,
which are being run concurrently with five Emirati courses at the
Horizon International Flight Academy, in Al Ain. The two groups
have 24 cadet pilots from various countries worldwide, including
Hungary, Canada and the UK.
On February 23, Etihad announced the graduation of its first
group of Emirati cadet pilots, who gained their airline transport
pilot licence (ATPL) after completing flight training at Horizon.
The six graduates are Khalid Saeed, Ebrahim Haidar, Abdullah Al
Afifi, Ahmed Yousef Ahmed, Mohamed Al Menhali and Ayman
Abdulla bin Jathnan. They took the 18-month course in January
2007, and have now joined Etihad as second officers.
The airline’s chief executive, James Hogan, described the
occasion as “a very proud moment for everyone” at Etihad. “As the
national airline of the UAE, it is very vital that we have Emiratis
working in all areas of the company, and so to have our own
‘homegrown’ pilots in our ranks is fantastic,” Hogan said.
The new pilots will now undergo courses on multi-crew
co-operation and Airbus A320 type conversion before they are
able to fly as co-pilots on Etihad’s A320 short-haul fleet. They will
also spend time developing their non-technical skills needed in a
multi-crew environment. They will complete these courses over
six months and be qualified as A320 first officers.
“The six Emirati pilots are an inspiration to us all, and we wish
them the very best of luck as they now enter the next phase of
their careers with Etihad and practice and study full-time at our
brand-new training academy,” Hogan said.
Horizon’s general manager, Mohammed Humaidan Al Zaabi,
noted the UAE’s “strong history” of producing pilots, such as the
six new graduates. “It is a great privilege for Horizon to have been
chosen by Etihad to train these young pilots in the first step of
their careers,” he said. Both parties, he added, are proud to have
“played a part in the continuation of this story”.
The cadet pilots had to complete 750 hours of classroom
tuition and 205 hours flight training in single and multi-engine
aircraft. They passed the theoretical and flying exams given by
the UAE General Civil Aviation Authority.
62
ThE supply chain anD logisTics linK March 2009