V O LV O T R U C K S M E

PACKAGING FOCUS

RAKIA

On the highway to success

Industry packs a punch

Magnet for new investments

CONNECTING TRADE PROFESSIONALS WITH INDUSTRY INTELLIGENCE

HEAVYWEIGHT ETIHAD CARGO :

FEBRUARY 2015

ON THE WINGS OF SUCCESS

Contents

Start 6 | News Scan:

Roundup of Regional & International news

14 | Etihad Cargo:

Successful 2014 for the air freight heavyweight

22 | Volvo Trucks ME: Vroom, Vroom Volvo— revving up sales in the region

Features 25| Chemicals

Logistics: RSA-Talke & Dow Chemicals in transportation, storage deal

14

26 | Packaging:

Potential Unwrapped— Industry bursting at the seams

38 | RAKIA: CEO

Rino Sabatino pushes investments with evangelical zeal

28 | Tetra Pak:

Packing a punch in the packaging industry

32 | Can-Pack:

38

Demonstrates a ‘Can-do’ approach

Law: Downturn in oil prices implies upturn in offtake

Perspectives: PK Menon on driving sales and fostering brand loyalty

Insights: Charting the new Multi-Modal Silk Route

2015: Plans for rail development on track in GCC

41 | Logistics & The

33| Professional

36 | Asia Supply Chain

39 | GCC Rail Summit

39

45 | Gulf

Warehousing Corporation: Qatar’s top LSP has a stellar 2014

Logistics News ME | February 2015 | 3

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Editor’s Note LOGISTICS IN REVIEW For most businesses it is customary, at the start of the New Year, to take stock and review the year that has just passed. Financial results, balance sheets, annual reports & other performance indicators for companies for the fiscal / calendar year 2014 are just emerging and as would be expected, several companies have fared well despite the challenges and the odds. At Logistics News Middle East we chose to highlight a few that outperformed. One of these is the 2004-established Etihad Cargo, part of Etihad Airways that posted impressive results for 2014 and passed out literally with ‘flying colours’. This fast growing, heavyweight division of the UAE’s National Airline has had a stellar run and come up trumps. The freight arm of one of the UAE’s two flag carrier airlines is the subject of our cover story for this edition. We have an exclusive conversation with David Kerr, Vice President, Etihad Cargo. Meanwhile, Swedish premium truck manufacturer Volvo, sponsors of the prestigious eponymous Ocean Races, the world’s premier ocean races, has fared well in the Middle East (as elsewhere) as was highlighted to Logistics News Middle East in an exclusive interview by Lars-Erik Forsbergh, President, Volvo Trucks Middle East at the special Volvo Pavilion in the Abu Dhabi Marina on the eve of the start of the 4670 nautical mile-third leg of the Volvo Ocean Races bound for Sanya, China. Elsewhere in the GCC, Qatar’s top 3PL services & inte-

grated logistics solutions provider Gulf Warehousing Company (GWC) has also had a fruitful year as revenues peaked at US $ 185 million in 2014. Packaging is such a vital, indispensable and integral aspect of our lives today. It impinges almost everything we do on a daily basis. Packaging is the subject of our special focus report. It is estimated that the global packaging industry will generate a staggering US $ 975 billion in sales by 2018 and 60 % of that will be attributable to the food industry. Rino Sabatino, the supremo at the Ras Al Khaimah Investment Authority (RAKIA), home to over 7000 companies in two large industrial parks, has been in the forefront, making a compelling case for new and increased investments in the picture postcard perfect, verdant, the most northerly Emirate of the UAE. We get the low down on the latest at RAKIA in an exclusive interview. There’s also a lot more—more news, features and input from professionals in the field. Hope you enjoy reading this edition. If you have a comment to make or wish to make a point do write to me. We welcome your observations and look forward to hearing from you. After all, you, our readers, are at the center of it all!

Malcolm Dias Editor malcolm@bncpublishing.net

Editor Malcolm Dias Malcolm@bncpublishing.net

Group Sales Manager Jayant Dey Jayant@bncpublishing.net

Managing Director Walid Zok Walid@bncpublishing.net

Art Director Rana Husam Shiblaq rana@bncpublishing.net

For all commercial enquiries related to Logistics News Middle East contact

Marketing Mark Anthony Monzon Mark@bncpublishing.net

T +971 50 1971200

Director Rabih Najm Rabih@bncpublishing.net Director Wissam Younane Wissam@bncpublishing.net Group Publishing Director Diarmuid O'Malley Dom@bncpublishing.net

4 | Logistics News ME | February 2015

CONTRIBUTORS Mark Millar, Joy Thattil, Prakash PK Menon

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Jayant@bncpublishing.net All rights reserved © 2014. Opinions expressed are solely those of the contributors. Logistics News Middle East and all subsidiary publications in the MENA region are officially licensed exclusively to BNC Publishing in the MENA region by Logistics News Middle East. No part of this magazine may be reproduced or transmitted in any form or by any means without written permission of the publisher. Printed by Raidy Emirates Printing Group LLC www.raidy.com

Logistics News ME | February 2015 | 5

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The News LANDMARK 2000TH VESSEL CALLS AT SOHAR IN 2014 SOHAR Port and Freezone recently celebrated the arrival of the recordbreaking 2000th vessel to call at the Batinah port in 2014, according to Executive Commercial Manager Edwin Lammers. It is the first time that the landmark figured has officially been reached in a year and came ahead of the start of the New Year. Officials at the port welcomed the Republic of the Marshal Islandsregistered vessel, a 200-metre Glovis Superior vehicle carrier, at the multipurpose cargo terminal operated by C. Steinweg Oman. Once unloaded, the vessel made its

onward journey cross the Arabian Sea on its way to MMR Port in Hambantota, Sri Lanka. More than 200,000 cars are imported annually through SOHAR, following a deal signed at the start of the year with Saud Bahwan. As a representative of brands that include Toyota, Lexus, Ford, Daihatsu, and Kia, the company leased a 400,000 sq. m. plot at SOHAR Freezone for a

vehicle storage and distribution centre for Toyota and Lexus. Similar deals are already in place with Suhail Bahwan and OTE at SOHAR.

Cars unloaded from an automobile carrier at SOHAR

Logistics Academy commences in Dubai The Logistics Executive Group have reached a major milestone after 15 years of doing business, with their global Logistics Academy. It recently completed its first course in the Middle East organized as a result of a partnership between Logistics Executive Group and Iconis Learning & Development, a leading worldwide training organisation represented in the UAE by their Senior Associate, Niharika Davar. The workshop was delivered in Dubai by Iconis Directors David Rowlands and Jon Spencer who have over 50 years’ learning and development experience. The workshop included two half day interactive sessions focused on developing Emotionally Intelligent Leadership and Employee Engagement Skills.

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US $ 82.2 million ADT’s financing deal with ADCB

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FEDEX, ALJ GROUP IN NEW TIE-UP FedEx Express has selected Abdul Latif Jameel Group (ALJ Group) as a new global service provider in Saudi Arabia as of January 2015, for its international inbound and outbound services to and from 220 countries and territories. “Our Group’s 60 years of logistics experience, combined with our being the premier transportation provider in the country make us a prime choice for providing logistics services,” remarked Mohammed Abdul Latif Jameel, Chairman & President, ALJ Group. FedEx has been active in Saudi Arabia for more than 20 years and the Kingdom’s demand for international cargo is expected to grow by 5% and 7 to 8% for air and sea cargo, respectively, through 2020 according to SAGIA (The Saudi Arabian General Investment Authority). “This strategic relationship with Abdul Latif Jameel Group aligns with our ‘customer first’ philosophy that defines our commitment to make every FedEx experience outstanding,” commented David Ross, senior vice-president of FedEx Express Middle East, Indian Subcontinent & Africa operations.

Compliance.

ADCB, ADT IN FINANCE AGREEMENT Abu Dhabi Commercial Bank (ADCB) recently announced a financing agreement with Abu Dhabi Terminals (ADT) for the development of the Khalifa Port Container Terminal (KPCT). The US $ 82.2 million agreement marks the first long-term finance solution for ADT, and extends ADCB’s relationship with the terminal operator to include its complete suite of products and services. ADCB will act as the sole provider of cash management, interest rate and lending services to support ADT’s ambitious growth strategy and contribute to its local and global competitiveness. Colin Fraser, Head of Wholesale Banking at ADCB remarked “This facility exemplifies the excellent, strategic engagement we have with ADT. We look forward to supporting the company in the future.” Martijn Van De Linde, CEO of Abu Dhabi Terminals, commented: “This important financial partnership with ADCB allows us to invest in the required expansion to support the economic growth of the UAE and at the same time provide our customers with fast and efficient services.”

200,000

THE NUMBER OF CARS IMPORTED ANNUALLY THROUGH SOHAR

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5For%Saudi Growth Arabia’s

air cargo industry through 2020—SAGIA estimates .................................

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Sharjah Container Terminal Staff celebrating the milestone occasion

Gulftainer surpasses 400,000 TEU milestone Gulftainer marked another significant milestone with the Sharjah Container Terminal (SCT) surpassing 400,000 TEUs (Twenty Foot Equivalent Units) in annual throughput during 2014. SCT has again recorded double-digit growth compared to last year’s volumes.

management, along with consistently high productivity levels, was a driving force behind the Terminal’s success. “SCT has always marketed itself as ‘The Flexible Alternative’ and the individual attention we extend to our customers offers us an advantage over competitors,” he commented.

Iain Rawlinson, Group Commercial Director of Gulftainer said that the professional approach of Gulftainer’s

The 400,000th unit was discharged from Mag Container Lines’ vessel, ‘Mag Success’, one of the Terminal’s regular callers, which

considers Sharjah as her base port. Speaking on behalf of Mag Line’s CEO, Jamal Saleh congratulated the Terminal for its achievement. With a current handling activity of over 6 million TEUs, Gulftainer has set an ambitious target to triple the volume over the next decade through organic growth across existing businesses, exploring green field opportunities and potential M&A activities.

AIR ARABIA TO OPEN NEW INTERNATIONAL HUB IN JORDAN

Etihad Rail & NTCC

ETIHAD RAIL AWARDS HOUSING CONTRACT TO NTCC Etihad Rail recently announced that the contract for the design and build of employee residences in Mirfa has been awarded to National Transport & Contracting Company (NTCC), a building company operating in the Western Region of Abu Dhabi, as part of Etihad Rail’s contribution to economic growth in the Western Region.

In the presence of representatives from the Western Region Development Council, Etihad Rail DB signed a contract with NTCC to build 170 high-quality, serviced beachfront residential units equipped with advanced technology and entertainment systems. Construction work of the longterm accommodation facility is expected to be completed in the second half of 2016.

Eng. Faris Saif Al Mazrouei, Acting CEO at Etihad Rail, observed: “Our selection of NTCC as a contractor is part of our wider strategy to support businesses that play a significant role in driving economic development and growth in the Western Region.”

Yasser Al Khaja, CEO of NTCC, welcomed the deal. “We would also like to thank Etihad Rail DB for selecting NTCC to build these world-class residential units which will also serve Mirfa’s residents and visitors with wider lifestyle and recreational opportunities,” he noted.

Air Arabia recently announced that it will open a new international hub at Amman Queen Alia International Airport in Jordan, its fifth fixed-based operation globally, following the acquisition of a 49 per cent stake in Petra Airlines. The new partnership will also lead to the creation of Air Arabia Jordan. Following the acquisition and the establishment of the new Air Arabia Jordan operations is expected to commence in the first quarter of 2015. The newly established carrier, managed by Air Arabia, will be the carrier’s fifth hub in the Arab world. Air Arabia Jordan will provide direct service to a range of destinations across the Europe, Middle East and North Africa region. “Partnering with an established airline like Petra Airlines provides Air Arabia the opportunity to deliver operational and commercial support,” asserted Sheikh Abdullah Bin Mohammad Al Thani, Chairman of Air Arabia. “Our partnership with Air Arabia represents an important next phase in the progression of Petra Airlines and will be the catalyst for a new era of growth for the low cost aviation sector in Jordan,” affirmed Riad Khashman, Chairman of RUM Group and Petra Airlines. Logistics News ME | February 2015 | 7

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UASC orders 2,000 new reefer units United Arab Shipping Company (UASC) recently announced an order of 2,000 reefer containers from Daikin. The order marks the first milestone in the expansion of UASC’s reefer services and reinforces the company’s ongoing investment in the most cutting-edge, energy-efficient solutions for the carriage of frozen and chilled cargoes. The containers will be fitted with Daikin’s latest LXE 10E model reefer unit - the “H” model. While providing the optimum temperature environment and airflow for chilled cargo, hardware and

49 %

software developments have significantly reduced power consumption. The units have a highly sensitive temperature control system, making it suitable for any weather condition and all types of cargo. Gareth Madsen, head of reefer management, UASC commented: “The progressive expansion of UASC’s fleet of refrigerated units ensures enhanced reefer availability for all our customers. This order will enable UASC to deliver the right level of accessibility, quality and efficiency for the carriage of frozen and chilled cargoes.”

The percentage stake acquired by Air Arabia in Petra Airlines

......................................................... Agility to develop 40 acre Distribution Park in Ghana Agility recently broke ground on construction of a distribution park on a 40-acre site in the Tema Port Free Trade Zone Enclave in Accra, Ghana. The Agility Distribution Park, one of a series of logistics hubs that Agility is building across the African continent, will provide international standard logistics infrastructure to local, regional and global companies operating in Ghana. Speaking on this latest Agility 8 | Logistics News ME | February 2015

investment into the region, Geoffrey White, Agility CEO Africa remarked: “Agility is committed to developing a network of quality Distribution Parks in Africa. By providing much needed import and export routes in and out of Africa, Agility Distribution Parks will help companies operate in Africa with the reliable, modern and secure infrastructure they need to grow their business.”

Hussein Wehbe, UAE Country Manager, Aramex (L) & Rashed Ali Al Ansari, General Manager, Al Ansari Exchange

ARAMEX EXPRESS BOX LAUNCHED IN PARTNERSHIP WITH AL ANSARI Aramex has announced its partnership with Al Ansari Exchange, the UAE-based Foreign Exchange and Worldwide Money Transfer Company to launch a new UAE service, the Aramex Express Box. Aramex Express Box is an automated kiosk that will facilitate international and domestic express shipments for Aramex customers with boxes strategically placed at selected Al Ansari Exchange branches around the UAE. Customers will be able to easily prepare their packages and drop them in the secure kiosks at times and places fitting their schedules. “The Aramex Express Boxes will offer extended service times, more UAE locations in addition to our existing 14 outlets,” commented Hussein Wehbe, UAE Country Manager, Aramex.

400,000+

THE NUMBER OF CONTAINERS PASSING THROUGH SHARJAH CONTAINER TERMINAL (SCT) IN 2014

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Emirates NBD adopts NCR’s

APTRA™ activate

Emirates NBD recently affirmed that the Emirates NBD Group has become the first in the Middle East region to successfully introduce NCR’s Consumer Experience Banking (CxBanking) software—APTRA™ Activate. Seen at the Press Conference to announce this introduction is from left to right: Pedro Cardoso (Emirates NBD), Ali Sajwani (Emirates NBD), George Flouros (NCR) and Habib Hanna (NCR)

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Logistics News ME | February 2015 | 9

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FIRST SCHEDULED RORO SHIP CALLS AT KHALIFA PORT

Capt. Guillermo Endozo (L) accepting a commemorative plaque from Gary Lemke, EVP Ports, Abu Dhabi Ports

Abu Dhabi Ports welcomed the first scheduled RORO vessel to call at the Khalifa Port RORO terminal. The MV Dream Angel recently berthed at the port, heralding the transition of Abu Dhabi Ports’ Roll-On / Roll-Off (RORO) cargo, from Zayed Port to Khalifa Port. The MV Dream Angel, which is operated by Nissan Motor Car Carrier (NMCC), arrived from the Port of Yokohama and Port of Kanda in Japan and carried 164 car units for Abu Dhabi Ports’ key customer Al Masaood Automobiles, the distributor for Nissan & Infiniti cars in the Emirate of Abu Dhabi. To mark the first ever visit, the ‘maiden call’ of the MV Dream Angel to Khalifa Port, Abu Dhabi Ports officials welcomed the captain and his crew with an official ceremony and presented a commemorative plaque to mark the occasion.

PANALPINA EXPANDS INTO AFRICA

Hassan El Houry, CEO, National Aviation Services with Gaoussou Toure, Minister of Transport, Government of Cote d’Ivoire at the signing

NAS awarded contract for Abidjan Airport Kuwait-based Agility subsidiary National Aviation Services (NAS), the fast-growing ground handling company has been awarded with its first contract award in West Africa. With the new contract, NAS has now expanded its operational network to 16 stations in nine countries. Under the ten year contract, NAS will provide ground handling services at the Felix Houphouet-Boigny International Airport in Abidjan as a part of a public private partnership with the Government of Cote d’Ivoire (Ivory Coast). The ground handling contract includes passenger services, ramp handling, cargo 10 | Logistics News ME | February 2015

management and warehousing as well as other related airport services. The official signing ceremony took place in Abidjan last week with Cote d’Ivoire representatives, Gaoussou Toure, Minister of Transport and Hassan El Houry, CEO, National Aviation Services. Abidjan airport currently handles close to 1.5 million passengers, 8,200 aircrafts and close to 20,000 tons of cargo annually. NAS Ivoire, led by newly appointed General Manager Olivier Berni will work through a six month transition period before taking over complete airport operations in mid-July.

International freight forwarding and logistics company, Panalpina, has opened two new bases in Morocco and Kenya. The offices in Casablanca and Nairobi became fully operational in January 2015, and support Panalpina’s growth strategy for the region. Panalpina has established its own offices in Morocco and Kenya, giving customers in these expanding economies a single point of contact, and direct access to the company’s global network and services in air freight, ocean freight and logistics. “Expanding our global presence is part of Panalpina’s overall strategy, especially in growth economies such as Morocco and Kenya,” affirmed Peter Triebel, Panalpina’s Regional CEO, Middle East, Africa & CIS (MEAC). Morocco offers Panalpina several business opportunities in key industries such as energy, automotive, aerospace and healthcare. “Morocco has great business potential; in future the country will serve as a gateway to Mauritania on the West African coast, and to the inland African countries of Mali, Burkina Faso and Niger,” explained Maxime van Geenberghe, Panalpina’s new Managing Director in Morocco.

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ALSTOM AWARDED RAIL CONTRACT IN EGYPT Alstom has been awarded a contract worth US $ 113million by Egyptian National Railways (ENR) to supply signalling equipment for the 240 kmlong Beni Suef-Asyut line in Egypt. Delivery will start in 2016 and the system is due to be operational by January 2019. Alstom will provide Smartlock solution, its new Electronic Interlocking System (EIS) to replace the existing electromechanical one, as well as a trackside equipment, a power supply and a telecommunication system. Alstom’s solution will ensure safety for passengers while increasing the number of trains in circulation on the network by more than 80%. Gian-Luca Erbacci, Senior Vice President of Alstom Transport Middle East and Africa declared: “Alstom has been supporting the country’s railway projects for 30 years, including the Cairo metro, and aims to accompany the country for more projects to come”. Alstom currently has contracts in 23 countries covering 12,000 km of track, including six of the world’s eleven high-speed lines.

Please visit us at Aircargo Africa Booth No. 46

Logistics News ME | February 2015 | 11

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It is, without doubt, one of the harshest environments on earth: the Empty Quarter in the Kingdom of Saudi Arabia – the largest and most barren sand desert in the world, spreading itself over four Arab nations and covering 650,000 km2 which is comparable in size to France. Temperatures range from 50° to -1°C in the course of a single day and the sand and dust are relentless. The nearest city is 1000 kilometres away. So the construction of a 256 kilometre road cutting through this wildnerness, linking Saudi Arabia to the Sultanate of Oman, called for an extraordinary solution. The response: a eet of 95 Volvo machines was assembled. Together, they shifted over 130 million m3 of sand just to build the bridge of the road – an extraordinary feat in such harsh conditions, yet the quality and power of Volvo engineering was up to the challenge. The dif culties created by the remote isolation of the worksite were answered with excellent customer support from FAMCO, the authorised Volvo dealer in Saudi Arabia, which included the organisation of mobile 24/7 service workshops that moved forward with the construction operation.

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12 | Logistics News ME | February 2015

Watch video

www.famcosaudi.com

www.famcouae.com

Logistics News ME | February 2015 | 13

COVER STORY .....................................................................................................................

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COVER STORY .....................................................................................................................

By securing over US $1 billion in revenue during the year, we demonstrated the strength of this area of the business. It has been a strong year of growth and one we can be proud of but there remains more to do in 2015 so we will not be resting on our laurels. We have made great strides in 2014 but also see further opportunities to capitalize upon.

Etihad Cargo, the fast growing freight division of UAE multiple-awards winning National Airline Etihad Airways, has been a high-flyer and closed strong in 2014. Its dedicated freighter fleet of 10 aircraft that fly from Abu Dhabi International Airport on scheduled services currently to over 100 (and counting) airline passenger destinations worldwide and a further 16 freight-only destinations, have had the proverbial wind beneath their wings in 2014 thanks to smart planning, a clear growth strategy, multiple service & products offering, global expansion, mutually-beneficial partnerships, investments in acquiring new & additional aircraft and assets, excellent airport & handling infrastructure & resources at their home base in Abu Dhabi and financial muscle. This is clearly evidenced by excellent performance statistics (see box). Etihad Cargo has been a success story since its inception in 2004, shortly after the airline was established by a Royal Decree in July 2003 and commenced operations in November 2003. Etihad Cargo has gone weightier growing from strength to strength since its founding. This has been clearly borne out by preliminary 2014 performance figures and forecast to register a respectable 17 % increase over corresponding 2013 statistics. Logistics News Middle East touched down with David Kerr, Vice President, for the latest on Etihad Cargo’s performance, plans, partnerships and prospects for the future. By all indications, Etihad Cargo is poised for a record 2014 performance. Please elaborate in both volume and revenue terms? It’s been a year of real progress and Etihad Cargo’s total uplift for 2014 has been 570,000 tonnes, which is a 17 per cent increase on 2013. The division has already secured over US $1 billion in revenue to date and we are a strong

supporting factor to the aviation group’s activities. To what do you attribute this good showing? Based on what we are witnessing there is a strong market demand for our services and as we are expanding our global reach as an airline, we are more available to new areas of the market right across the globe. This is not only through Etihad Cargo, but alongside our partners which is increasing our market share into important growth areas. November 2014 was an extraordinarily good month for Etihad Cargo, when the uplift exceeded 53,000 tonnes across your global network. What caused the surge in this month? November 2014 was proof that we are providing the right services of use to our clients and we aim to see a repeat of that month’s success in the year ahead. Just as an example, during the year Etihad Cargo has expanded its freighter services to several new markets to capitalize on strong import and export demands between global financial centres and emerging markets. This has included the introduction of new weekly services to Dar Es Salaam and Entebbe in East Africa plus a three-times-a-week service to Hanoi in Vietnam. The introduction of these services are paying dividends and November was an example of that approach. How did you fare in December 2014 and how did you close the year? By securing over US $1 billion in revenue during the year, we demonstrated the strength of this area of the business. It has been a strong year of growth and one we can be proud of but there remains more to do in 2015 so we will not be resting on our laurels. We have made great strides in 2014 but also see further opportunities to capitalize upon.

Etihad Cargo will again break new ground in 2015 with the further development of its partner proposition linking the networks, products and infrastructures of the Etihad Partner airlines. How did the introduction of belly-hold capacities on 10 new passenger destinations in 2014 impact cargo take-off ? We significantly enhanced our global reach by offering belly-hold capacity on 10 new passenger destinations launched across Etihad Airways’ fast growing network during the year. These included destinations such as Medina in Saudi Arabia, Jaipur in India, Zurich in Switzerland, Yerevan in Armenia, Rome in Italy, Perth in Australia, Phuket in Thailand plus LA, Dallas and San Francisco in the USA, bringing to nearly 100, the total number of passenger destinations on which cargo services are currently provided. This availability expanded our capacity around the world but also increased our accessibility to markets that we want to be operating in and extending our services too. Because of where we sit in the world, our hub provides the perfect air bridge linking East and West, and that is demonstrated positively in the upsurge in cargo that we have seen. Etihad Cargo also expanded its freighter services to new markets in 2014. What were these and why were they selected? Etihad Cargo launched a new twice-a-week freighter service from Milan to Bogotá in Colombia, and from Bogotá to Amsterdam, following a partnership agreement that was signed with Avianca Cargo, the cargo division of the leading Latin American carrier Avianca. This new service reinforced our commitment to Milan where we already operate 4 weekly freighters linking this major Southern European gateway to our hub in Abu Dhabi and the network behind and beyond. Logistics News ME | February 2015 | 15

COVER STORY .....................................................................................................................

DAVID KERR, VICE PRESIDENT, ETIHAD CARGO

David Kerr joined Etihad Airways in 2010 in the senior Cargo Commercial role, becoming Vice President Cargo at the end of 2011 responsible for global revenues of $1.1 billion, 10 freighters and a team of over 250 staff as well as the Cargo Hub in Abu Dhabi. His career began at Unilever, after he had completed a degree in Economics at the University of Manchester in the UK. Joining the industry in 1995, David’s first job in aviation was at American Airlines (AA), in UK passenger sales, with a later role as regional manager passenger sales, Southern Asia-Pacific based in Singapore. He moved into the Cargo business in 2004, becoming Managing Director Cargo Sales, EMEA in London for AA before moving to Etihad Airways. Based in Abu Dhabi, David is married to Selina with 3 children.

Etihad Cargo is outperforming the global market, with an example being that we carried 144,498 tonnes of freight and mail during the third quarter, a year-on-year increase of nine per cent, on only one per cent capacity growth. The link-up with Avianca Cargo in Bogota offers integrated connections from the Northern Cone of South America offering alternative routings and improved connectivity to key and growing markets in the region. Avianca operate three hubs in South America including Bogotá; Lima in Peru and San Salvador in El Salvador and this particular link provided improved access for goods into Europe and to and from the Middle East. The service from Bogota to Amsterdam ensures the movement of perishable goods from the Americas that are highly demanded in Europe. The 747-400F that operates on these routes has a combined payload capacity of nearly 200 tonnes per week in both directions. Operated on behalf of Etihad by Atlas Air, this aircraft was the second of this type to enter service. This brought Etihad Cargo’s total freighter fleet to 10, which consists of four Airbus A330-200F, three Boeing B777F, and three Boeing 747F aircraft. Which are the Etihad Cargo freighter-only destinations across the globe where Etihad Cargo operates to? The airline also operates cargo freighters to 16 freighter-only destinations that include: Bogota (Colombia), Chittagong (Bangladesh), Dar Es Salaam (Tanzania), Entebbe (Uganda), Djibouti, Dubai World Central, Eldoret (Kenya), Guangzhou, Hanoi (Vietnam), Houston, Kabul, Miami, Quito (Ecuador), Sharjah, Tbilisi (Georgia) and Viracopos (Brazil). Our Hanoi service for example launched in the summer has now increased to 3 times weekly service reflecting increasing export demand from new production in the market, complementing the wide-body passenger service to Ho Chi Minh (the former Saigon) in the south. Do you plan to increase this freight-only network and where to? We have a strategic ambition to expand our freighter-only fleet in future but have not released further details to-date. At present, our focus is on delivering growth through our existing fleet. What are your high priority and high-yield destinations at the present time—please list the top 3? We see strong growth throughout our cargo and

16 | Logistics News ME | February 2015

passenger network. Details on the top performing routes however is commercially sensitive information. How significant is the cargo sector for Etihad Airway and what percentage of revenues does it account for? Etihad Cargo remains a critical part of the airline’s business and is comparable to around 20 per cent of passenger revenues.We see this continuing as we work with our partners to increase the cargo throughput at our hub in Abu Dhabi during the year, and build on our strategic position in the market. Etihad Cargo is outperforming the global market, with an example being that we carried 144,498 tonnes of freight and mail during the third quarter, a year-on-year increase of nine per cent, on only one per cent capacity growth. Talk to us about Etihad Cargo’s product offerings—FastTrack, SkyStables and Kabayan Box? Each product we develop and implement is a demonstration of how we are trying to meet our customers’ requirements. Fast Track is a Premium Service offering which includes priority handling and a Money Back Guarantee. Late acceptance and early release of shipments are the hallmarks of this service offering. The equine service SkyStables offers owners, breeders and equestrian organisations bespoke global transport arrangements on the cargo fleet of 10 Airbus and Boeing wide-body freighters. Horses can travel in dedicated stalls equipped with anti-slip floors, which are then loaded in temperature controlled sections of the aircraft. Throughout the flight, the animals can be attended to by their grooms, ensuring their arrival at destination ensures they are kept in a fit and healthy condition. The Kabayan Box was introduced at the request of the Filipino community working in the UAE and something Etihad worked together on with representatives of the Philippines Government. It demonstrates the way we are prepared to innovate as a business to meet passenger demand and individual needs. It is a dedicated personal freight service where packages of 20 kilos or 50 kilos can be sent by air to the capital of the Philippines, Manila.

COVER STORY .....................................................................................................................

2014 HIGHLIGHTS & ACCOMPLISHMENTS Etihad Airways has capped an incredible 12 months by unveiling its first Airbus A380 and Boeing 787 aircraft to more than 200 of the world’s media in Abu Dhabi. The doors to the airline’s two new flagship aircraft, in the distinctive new ‘Facets of Abu Dhabi’ livery, were opened for the first time to reveal the new cabin interiors, which include the ultra-luxurious Residence by Etihad™, the only three-room suite in the sky. Etihad Airways also unveiled a new cabin crew uniform at a spectacular catwalk fashion show. It’s the first major uniform relaunch since the airline’s formation in 2003 and incorporates the same colours used for the cabin interior and new aircraft livery.

James Hogan, Etihad Airways’ President and CEO, stated: “As we have done so many times in our short history, we are reshaping the landscape of modern air travel in our own way.” 2014 also saw 22 Etihad Airways cabin crew showcasing the new uniform which has been designed by Italian couturier, Ettore Bilotta. It combines elegance, comfort and practicality and the colours are derived from the new brand identity. Bilotta, in collaboration with the airline’s Guest Services and Guest Experience divisions, chose a warm chocolate brown as the base colour for the different uniform variations. The A380 will operate daily to London Heathrow from 27 December and the 787 to Dusseldorf from 1 February 2015. The entry

into commercial service of the A380 will see the introduction of The Residence by Etihad™, a new cabin that has captured the imagination of the air travel industry since it was unveiled in May 2014. The Residence by Etihad™ features a living room, separate in-suite shower room, and bedroom, and as another first in the airline industry, a dedicated butler. Admeasuring 125 square feet in total, The Residence by Etihad™ is located on the forward upper deck of the A380 and is for single or double occupancy. The A380 is also the only Etihad Airways aircraft to offer the First Apartment which is a complete living space with a reclining lounge chair and an ottoman, which opens up to become a separate 80.5 inch long fully-flat bed.

Logistics News ME | February 2015 | 17

While the service is for personal belongings only, there is no restriction on the number of Etihad Kabayan Boxes that may be booked. We will announce shortly an integrated product to further address the needs of our cool chain and pharmaceutical customers, building on service we provide in this sector today. What are your expansion plans for 2015? Currently Etihad Airways has a fleet of 110 aircraft and over 200 aircraft on order for delivery before 2025. As an airline, our expansion strategy remains focused on organic growth, codeshares and where relevant, we will continue to investigate minority equity investments in like-minded partner airlines. What new freighter aircraft did you acquire in 2014 and what are your plans for 2015? Etihad Cargo’s current fleet set-up provides the right mix to cater for the needs of our network. Looking ahead, we have one A330 scheduled for delivery in 2017 and another Boeing 777 aircraft for 2018. We are constantly reviewing our fleet strategy to align with the company’s development and those of our partners to ensure we are able to maximize on opportunities. How is Etihad’s network expansion with codeshare partners driving freight off take? We have seen some major synergies in Cargo on the cost and revenue side with our equity

18 | Logistics News ME | February 2015

partners. Working together on capacity programmes have seen the combined networks of each respective carriers enhanced. In turn we provided greater choice and flexibility to our mutual customers, aligning products and distribution where opportunities arise in local markets. As witnessed with our partnership with Avianca, both airlines share a common goal in working together in leveraging their networks for the benefit of their respective and mutual customers. It is a natural progression for us as a cargo operator but also an extension of the partnerships being formed by Etihad Airways and we see more opportunities to be gained by working closely our codeshare partnerships going forward. What potential do you foresee for Etihad Cargo in 2015? Our hub at Abu Dhabi airport hub is strategically well positioned and provides an essential air bridge linking East to West. The importance of the growth of markets such as China and India will be important to economies in the West and we believe we are well placed to build on the links we already offer. We are already operating in several strongly performing sectors including premium products, Fast Track, pharma and perishable goods, which we are confident will continue to provide a competitive advantage during 2015.

What challenges do you foresee for Etihad Cargo going forward? Etihad Cargo successfully cutover to a new cargo management system this month to provide its customers with greater communication and improved handling processes that reinforce its world-class cargo products and services. The new state-of-the-art air cargo management system was developed in partnership with Hermes Logistics Technologies to meet Etihad Cargo’s specific requirements and provides a complete and integrated IT solution that encompasses all the physical handling, documentation and messages, in realtime. As a wider industry issue challenges remain across core cargo systems; while message types and standards remain inconsistent. The safety and security of our cargo operation remains a number one priority and we will keep innovating our product offering and ways of working with our partnerships to ensure this. Growth in the Middle East market is encouraging and showing consistent growth, despite static global air freight volumes, so we are confident for the future. What are your short & long-term goals for Etihad Cargo for the foreseeable future? The Middle East market continues to expand strongly with a projected growth rate of 7.8 per cent built on increasing links into developing markets, and across key business sectors such as perishables.

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www.drakescull.com Logistics News ME | February 2015 | 19

Tender Invitation Etihad Airways recently invited ‘Expression of Interest’ (EOI) in the general press inviting tenders for designing & building a new Etihad Airways Cargo Terminal at Abu Dhabi International Airport. Etihad Airways is proposing to develop a new cargo terminal within the East midfield of Abu Dhabi International Airport to accommodate the growth

Etihad Cargo successfully cutover to a new cargo management system on 18 January 2015 to provide its customers with greater communication and improved handling processes that reinforce its world-class cargo products and services. The new state-of-the-art air cargo management system was developed in partnership with Hermes Logistics Technologies to meet Etihad Cargo’s specific requirements and provides a complete and integrated IT solution that encompasses all the physical handling, documentation and messages, in real-time.

20 | Logistics News ME | February 2015

of its operations due to proposed future expansion plans. The new facilities which will be built on land leased from Abu Dhabi Airports Company (ADAC) will enable Etihad Cargo to handle in excess of 2.5 million tonnes by 2025. The company has conducted a ‘needs analyses’ and completed a project brief for the overall requirements and

A key benefit of implementing the new system is that it ensures customers are better informed through real-time shipment tracking across Etihad Cargo’s global network, with updates being automatically forwarded to them on a regular basis. The handling and tracking of cargo shipments across the hub in Abu Dhabi is also enhanced and has become more efficient, with hand-held terminals being used to identify, track and verify all shipment details. David Kerr, Vice President, Etihad Cargo, commented: “The implementation

the envisaged requirements indicate 400,000 sq. m. of gross floor area which will be phased to allow operations to commence by 2017. Etihad Airways is currently in the process of completing the design scope for the project brief, which will be let on a Design & Build Consortium Arrangement including the material handling equipment.

of the new Hermes cargo management system is a very positive customer service enhancement that enables us to handle and transport our customer’s shipments more efficiently. It also means that our customers are provided with greater transparency, by being regularly advised and updated on the whereabouts of their shipment across the transportation chain.” To ensure a smooth transition to the cargo management system, Etihad Cargo has been closely monitoring its operation during the cutover stage and proactively advising its customers if there are any changes to their bookings.

A truck being loaded at Khalifa Port

A freighter being unloaded at Khalifa Port

Abu Dhabi Ports is implementing a brand new terminal operating system (TOS) which will enhance the general cargo operations at the emirate’s ports, significantly improving processing times and the full range of customer service offerings. The state-of-the-art port management software called ‘Master Terminal’ will replace Abu Dhabi Ports’ existing systems and support the management of all aspects of the general cargo operations, including bulk, break bulk, project and Roll-On/Roll-

Off (RORO) cargo. It will provide real-time information about cargo flows at any time of the day and improve the utilization of Port facilities, while increasing the visibility and productivity with regards to operations, planning and reporting procedures. “We selected Jade Software as our partner to install ‘Master Terminal’ because it is the best product to meet our requirements,” averred Gary Lemke, Executive Vice President, Ports Unit, Abu Dhabi Ports.

Logistics News ME | February 2015 | 21

..................................................................................................................... COMMERCIAL VEHICLES

COMMERCIAL VEHICLES Volvo Trucks trundling along

Volvo Trucks’ terrestrial success is replicated in its sponsorship of its namesake Volvo Ocean Racing, ensuring a high profile for the brand both on land and at sea.

22 | Logistics News ME | January 2015

COMMERCIAL VEHICLES .....................................................................................................................

Volvo Trucks are on a roll and the company continues to register voluminous growth in the Middle East. The Gothenburg, Sweden, based world’s second largest manufacturer of heavy trucks has had a lot of traction and mileage in 2014 with impressive sales performance across the region during the past year. It recently announced a 24 % increase in deliveries and 27 % increase in parts sales year on year for 2014 across its 13 active Middle East markets. The UAE, Saudi Arabia, Oman and Iraq led with the highest percentage growth. The announcement came a year after the Swedish premium truck manufacturer, with a global network of 2,100 dealers in excess of 140

Forsbergh, speaking glowingly of the brand. “We partner with a network of our trusted and long-established agents across the Middle East who are extremely knowledgeable about their territories and competent to provide customized trucking solutions depending on customer requirements,” added Forsbergh, explaining the success of the brand in the region. “The Middle East is very vital for Volvo Trucks and is one of our fastest growing regions. We foresee plenty of potential and growth in time,” affirmed Forsbergh who is upbeat about the region. He also attributed the surge of the brand to the spurt in construction activities across the region but specifically in the UAE and

LARS-ERIK FORSBERGH, PRESIDENT, VOLVO TRUCKS MIDDLE EAST

“Our sponsorship of the prestigious Volvo Ocean Racing, now a regular fixture and one of the most-looked forward-to events in the world of high-speed sailing, has provided Volvo Trucks a high profile globally.”

countries globally, unveiled three new, top-of-therange models—the FH, FM and FMX models in the biggest truck launch ever held in the region in January 2014. Lars-Erik Forsbergh, President, Volvo Trucks Middle East, is clearly a very pleased man and spoke expansively to Logistics News Middle East on the terrace-deck of the Volvo Pavilion at the especially erected Racing Village in Abu Dhabi Marina for teams participating in the Round-theWorld Volvo Ocean Race on the conclusion of the second leg of the races from Cape Town, South Africa. “Volvo Trucks are trust-worthy, well regarded in the Middle East as elsewhere for their sturdiness, coping with the toughest climactic and terrain conditions in the region, performance, capabilities, reliability, fuel efficacy and safety. They enjoy an excellent reputation and are trusted by our buyers and users”, averred

Saudi Arabia and investments pouring into this sector. Flexible financing options and after-sales care packages designed to maintain output and trick efficiency were also cited as reasons for the growth of the brand. According to Forsbergh, the brand’s on-going best-seller, the FH, led sales in regional markets with significant fleet deliveries made to customers in the UAE, KSA, Oman and Iraq, accounting for more than 70% of overall regional sales. Volvo Trucks has also broken new ground with a flurry of deals and deliveries in several Middle Eastern countries. The most significant deals completed in 2014 included a delivery of 250 FH tractor heads all equipped with I-Shift gearboxes to a major construction firm in Dammam, KSA, and a delivery of 100 FH tractor heads, all equipped with I-Shift, to a

OCEAN RACEBOARDROOM INTERFACE Ashridge Business School joined forces with the Abu Dhabi Volvo Ocean Race in a bid to uncover the key learnings that could be taken from leadership of high-performance teams in the World’s toughest ocean race and applied to the world of business here in the UAE. Ashridge Business School spent months locked into the work of the tenacious Volvo Ocean Race Abu Dhabi crew, including proud Emirati helmsman and trimmer Adil Khalid, who with the rest of the team has raced in some of the most grueling ocean conditions known to man, while researchers drilled down to the vital dynamics of a successful highperforming team. Months of painstaking research revealed leaders in high-performing teams in sport and business need to move fast and seize the moment and build great relationships. Logistics News ME | February 2015 | 23

A S I A S U P P LY C H A I N I N S I G H T S .....................................................................................................................

Mark Millar

Ocean Race Logistics GAC Pindar’s dedicated 11-member, full-time, logistics team provides comprehensive logistical and customs clearance services at each of the 11 ports along the itinerary. At every port of call along the way, the original race village from Alicante where the races commenced were and will be safely re-built, including Abu Dhabi on the second leg of the races, where the teams intermitted during their sojourn between 12 December 2014 and 2 January 2015. According to Lukas Jonsson, GAC, On Ground Team Manager, Volvo Ocean Race, the Abu Dhabi Racing Village was constructed on time and without a glitch. 112 race village containers arrived through Khalifa Port, Abu Dhabi and departed via Jebel Ali Port in Dubai complying with two different sets of customs officials and two sets of paperwork.

construction company in Dubai, UAE. In Muscat, Oman, an order of 80 trucks was delivered including a mix of FH tractors, 50% of which were equipped with I-Shift, and concrete mixers to a construction company. Iraq Volvo Triucks delivered 282 FMX units to Baghdad Municipality, which included a mix of FMX and rigid trucks equipped with different types of superstructure, including vacuum tankers, garbage compactors and Tipper bodies. A further 100 units of FH tractor heads with flatbed general cargo semitrailers, were delivered to the Ministry of Transport in Baghdad. The UAE and Iraq specifically, reported the highest percentage growth with increases of 49% and 67% respectively. 2015 is also looking very promising for Volvo Trucks in the Middle East with more anticipated demand and Forsbergh revealed the company was in expansion mode with more investments planned for the region 24 | Logistics News ME | February 2015

including the enlargement of the company’s existing manufacturing facilities in the Kingdom of Saudi Arabia. Volvo Trucks are assembled across 14 countries worldwide. The company delivered over 116,000 trucks worldwide in 2013. The interview was conducted against the backdrop of the seven team yachts moored alongside the Abu Dhabi Marina and Forsbergh also commended the company’s participation and involvement in the 9-month long odyssey. The 12th 2014-2015 edition of the 38,739 nautical miles (71,745 kms), gruelling, round-Volvo Ocean Racing across 5 continents and 11 ports, began in Alicante in Spain on 19 October 2014 and is expected to conclude at the Gothenburg Port in Volvo Trucks’ home base in Sweden in June 2015. So what is the nexus between Volvo Trucks and Ocean Racing? “Our sponsorship of the prestigious Volvo Ocean Racing, now a regular fixture and one of the most-looked forward-to events in the world of high-speed

sailing, has provided Volvo Trucks a high profile globally. The concept of teamwork is vital and indispensable whether on a yacht in choppy and stormy waters under inclement weather conditions in the middle of the vast oceans or in a truck in tough terrain in the remote land interior,” observed Forsbergh, offering a vindication of the association of the truck manufacturer with this arduous, highly demanding and hugely challenging ocean racing event. “At Volvo we completely understand these circumstances and need for perfection and infallibility to the extent possible and work as a team to completely eliminate or considerably lessen the likelihood of breakdown or undesirable interruptions with our highly dependable, time-tested vehicles that meet impeccable standards of quality and performance even in the most severe conditions and offer customers an excellent investments and true value-formoney,” he added.

CHEMICALS LOGISTICS .....................................................................................................................

RSA-TALKE, DOW CHEMICALS SEAL DEAL (L to R): Richard Heath, Andreas Schmitt and Abhishek A Shah at the signing ceremony

The Dow Chemicals Company and RSATalke recently signed a warehousing contract for the storage of petrochemical products that will be marketed by Dow Chemicals from Sadara Chemical Company, a joint venture between Dow and Saudi Aramco in the Kingdom of Saudi Arabia. The deal involves the addition of a bespoke 10,000 sq. m. warehouse for petrochemical products in Dubai. It is located on the same premises as the RSA-Talke›s dangerous goods warehouse which opened in early 2014 at the Aerotropolis known as Dubai World Central (DWC). This second warehouse complex at Dubai World Central has been designed to mainly

store petrochemicals. With the building of the new warehouse, RSA-Talke—a joint venture between RSA Logistics and the German Talke Group, serves the demands of customers from the chemical and petrochemical industries in the Gulf region. This is borne out by the choice of the warehouse by Dow Chemicals for its products from Saudi Arabia. “The strong demand from the up-and-coming chemical and petrochemical industry in the Gulf region has confirmed our strategy of expanding our portfolio of specialized logistics services,” explained Richard Heath, Director Middle East & Asia, Talke. “We are delighted about the signing of the

contract with Dow for their flow of petrochemical products from the Sadara plant and see this significant agreement as a confirmation of our strategy in Dubai,” observed Abhishek A Shah. Dow has established a solid presence in the Middle East petrochemicals industry, partnering with leading regional companies like RSA-Talke to set up state-of-the-art petrochemical complexes across the region. The planned new construction of a large container terminal for chemical goods in the Jebel Ali free zone (JAFZA) will be a highlight of this RSA-Talke logistics & storage partnership with The Dow Chemicals Company.

Logistics News ME | February 2015 | 25

PACKAGING .....................................................................................................................

The 118-year old Midland, Michiganheadquartered Dow Chemicals Company (Dow) is one of the largest manufacturers of plastics, chemicals and agricultural products. Dow, a plastics technology leader, operates in approximately 180 countries globally and its integrated, market-driven, industry-leading portfolio

of specialty chemical, advanced materials, agro-sciences and plastics businesses delivers a broad range of technology-based products and solutions to customers in high growth sectors such as packaging, electronics, water, coatings and agriculture. Logistics News Middle East spoke exclusively to Dubai, UAE-based Ahmad

Kawas, Sales Director, Dow Packaging & Specialty Plastics in Middle East, Africa & Turkey, on a host of issues relating to the packaging industry as well as hot-button topics including food waste and loss, littering, the global marketplace, sustainability, the environment among much more.

What is the extent of Dow’s involvement market-driven innovation model is Pack driven by major shifts in population with the global packaging industry? Studios, Dow Packaging & Specialty Plastics’ demographics, improving socioeconomic Dow is one of the world’s largest packaging collaboration capabilities consisting of a global status in emerging geographies, consumer material suppliers with innovative technologies network of labs, experts and collaboration tools and brand owner demand for increased and capabilities that enable collaborative that provides customers and value chain consumer convenience, and efforts to reduce solution development. members a unique and advantageous position food waste from farm to table. We combine core strengths of R&D, to accelerate the development of nextFor Dow Packaging & Specialty Plastics, technical support, worldwide geographic reach, generation packaging solutions. plastic packaging represents a significant broad product lines and industry expertise to Our global footprint with manufacturing business with approximately 30% of its sales deliver sustainable solutions, products and facilities across the world and commitment to in the Europe, Middle East and Africa applications for multiple plastics and adhesives investing in R&D helps us deliver high-class region. Additionally, large scale investment markets. Focusing on flexible and rigid food technologies to support the evolving needs of projects in the Middle East and the U.S. Gulf packaging, secondary and tertiary packaging, our customers. In 2013, Dow invested $1.7 Coast will open up high-volume supply medical packaging, channels of diversified and adhesive polyethylene growth Dow’s continued growth in the food and specialty packaging market applications, Dow is with a highsector is the result of more market-driven strategy and an innovative a leading innovator performance product and technology-led organization. on solutions for mix starting in 2015. better packaging. How is the use of What, in terms of lightweight material innovation, technical development & billion in R&D and Dow Packaging & changing the dynamics of the packaging ingenuity is Dow’s contribution to the Specialty Plastics averages 40 new products industry? packaging industry? launches each quarter – driven by innovations The continued growth in demand for Innovation is critical to keep pace in this fast in packaging. lightweight plastic packaging will be a key moving and highly-competitive marketplace. trend in the consumer flexible packaging Our ability to deliver unique customer products How significant is the global packaging market for years to come. Driven by the and solutions through innovation and industry for Dow generally and the Middle demand for greater convenience, costapplication development is a rich part of Dow’s East in particular? effectiveness and sustainable products, we will heritage and continues to define and Dow Packaging & Specialty Plastics serves increasingly see brands offer flexible pouch differentiate us. the global plastic packaging industry as one packs with innovative shapes, closures and At Dow, we innovate through value chain of the largest materials suppliers for this fast- dispensers to complement or replace its collaboration. Suppliers, convertors, machine growing packaging segment worth between $ traditional rigid plastic bottle formats. manufacturers and brand owners alike need to 600 and $ 700 billion worldwide. The PacXpert™ packaging technology is a be in the same universe, talking, exploring ideas Flexible packaging represents around 15% great example. This innovative packaging and working together. of the global packaging industry and is technology offers the transition from traditional A key platform we recently created for this growing annually at 4.5%. This growth is rigid containers to flexible packaging pouches 26 | Logistics News ME | February 2015

PACKAGING .....................................................................................................................

Food spoilage is a major contributor to the food waste problem. With the population expected to grow by 9 billion by 2050 (FAO), it is important that brand owners and packaging manufacturers work together to institute the solutions that will conserve resources for future generations.

between 2-20 liters in size. Foam films are an interesting alternative for lighter packaging in consumer flexible packaging applications, offering up to 20% light-weighting and 18% material costs savings. What is Dow doing to ensure the long-term sustainability of the packaging industry worldwide? The biggest challenge is understanding how to best maximize sustainability performance across the entire lifecycle of the package/ product combination. The most sustainable packaging is packaging that makes the entire value chain more efficient by protecting the product inside the package from spoilage, contamination, or damage. Through innovation, industry collaboration and expertise, we can build solutions that improve the human experience and further sustainability goals. Describe the growth of Dow in the packaging sector in the recent past? Dow’s continued growth in the food and specialty packaging market sector is the result of more market-driven strategy and an innovative and technology-led organization. We have increased our downstream focus on value chain engagement to ensure we are the ‘first choice’ collaborator on packaging solutions in higher-value applications, supported by new collaboration capabilities such as ‘Pack Studios’ to accelerate innovation. We are enhancing our footprint in the emerging regions such as Asia Pacific, Middle East, Eastern Europe and Africa with dedicated commercial and technical service and development teams to support local customer needs. We now have offices located in 14 countries across the Middle East, Turkey and Africa, led from our regional hub in Dubai. Dow’s holistic packaging solutions are designed to respond to consumer’s needs while increasing customers’ competitiveness in the marketplace.

What can Dow do or doing to combat environmental problems such as littering? Litter and marine debris are an industry-wide challenge. Detrimental to the environment, these are mainly caused by wrong behavior or accidental discharge and we all have a responsibility to act towards changing the status-quo. Dow as a leading plastics industry player has joined the efforts of plastics producers to help address the problem of marine litter. Litter and marine debris can only be eliminated or reduced if all stakeholders accept their share of responsibility and focus on real solutions such as education, outreach advocacy, technology, infrastructure and enforcement. It is also widely estimated that over one-third of the world’s food is wasted---what is Dow doing to preserve food better & longer? Food waste is a real issue, but it is something we can all work to reduce. The amount of food that is lost annually is about $ 750 billion, this equates in 1.49T of food per year per capita of undernourished people being wasted, or 4 kilograms of food per day per capita. Food spoilage is a major contributor to the food waste problem. Dow Packaging & Specialty Plastics is working to solve this issue by creating solutions that help food stay fresh, longer. With the population expected to grow by 9 billion by 2050 (FAO), it is important that brand owners and packaging manufacturers work together to institute the solutions that will conserve resources for future generations. As one of the major suppliers to the food packaging industry we are actively engaged in global industry initiatives such as Save Food pioneered by the FAO to fight global food loss. Our innovation pipeline focuses on the development of next generation packaging materials which support the reduction of food waste and increased packaging efficacy. Dow’s resins for flexible stand-up pouches are one example. These resins use less material

AHMAD KAWAS, SALES DIRECTOR, DOW PACKAGING

Ahmad Kawas is the Sales Director for Dow Packaging and Specialty Plastics in Middle East, Africa and Turkey based in Dubai, United Arab Emirates. Kawas began his career with Dow in early 2010 as an account manager for Dow’s Basic Plastics business, covering the Middle East, Africa and Turkey from Dubai. His responsibilities included expanding the geographic presence of the plastics business across Middle East, Africa and Turkey with key customers. He added responsibilities for sales and marketing for Dow Elastomers business later in 2011.

to package items such as soups, baby food and baking ingredients, locking in nutrients to form a barrier against ripening agents or molds that cause food decay. Other solutions include our tie layers and barrier multilayer films that help improve package integrity preventing food spoilage and protecting goods during transportation. For example, Dow›s thin foamed films allow for up to 20% materials savings while maintaining package performance, and our improved sealing solutions help reduce food waste through increased package integrity. Logistics News ME | February 2015 | 27

PACKAGING .....................................................................................................................

Global food packaging solutions company Tetra Pak offers a wide range of different products in different markets. The 1943-founded company by Swedish entrepreneur Ruben Rausing has dual

headquarters in Lund, Sweden and Pully, Switzerland. Tetra Pak is the largest company of its kind in the world and operates in over 170 countries globally. Amar Zahid, President, Greater Middle

East & Africa, responded exclusively to a questionnaire by Logistics News Middle East and explained the company’s ethos, its provenance, capabilities, accomplishments, growth and its outlook for the future.

Global food packaging solutions company Tetra Pak offers a wide range of different products in different markets. The 1943-founded company by Swedish entrepreneur Ruben Rausing has dual headquarters in Lund, Sweden and Pully, Switzerland. Tetra Pak is the largest company of its kind in the world and operates in over 170 countries globally. Amar Zahid, President, Greater Middle East & Africa, responded exclusively to a questionnaire by Logistics News Middle East and explained the company’s ethos, its provenance, capabilities, accomplishments, growth and its outlook for the future.

Tetra Pak and we have been growing steadily since commencing operations in the region. Last year, the company delivered close to 28 billion packages of safe and nutritionally sound food and drink products for this region’s growing population. Tetra Pak operations are three-pronged: 80 percent packaging, 10 percent processing and 10 percent technical services. Innovation deployment, and working in partnership with customers to support and grow their business is one of our key priorities. In 1956 our first Tetra Pak filling machines were installed in Maghreb; in 1964 the First Tetra Classic Aseptic machine outside Europe was installed in Lebanon; in 1971 the first filling machine was installed in Turkey and in 1983, Tetra Pak the converting factory began operations in Pakistan.

Lahore in 2011. Spread over 150,000m2, the new factory is Tetra Pak’s largest facility in the Middle East and is World Class Manufacturing (WCM)-certified. This reflects the company’s continued commitment to customers and consumers in the region.

In general terms, how is the Packaging currently faring in the Middle East and what is your take on its future potential? Tetra Pak has been operating in the Greater Middle East & Africa region for 50 years developing long-standing partnerships with many customers. This region is one of our biggest markets and we have delivered close to 28 billion packages last year. Major markets in terms of volume and growth include South Africa, Saudi Arabia and Turkey with growth rates of four to six percent. Among our categories, liquid dairy products, juice, nectars and still drinks enjoyed a healthy average growth of 5% for the past five years, which is a strong growth compared with global juice, nectars, still drinks and liquid dairy products growth rates of 3%. In general, the future potential of a market lies in its population and since the region is expected to reach 220 million people by 2020, we see great potential here in the future. Trace the growth of Tetra Pak Middle East since its inception and how have you fared thus far in 2014? Historically, the Greater Middle East and Africa has been a significant growth area for 28 | Logistics News ME | February 2015

What is your outlook for 2015 for Tetra Pak in the region? As one of the world’s emerging markets, with a fast growing population that is young and aspirational, this region will continue to develop. On-the-go consumption habits are also increasing. We have established partnerships with over 400 customers in the region and believe that together we can grow the market and provide innovation and convenience to consumers. High potential markets such as Egypt and Pakistan enjoyed double digit growth over the past 5 years; Pakistan grew 10% and Egypt 13%. What are the expansion plans for the future? We are committed to making investments that will boost our growth in this region. One example is the EUR 60 million technology upgrade that was made in our Izmir, Turkey factory in 2014. The three-year project enabled us to double our production capacity to reach 10 billion packages per year. In addition to that, we also inaugurated a state of the art factory in

Comment briefly on the logistical aspects of the trade—how is Tetra Pak doing on the manufacturing, supply side, deliveries of goods? Having been present in the region for 50 years, we have 21 sales offices and five manufacturing plants which are located in Jeddah, KSA; Izmir, Turkey; Lahore, Pakistan; Pinetown, South Africa and Nairobi, Kenya. Describe your customer profile and what are your fastest-selling product categories in the region? Having developed long-term partnerships with over 400 customers, our customers are some of the biggest and most popular brands in the region, producing a wide range of products from white milk to juice, nectar, still drinks, ice cream, cheese and tomato paste – demand for which continues to grow. Cheese, for example, has been a remarkable success story, enjoying an annual average of 17 percent growth in the past five years to represent 88 percent of Tetra Pak’s global sales in this category, mainly driven by Egypt. Another interesting segment is tomato paste which consists of over half a billion Tetra Pak packages, and is driven by the Saudi Arabian market. White milk and flavoured milk also continue to enjoy growth rates of 7 to 9 percent per annum within our region. What sets Tetra Pak apart in the packaging business? Tetra Pak is a total solutions provider. We have the world’s largest portfolio of carton packages with more than 230 package types, a huge

PACKAGING .....................................................................................................................

Tetra Pak is a total solutions provider. We have the world’s largest portfolio of carton packages with more than 230 package types, a huge range of sizes, functionalities and openings - over 7,000 combinations - and 21,000 graphic designs every year. The possibilities are virtually endless.

range of sizes, functionalities and openings over 7,000 combinations - and 21,000 graphic designs every year. The possibilities are virtually endless. In addition to our carton packages, we have a wide portfolio of technical service solutions, processing equipment, and team of dedicated experts and specialists to help customers at every stage of their product development. We are an environmentally responsible company offering environmentally preferred packaging and processing systems. For example, one of Tetra Pak’s processing solutions is an environmental initiative to use less water. This is particularly relevant for the GME cluster where water scarcity is already a real challenge. Given strong environmental concerns, how can the packaging business be made more eco-friendly and sustainable? At Tetra Pak, we believe that good environmental performance is the key to a successful business. We offer environmentally preferred packaging and processing solutions for our customers with the aim to reduce the environmental footprint throughout the industry value chain. Our plants in Izmir (Turkey), Jeddah (KSA) and Lahore (Pakistan) are some of the most efficient Tetra Pak plants, producing the lowest amount of the waste in the world. For this region, in particular, our strategy is to double the recycling rates by partnering with local recyclers. Our current levels of recycling cartons in the region stand at 21.2% percent. We also have a number of environmental education initiatives with communities, schools and our current customers in the region that are running in the UAE, KSA, Iran and Turkey. Our initiative ‘Little Things Renew Nature’ has reached over 1 million children since 2004 and focuses on educating the younger generation about resources management and recycling. Our promise to ‘Protect What’s Good’ is not only to ensure the safety of the food and drink we consume but also to minimize our impact on the environment. Our ultimate vision is to provide fully sustainable packaging and leave minimal environmental footprint with zero waste.

It is worth mentioning that our three factories and nine market companies in the region are all Forest Stewardship Council (FSC) certified. At Tetra Pak, we aim to deploy more FSC certified packages in the region, and have a responsible procurement programme for paperboard with the goal of only using wood from forests that are certified as well-managed. What are the challenges facing the Packaging industry today and how is Tetra Pak meeting these challenges and the packaging needs of the future? Climate change, energy sources, use of material resources and disposal of waste are the challenges that we face in this day and age. Interestingly enough, these are also becoming more and more important items on the general consumer’s agenda. We see this as an opportunity for Tetra Pak’s cost driven innovations to truly come to the fore in offering our customers solutions such as automation advances, faster line speed, savings on water and electricity for processing and packaging, as well as new packages with better functionality without an increase in cost. We have identified four key areas of focus for Tetra Pak’s customers, and all are addressed within our Innovation for Growth theme. These comprise: increasing revenues; reducing cost; building brand equity and minimizing risk. What is the long-term vision for Tetra Pak ME? We want to continue working collaboratively with our customers to ensure maximum productivity, minimum downtime, and the quickest turnaround of product delivery, from concept to completion. We are committed to innovations that drive growth. We set goals for continuous improvement in our development, sourcing, manufacturing, and transportation activities. As part of that commitment, Tetra Pak take a long term and life cycle view, continually improving environmental performance, communicating openly with stakeholders and reporting regularly on performance.

AMAR ZAHID, PRESIDENT OF TETRA PAK GME&A

Amar Zahid is the President of Tetra Pak’s Greater Middle East & Africa (GME&A) region, having been appointed in July 2014. Based in Dubai, he is responsible for overseeing the company’s operations across these geographies, working closely with the regional offices and focusing on the company’s growth agenda. A veteran of the company, having joined Tetra Pak in 1994. In 2003, he was appointed as Regional General Manager and in 2007 as Managing Director of Tetra Pak Arabia. In 2010, Zahid moved beyond the Middle East to assume the role of Managing Director for Tetra Pak’s operations in Japan and President of Northeast Asia and Oceania, responsible for a number of markets in that region.

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PACKAGING .....................................................................................................................

Neil Watson Logistics Director, ADT

Neil Watson Logistics Director, ADT Neil Watson joined Abu Dhabi Terminals (ADT) in 2012 as General Cargo Manager and was promoted to Logistics Director in October 2013. In this role, he is responsible for key account management and growth of ADT’s logistics business, supply chain and warehouse solutions.

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Packaging Perspectives: Taking the Wraps Off Can we imagine a world without packaging? The industry permeates every facet of our lives and is indispensable to the manufacturing, production, retailing and promotional processes of every industry. It is after all part of the product mix and a vital, central marketing tool. The need for good packaging is paramount to all manufacturers and retailers as it is designed not only preserve the integrity of the product—preventing pilferage, contamination, breakages and ensuring safety but also serves to embellish, attract and enhance product appeal. The colossal, multi-billion dollar global packaging industry is at the cross roads as it sets to redefine itself in the face of flak and challenges from environmentalists, ecologists and naysayers. The industry is increasingly under the scanner to become more proactive, ingenious, inventive and environment-conscious. The worldwide packaging industry thus finds itself on the frontlines and threshold of a global debate on what it can and should do to make and use products that are recyclable, bio-degradable and promote environmental conservation and sustainability. The industry is under growing pressure to find solutions that would make product usage more eco-friendly and cost-effective. Can the industry rise up the challenges it confronts? Logistics News Middle East talks to some prime players in the industry to assess their take on where the industry is headed towards.

Borouge, a leading name in innovative, value-creating plastics solutions, partially opened recently, the company’s new packaging facility at Khalifa Port (KP) in the presence of senior management representatives of the Abu Dhabi Terminals (ADT), manager and operator of Khalifa Port Container Terminal (KPCT), and Abu Dhabi Ports Company (ADPC). Led by Rashed Saud Al Shamsi, Petrochemicals Director at ADNOC & Chairman of Borouge, the assembled delegations witnessed a partial launch of Borouge’s new packaging facility at Khalifa Port which aims to support and accelerate the process of exporting Borouge’s products to its customers around the world. Based on a joint agreement signed between Borouge and ADT in June 2014, the Borouge’s state-of-the-art packaging facility was designed and constructed by ADT to facilitate the packing of Borouge’s products at Khalifa Port ready to be exported to customers in their locations and ensure more flexibility to the company’s supply chain network. “Operating our new packaging facility at Khalifa Port embodies our commitment to ensure better, safer and faster distribution of our products,” stated Abdulaziz Al Hajri, CEO Abu Dhabi Polymers Company (Borouge). Supported by the excellent location

PACKAGING ..................................................................................................................... within Borouge’s logistic network and the right connectivity along with ADT’s operational excellence, Khalifa Port is a vital gateway for Borouge’s products. Having a dedicated packaging facility with a total capacity of 385,000 metric tonnes will significantly enhance Borouge’s supply chain network. “We are pleased to welcome the launching of operation at Borouge’s new packaging facility at Khalifa Port which confirms the significant efficiency of Borouge’s supply chain business in imports and exports,” asserted Captain Mohamed Juma Al Shamsi, CEO ADPC. Borouge’s new packaging facility at Khalifa Port confirms the strong collaboration between Borouge and ADT. The new facility starting to pack Borouge’s products will benefit from the state-of-the-art

Vishaal Shah, CEO, Panache International

Panache International, the manufacturers of a wide range of packaging products for everyday use, was established in 2005 in the UAE and has since tripled its production capacity to meet escalating demand. Sales revenues have grown six-fold. The company’s highly equipped facility in Dubai’s International Production Zone (IMPZ) is capable of producing 6 million high-quality plastic cups every day, the equivalent of three 40-foot high cube containers daily.

logistics services and advanced technologies provided by Khalifa Port. Logistics News Middle East spoke exclusively to Neil Watson, Logistics Director, Abu Dhabi Terminals (ADT), on this occasion What are the implications of and how will ADT cope with the extra capacity & demand on its services following the launch of the new packaging facility in conjunction with Borouge? The partial opening marked the successful achievement of a concept that was discussed between Borouge and ADT over 2 years ago. The packaging facility was designed and constructed by ADT to facilitate the packing of Borouge’s products at Khalifa Port and ensure more flexibility to Borouge’s supply chain network. From the initial idea, both organisations worked as partners to fully develop the

With its own distribution centre in the UK, Panache International caters to 14 countries in the GCC, Africa, Russia, Europe, Australia and the Indian subcontinent. The company has also recently started exporting to locations in North America. Logistics News Middle East met Vishaal Shah, CEO, Panache International for an exclusive interview. How is the Packaging industry currently faring in the Middle East and what is your take on its future potential? As the global economy is evolving and as consumers have a variety of products to choose from, packaging is playing an important role in consumer buyer behaviors and also influencing consumers on what product to buy. Packaging creates a brand value and a perception of the brand which is extremely important for the Middle East; this is taking a high priority as the markets are maturing rapidly. How would you characterize the growth of Panache since its inception and how have you fared thus far in 2014? Growth of Panache since its inception has

packing solution in Khalifa Port. For that reason the anticipated volumes and the impact on ADT’s operations were factored into the long-term capacity planning from the start. The packing plant is fully integrated into the operations of Khalifa Port Container Terminal (KPCT), thus making full use of the benefits that are derived from the high level of automation and system flexibility and capability that ADT has developed. This means that in terms of infrastructure and processes, the addition of the packing plant has already been anticipated and factored into ADT’s operations from before the first bag was packed. Supply chain management is a key pillar to ADT’s growth and this important milestone confirms our commitment to work closely in partnership with our clients to build innovative logistics and warehouse solutions.

been mainly influenced by innovation, flexibility and quick response and adaptation to changes in consumer needs and ensuring to introduce better products. The last three years have been a major acceleration and we still continue to grow by double digits every year. What are the expansion plans for the future and the long-term vision for Panache? Panache is currently focusing on diversifying into other product lines such as aluminum and paper products. The long term vision for Panache is to be a household name in the entire Middle East and Africa by providing a ‘one-stop-shop’ solution for every requirement regarding hygiene, packaging and food service. Please describe your customer profile and what are your fastest-selling / moving product categories? Our customers are a combination of ice cream companies, dairy companies, caterers and restaurants to retail chains and distribution companies. Our biggest sellers are the water cups, food containers and disposable plates. Logistics News ME | February 2015 | 31

PACKAGING .....................................................................................................................

Can-Pack clearly does not mind holding the can. It is after all the business they are in. Can-Pack Group, the world renowned manufacturer of aluminum beverage cans, marked the official inauguration of its new manufacturing plant at Dubai Investments Park today. The launch coincided with the 25th anniversary of the Can-Pack Group. The 150,000 square feet facility with a daily production capacity of 1.75 million cans is the Group’s second manufacturing plant in the area. The facility will also serve as a warehouse and distribution centre for the Group. The inauguration ceremony was attended by several prominent guests, including HE Sultan Bin Saeed Al Mansouri, UAE Minister of Economy; HE Prof. Adam Krzymowski, Ambassador of the Republic of Poland; Philip Impink, President and CEO, Can-Pack Group; Michal Sloniec, Managing Director, Can-Pack Middle East and Peter Giorgi, shareholder of Can-Pack Group. Speaking at the inauguration, Philip Impink, CEO, Can-Pack 32 | Logistics News ME | February 2015

Group affirmed that this manufacturing plant would better serve their customers in the area spread out from Morocco, Tunisia & Egypt in North Africa, Kenya, Turkey, Romania, Poland, Afghanistan, the GCC countries and India, Pakistan, Sri Lanka and Bangladesh in the Indian subcontinent. Logistics News Middle East spoke exclusively to Michal Sloniec, Managing Director, Can Pack Middle East, on the sidelines of the inaugural ceremony. “The Middle East-North Africa market is very significant for Can-Pack and at US $ 15 million in sales revenues accounts for approximately 15 % of our global annual sales turnover,” he declared. The new US $ 54.8 million manufacturing plant will further augment a total capacity of 5 million cans per day, up from the 3.2 million daily previously with the original US $ 82.2 million facility already in operation. Our cumulative US $ 137 million investment is already beginning to pay dividends with increased production meeting increased

demand and we already have plans to further expand capacity in 2015 to 6 million cans per day, given the growth of the local population and also the influx of expatriates into the region. That expansion alone is expected to cost around US $ 20 million. From our base in Dubai we oversee manufacturing across three other production centres— Casablanca, Morocco; Aurangabad in Maharashtra State, India and Cavite in the Philippines,” observed Sloniec. Beverage heavyweights CocaCola, Pepsi and Aujan Industries in the GCC are Can-Pack’s major clients in this region noted Sloniec and to ensure its products remain environmentally friendly, Can-Pack only uses water-based paints and varnishes that eliminate the negative impact of printing and varnishing on the natural environment. Providing the backdrop to the establishment of Can-Pack in the region, Sloniec stated that the CanPack Group first entered the Middle East in 1999 by establishing Arab Can Company, a metal cans assembly plant located in Sharjah.

“The company, operating on its own, first established a branch in DIP in late 2004 and later centralized its manufacturing and distribution operations in Dubai to facilitate logistics,” he indicated. “To streamline the raw material turnover and optimize inventory, Can-Pack established two more companies in UAE. Can-Pack ME DMCC, operating out of Dubai Multi Commodities Centre in JLT area serves as a regional financial hub for the company as well as the new Can-Pack ME FZE, a 150.000 square feet warehousing and distribution centre located in Jebel Ali Free Zone South,” he explained. Can-Pack Middle East, a subsidiary of Can-Pack SA, currently employs 350 employees from over 10 nationalities. The company is based in the Polish second-biggest city of Krakow, Poland and recently completed 25 years since its operations started in 1989, under the name of Pol-AmPack. The company has 38 plants located across Europe, Middle East, North Africa and Asia built over last 25 years.

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DRIVING SALES AND BRAND LOYALTY BY PRAKASH ‘PK’ MENON

Despite the surge in global online retail sales and the desire of today’s consumers to shop anywhere, anytime and from anywhere, brick and mortar stores are here to stay. Why? Simply because as human beings, we will always want to touch, feel and smell before we buy. We love the ambience and the personal contact that an online experience fails to deliver. So while online sales have undisputedly had an impact on the bottom line of bricks and mortar retailers everywhere, the value of the instore experience remains high on the list of wants for most shoppers. Perhaps nowhere in the world is the in-store experience more important than in the UAE where the promise of a shopping experience like no other has created a niche retail tourism market that lures travellers from all over the world. Now on the back of Dubai’s

successful Expo 2020 bid, all eyes are on UAE retailers to raise the bar in terms of how they connect and engage with today’s consumer. Now, there is growing evidence to suggest that many are jumping on the bandwagon to adopt the latest emerging technologies well ahead of the Expo. One of the in-store strategies increasingly chosen by retailers all over the world is the use of digital signage. When used as part of an omni-channel strategy, digital signage helps create an integrated and personally relevant brand experience for customers. The ultimate goal is for the shopper to become a customer who then becomes a fan who’s happy to spread the word about their great shopping experience with others. What’s an omni-channel retail strategy?

Omni-channel retail strategies are designed to align in-store, online and mobile shopping activities with a customer’s personal buying preferences. The aim is to deliver a seamless experience between offline and online channels. So in a typical omni-channel approach, the mobile app matches the look and feel of the website, which also reflects the look and feel of the store. Far from being just about promoting current specials in order to achieve more sales today, the best omni-channel strategies target both short and long-term goals. I’m in supply chain & logistics. Why should I be concerned with front-end customer engagement? This is a commonly asked question by those who work in the supply

chain and logistics arena. The answer is not only that you should care but that you MUST care if your company is to do more than just survive. And the same is true in reverse. That is, those operating at the front-end of the business must also understand and appreciate what goes on at the back-end. Allow me to explain why. If supply chain and logistics is all about consolidating, simplifying and streamlining an operation in order to buy, move and sell goods more efficiently, effectively and safely, then customer engagement and sales clearly factor into that equation. Too many company directors still consider supply chain and logistics to be nothing more than a company’s warehousing and transportation functions. But today’s most successful retailers understand the need for the entire organization Logistics News ME | February 2015 | 33

PROFESSIONAL PERSPECTIVES .....................................................................................................................

There’s no point investing in emerging in-store technology if you can’t measure the results it produces. But while it’s easy to measure analytics from website traffic, determining whether an increase in sales is due to your omni-channel strategies or something else can be more challenging.

Prakash ‘ PK ‘ Menon, Executive Director, Thought Leaders Middle East

Prakash ‹PK› Menon Internationally acclaimed speaker, thought leader, author and mentor Prakash ‹PK› Menon is the Executive Director, ‘Thought Leaders Middle East’ and one of the world›s most respected supply chain experts and leadership authorities. Menon, a regular contributor to Logistics News Middle East, has authored three bestselling books, ‘Driven’, ‘Fail Smart’ and ‘Supply Chain is Sexy’, all of which continue to inspire both neo-entrepreneurs and established business leaders. Prakash ‘PK’ Menon helps entrepreneurs, retailers, corporate professionals, CEOs and aspiring business owners, speakers and mentors achieve world class results and financial independence.

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Imagine if a particular product line were being heavily promoted via digital signage and other marketing channels, but the planning and buying team had not been made aware in advance that this was happening. The marketing achieved its desired result and customer demand for the product was strong. However, because the front-end and back-end of the business were operating in isolation from one another, there was insufficient stock of the product line being promoted on the shelves. As a result, demand couldn’t be met, customers were disgruntled and sales were lost. For things to run in a smooth, coordinated and effective way, the left hand must always know what the right is doing. THE BEST OMNICHANNEL STRATEGIES REVOLVE AROUND THE CUSTOMER When developing a digital signage strategy as part of an omni-channel approach, the place to start is to find out what your customers want. How do they want the instore shopping experience to look and feel and what information do they want ready access to? The key is to earn their trust, respect and appreciation as opposed to just dazzling them with a one-off, out-of-this-world experience. It’s about doing so every time they walk through the doors, receive an email or interact with you on social media. In other words, building a relationship is not a box to be ticked. It’s an ongoing process. The aim is to be more subtle and meaningful and less intrusive. The last thing you

want is for your omni-channel strategies to come across as a direct sales pitch. ‘Slow and steady wins the race’. ENGAGING CUSTOMERS USING DIGITAL SIGNAGE – SOME EXAMPLES There are a number of digital signage tools you can use to engage your target market. Examples include: Digital Menu Boards that highlight key products as a dynamic selling tool. A Welcome Board placed at the entry to your store that delivers dynamically evolving key messages about your brand can make a great first impression to consumers as they enter the store. Infotainment to entertain, educate and influence customers while they wait. Multi-Zone Digital Signage that leads consumers on a journey through the store, for example video walls and displays that create ambience through moving images and music (all with a distinct marketing message designed to enhance product appeal). Information Kiosks that allow customers to initiate a video or audio chat with an expert based at a remote call centre to ask a question (great cost-saving solution for companies with multiple locations). Digital Media Endcaps that enable you to change the focus of the display quickly and easily to focus on the product/s you want promoted at any given time), Endless Aisle Kiosks that allow customers to browse more inventory and options than you could ever hope to display on the shop floor.

IF YOU CAN’T MEASURE IT, YOU CAN’T MANAGE IT There’s no point investing in emerging in-store technology if you can’t measure the results it produces. But while it’s easy to measure analytics from website traffic, determining whether an increase in sales is due to your omni-channel strategies or something else can be more challenging. Compare trends in usage against sales results in-store and monitor the growth in fans via social media. Look at what people are posting and sharing and the effect their posts and shares have on others. These are two simple but important ways to determine what’s working and what isn’t. NO LONGER A LUXURY RESERVED FOR THE WORLD’S LARGEST RETAILERS It wasn’t that long ago that digital signage was a luxury reserved for the largest retailers due to its complexity and cost. However, as with most emerging technologies, digital signage has become simpler to produce and therefore more affordable and accessible. So if you think that this type of technology may not be affordable, just remember that it costs less to build the revenue earning potential from one customer than it does to capture the interest of new customers. What’s more, digital signage can also save you money in staffing costs as it can act like a virtual salesperson on the floor, offering useful information to the consumer without the need for extra staff walking the floor.

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SUSTAINABLE & SMART LOGISTICS via a Multi-Modal Silk Road

Multimodal Silk Route A multimodal road-rail overland service connecting Asia and Europe has recently been launched by DHL Global Forwarding, delivering a reliable service that offers a competitively priced alternative, which provides significant cost savings compared to air freight. The weekly China to Europe train service departs every Friday from Chengdu, travelling along China’s West Corridor rail line, through Kazakhstan and via DHL’s intermodal hub in Malaszewicze, Poland. The multi- modal service also promises delivery time reductions of between 10 and 21 days compared to sea freight, depending on origin 36 | Logistics News ME | February 2015

and destination. This new weekly service from Chengdu comes as an addition to DHL’s established daily service, departing from Shanghai and running along the trans-Siberian North Corridor, with a transit time difference of up to eight days. In turn, the new service also offers greater cost and CO2 emission reductions. Ocean Alternative Movement of goods from Asia to Europe are traditionally by container ship via the Suez Canal - through which about 19,000 ships transit each year. A north bound alternative route via the Artic is now providing an alternative water-

borne option, whereby the effects of global warming have been melting the sea ice such that this route is now navigable for about four months of the year, from around the end of July. This Artic route, called the Northeast Passage trims about 7,000 kilometres off the journey, thus reducing fuel consumption and therefore providing substantial reductions in cost and carbon emissions. In 2013 some forty-six ships used this Northeast Passage, compared with four in 2010 – demonstrating increased interest in this option. Although not a rival to the Suez Canal, during the right season, the Northeast Passage

offers an alternative option, with obvious potential to grow in usage. Conclusion Increasing bidirectional trade flows between Europe and Asia are generating huge opportunities, whilst also revealing some challenges, but organisations cannot go it alone. A collaborative is required, leveraging carefully selected business partners with deep understanding about the diverse markets across the Europe Asia trading blocs. Companies can also leverage external and independent expertise to help them navigate the complexities in order to benefit from the substantial trade and logistics opportunities across the continents.

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Although the trade has been long dominated by ocean freight, Eurasia landbridge options via road and rail, emulating the old traditional Silk Road trading routes, are now becoming viable alternative options for overland cargo transportation from Asia to Europe and vice versa.

Businesses should therefore embrace the complexity, and actively engage the knowledge and networks to provide the insights required to overcome the challenges, implementing sustainable and smart logistics solutions, in order to capitalize on this exciting smorgasbord of new business opportunities. Following dramatic increases in recent years, China-Europe trade now represents a significant proportion of global commerce, with China now being Europe’s second largest trading partner (after USA) and the EU’s fastest growing export market. EU exports to China reached a record EUR 148.1 billion (US $ 174.22 billion) in 2013, almost doubling in the past five years. At the same time, China is the EU’s biggest supplier, with Europe importing EUR 279.9 billion (US $ 329.26 billion) worth of goods in 2013, making the total EUChina bilateral trade in goods worth a total of EUR 428 billion (US $ 503.48 billion). With this expanding development of European market opportunities, companies are increasingly seeking alternative options for Asia Europe cargo flows, as additional options to the traditional long-haul ocean freight routes via the Straits of Malacca and through the Suez Canal. Although the trade has been long dominated by ocean freight, Eurasia land-bridge options via road and rail,

emulating the old traditional Silk Road trading routes, are now becoming viable alternative options for overland cargo transportation from Asia to Europe and vice versa. The latest developments of feasible and practical land links by road and rail provide traders with alternative transportation options that are faster than ocean-freight and cheaper than air-cargo, thus appealing to companies that are seeking to optimize their supply chains. However, there remain many areas for improvement, not least of which are cross border procedures and infrastructure developments.

Asia-Europe Transportation Options Silk Road To help stimulate regional trade and better connect their economies, China, Russia and Kazakhstan are counting on a new ground transportation corridor that stretches from eastern Chinas Jiangsu province to St. Petersburg in Russia. After nine years of negotiations, the three countries have reached agreement on a construction plan for the Asia-Europe road, expected to be complete by 2017. The length of this new transport corridor will be 8,445 kilometers, with 2,233 km in Russia, 2,787 km in

Kazakhstan and 3,425 km in China. Once completed, the new highway is expected to help attract foreign investment into Russia and Central Asia, with the service sectors also benefiting along the route. Silk Rail As companies seek to reduce the time and cost of freight transport on the Asia to Europe route, the use of rail is becoming a viable option. Following consistent increases in labour cost in the coastal areas, a large amount of manufacturing now takes place in central China, from where goods have to be transported by road to the coastal port cities for onward transit via container ship to Europe, a journey that can take between 40 to 60 days. However, since 2013, a new cross-border rail route is available that can transport made-in-China products from Zhengzhou in China to Hamburg in Germany. Called the ‘Iron Silk Road’, the journey takes only 15-18 days to cover the 10,214 kilometers, making it especially suitable for goods with relatively high added value or which need to be delivered within a short period of time. Recently announced by a joint venture between Deutsche Bahn and Russian Railways are plans for another rail route, this one from Chongqing, China via Kazakhstan, Russia Belarus and Poland through to Duisburg in Germany.

Mark Millar

Mark Millar — MBA, FCILT, FCIM, FHKLA, GAICD Mark Millar provides value for clients with independent and informed perspectives on their supply chain strategies in Asia. His ‘Asia Supply Chain Insights’ series of consultations, seminars help companies improve their understanding of the complex landscapes, make better informed business decisions and increase the supply chain ecosystems. Clients have engaged Mark as Speaker, MC, Moderator or Conference Chairman at more than 350 events in 23 countries.

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INVESTMENTS .....................................................................................................................

RAKIA RAISES THE INVESTMENT TEMPO

Aerial view of RAKIA Industrial Park

Picturesque and picture-perfect Ras Al Khaimah, the northernmost of the seven emirates constituting the UAE, has been very aggressive in its pursuit of investment. Ras Al Khaimah has been at the fore promoting its unique position, incentives, infrastructure, business & investment opportunities, ease and pace of setting business, streamlined processes and investment dividends globally. Logistics News Middle East met the dynamic, driven and determined Rino Sabatino, CEO, RAKIA, for an exclusive interview. As a Chief Executive Officer with global experience, Rino is recognized for leading growth and change initiatives to increase revenues and profits in large industrial, technology, real estate and manufacturing corporations.

Please bring us to current on the speed and scale of new company registrations in RAKIA in 2014? 2014 was a tremendous year for the Ras Al Khaimah Investment Authority. Celebrating 10 years of operations, we took the total number of registered tenants beyond 7,000. That figure includes 500 manufacturing units, which demonstrates the attractiveness of RAKIA as a hub for industry. Most recently, we welcomed Asian Fibres and Everest Industries Ltd to RAKIA. The UAE-based Asian Fibres has invested USD 100 million on a 860,000 square feet production facility that is expected to be fully operational by May. Everest Industries Ltd., one of the fastest growing building solutions companies in India, is set to occupy 750,000 square feet in RAKIA’s Al Ghail industrial park. The 38 | Logistics News ME | February 2015

agreement reaffirms RAKIA’s continued success in driving foreign direct investment to the emirate. What has been the level of monetary investments into RAKIA in 2014 and how does it stack up against 2013? What is the total / cumulative investment in RAKIA to date since your inception in 2005? While we do not comment on our profits, 2014 was a record year of inward investment to RAKIA from across the MENA region and beyond. From which countries / regions / geographies are the new investments coming from and where is your focus? Investments into RAKIA are from a range of companies from all over the region and the world. 25% of our tenants are companies based in India, such as Ashok Leyland and a further 16% of our business

is from MENA-based companies (not including the GCC). The GCC also accounts for 16% of our investors while 14% of RAKIA tenants are European headquartered. What commercial / industrial sectors do these new companies represent? RAKIA’s industries include automotive, plastics, food processing, chemicals, glass, building materials, metal processing and fabrication, aerospace and electrical industries. How significant is the logistics–supply chain sector for RAKIA and what are you doing specifically to attract more investments into this segment? The logistics and supply chain sector is significant to RAKIA because Ras Al Khaimah is the UAE’s first point of entry in

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RAKIA’s target industries for its parks include automotive, plastics, food processing, chemicals, glass, building materials, metal processing and fabrication, aerospace and electrical industries.

the Arabian Gulf. RAK Offshore, a division of RAKIA, offers clients one of the most widely accepted and recognized offshore jurisdictions in the world, fortified by asset protection and tax optimization strategies. RAKIA is currently home to a high percentage of companies who fall under the building and construction sector, some of which include Guardian Glass (USA), Mabani Steel (KSA), and RAK Ceramics (UAE). They produce materials for projects all over the region and the logistics accessibility RAKIA provides is ideal. RAKIA has easy access to strategic markets and has close proximity to two express highways, three sea ports and three airports. Furthermore, it is 45 minutes from Dubai and is reachable to three billion consumers within a five hour flying radius. With the planned railway network by 2018, the logistics and supply chain will benefit from a high level of connectivity with maximum cost-efficiency when working out of our parks. Al Hamra & Al Ghail are the two large industrial parks you are seeking investments for. Who is your target audience and what is the nature of businesses you are seeking? We currently manage and operate 30 million square meters of land in our two industrial parks, Al Hamra and Al Ghail. Al Ghail, in particular, is our jewel, with more than 23 million square meters of leasable land. This year, we will channel substantial resources into the development of Al Ghail, investing 200 million dirhams in infrastructure development projects and amplify spending to develop state-of-the-art warehouses. Both parks offer industrial land suitable for all types of manufacturing activities along with offices and labor accommodations within the premises. Our warehouses are located in Al Hamra and are suitable for storage and small scale industries. RAKIA’s target industries for its parks include automotive, plastics, food processing, chemicals, glass, building materials, metal processing and fabrication, aerospace and electrical industries. How are you maintaining growth momentum at RAKIA and what is your expansion strategy? How are you attracting new investments? Under the leadership of His Highness Sheikh

Saud Bin Saqr Al Qasimi, Supreme Council Member and Ruler of Ras Al Khaimah, RAKIA has focused on bringing best-in-class foreign direct investment (FDI) to the Emirate through infrastructure development and marketing outreach. Over the course of the last ten years, RAKIA has invested AED 1 billion to seeing this mandate through, and the payoff has been very gratifying. During RAKIA’s 10 years, we have seen our inward investments grow in terms of both size and tenants, and 2014 was a record year on both counts. We are always looking to attract investors and our outreach programme includes participating at regionally significant events, such as The Big 5 in 2014, which gave us the opportunity to walk potential investors through the advantages of doing business in RAKIA. What are RAKIA’s Unique Selling Propositions (USPs) vis-a-vis your peers in the Ras al Khaimah and other FTZs in the UAE & GCC? RAKIA has implemented several structural initiatives to drive business sustainability and engender a sense of community on its premises. In addition to setting multi-million dollar infrastructure projects in motion, RAKIA has worked to streamline its business processes and foster close bonds with governmental bodies such as Immigration and the Civil Defense and the Environmental Protection and Development Authority, which recently opened a branch at RAKIA’s corporate headquarters. Furthermore, in addition to offering competitive lease rates, RAKIA provides both free zone and non-free zone jurisdictions, which in itself is a key differentiator. The free zone jurisdiction allows companies that have chosen RAKIA as their business zone of choice to receive 100% tax exemptions, full foreign ownership, and total repatriation of capital and profits. Also, the business setup and operating costs at RAKIA are 25% to 30% lower than in neighboring places. Ras Al Khaimah is perfectly positioned near world-class air and sea ports, and is a gateway to the growing markets of the Middle East and North Africa with a population of 350 million consumers, as well as to the 1.5 billion-strong consumer base in South Asia. The Emirate’s responsible spending and strong balance sheet has also earned it ‘A/A-1’ and ‘A’ ratings, respectively, from credit rating firms Standard & Poor’s and Fitch.

Rino Sabatino, CEO, RAKIA

Rino Sabatino, Chief Executive Officer, RAKIA Rino Sabatino, a Canadian citizen, joined RAKIA in early 2014, under a direct mandate from the Ruler of Ras Al Khaimah to put the Emirate on the map as an attractive and emerging destination favourable to international industries. Prior to joining RAKIA, Sabatino was Chief Executive of The Lootah Group (Dubai, UAE), from 2005 to 2014.

How is RAKIA part of the synergy with other Ras Al Khaimah Government institutions including RAK FTZ, RAK International Airport, Mina Saqr, in promoting the Emirate’s economic goals? RAKIA, which is backed by the Government of Ras Al Khaimah, UAE, has a key objective to encourage significant foreign direct investment into the emirate of Ras Al Khaimah. The Government of Ras Al Khaimah has made significant investments in tourism, healthcare, retail and residential facilities, as well as utilities and power infrastructure, to attract foreign investment into the Emirate. Logistics News ME | February 2015 | 39

INVESTMENTS .....................................................................................................................

There’s no point investing in emerging in-store technology if you can’t measure the results it produces. But while it’s easy to measure analytics from website traffic, determining whether an increase in sales is due to your omni-channel strategies or something else can be more challenging.

What is your outlook for RAKIA for 2015?

2015 will be about continued growth. For the better part of a decade, RAKIA has attracted more than 7,000 small, medium, and large companies from across India, the Middle East and North Africa and Europe by meeting aggressive targets. Going forward, we will focus our efforts on building up Al Ghail, which is currently 30 percent leased, and put the weight of our efforts into increasing the number of new licenses we issue by 50 percent over the next five years. You took over your current position in early 2014—what are your thoughts as you complete a year in office?

I am amazed at the progress we have achieved over the past year. It could not have been done without the wonderful team at RAKIA who are committed to delivering the best service possible to our customers. While we have exceeded 40 | Logistics News ME | February 2015

expectations, we must focus on continuing and maintaining the same level of excellence during the coming years. RAKIA was recently named the ‘Best Free Trade Zone’ of the GCC 2014 by the International Finance Magazine. Please comment. To be named the ‘Best Free Trade Zone’ by International Finance Magazine is an honour. RAKIA is always focused on providing the most business-friendly environment and competitive value proposition for large, medium and smallscale enterprises. The recognition of our efforts is proof that we are on the right track and inspires us to continue pursuing our vision of a being a gateway for global industry to the region. What is your wider vision for RAKIA for the short and long terms?

RAKIA will continue to offer unrivalled opportunities to international investors

RAKIA Headquarters & Industrial Park 2

and foreign companies who have recognized the value of setting up in a stable environment with low operating costs. This is part of our commitment as a leading business zone to provide a probusiness environment, regulatory stability and robust infrastructure in the Emirate of Ras Al Khaimah in the UAE. By 2020 RAKIA will be one of the most established global industrial zones, enabling growth of international businesses in its free zone and non-free zone facilities. We are playing an important role in trading within the Middle East, North Africa and South Asia region with ports, roads, and anticipated rail networks offering extensive connectivity. This puts a 350 million-strong population in the burgeoning markets of the Middle East and North Africa and 1.5 billion-strong consumer base in South Asia at the fingertips of our customers.

..................................................................................................................... LOGISTICS & THE LAW

SLASHING OIL PRICES

boost the Shipping Industry

The oil price going down is seen as a positive sign for the Shipping Industry. The shipping operations costs have come down, the demand for oil tankers have come up, and some counties are keen in piling up their oil stock, especially China, due to the slashing oil prices in the global markets. With a price drop from $ 115 to $ 50 in oil, analysts predict that this would continue until June. A Dubai based ship owner and Chief Executive

costs almost came down to half and this include costs of large crude carriers or super tankers also. This is of significant help for the shipping companies as bunkering is one of their major expenses. Many oil trading companies have chartered around fifteen super tankers with the storage capacity of around 30 million barrels, mainly to take advantage of the downward trend of oil prices and store crude for sale in the future.

lower than the current spot rates The current market situation would benefit the shipping industry even more as the buying of diesel gets cheaper which has come down to 40 per cent. China one of the biggest consumers and importers of crude oil, is making a smart and strategic move and is taking proper advantage of the situation and stockpiling fuel. It is also expected that there would be an improvement in container shipping profitability

China one of the biggest consumers and importers of crude oil, is making a smart and strategic move and is taking proper advantage of the situation and stockpiling fuel. Officer, operating a fleet of tankers in the Middle East and Indian subcontinent, who is optimistic about the effect on the shipping industry due to this development stated that it will also bring positive effect on the profits of the companies. He opines that the demand for oil tankers went high and the bunkering

In addition to the profits of the shipping companies, a ship owner predicts an increase in the floating storage charges where the oil companies hire large vessels to store oil. Another advantage for this type of floating storage is the ship owners’ readiness to accept and agree on time charters which are about half the rate

despite record vessel deliveries. Carriers are also expected to reap huge profits in 2015 provided there is continued focus on vessel deployment, low fuel costs, recovering demand, successful outcome of annual Beneficial Cargo Owner contract negotiations and new operational alliances delivering greater market stability.

Joy Thattil Ittoop

Joy Thattil Ittoop Joy Thattil Ittoop, Maritime Lawyer by profession, is a senior partner at Callidus with offices in Dubai, Singapore and India. He specialized in Maritime Law from the University of Southampton, UK. Joy Thattil was appointed as a Public Notary by the Government of India. He is the present Secretary General of Indian Institute of Maritime Law (IIML).

Logistics News ME | February 2015 | 41

GCC RAIL & METRO CONFERENCE 2015 .....................................................................................................................

DELEGATES DRAW OUT BLUEPRINT FOR GCC RAIL DEVELOPMENT The GCC Rail and Metro Conference 2015 attracted high-ranking government officials from the GCC States’ Ministries of Transport, Trade and Commerce, and Finance alongside top executives from Etihad Rail, Saudi Railways Organization (SRO), Saudi Railway Company (SRC), Qatar Rail, and Oman Rail.

The two-day GCC Rail and Metro Conference 2015 was held at the prestigious Qasr Al Bustan Hotel, in the Omani capital Muscat on 11 & 12 January 2015. The event, held under the auspices of HH Sayyid Shihab Bin Tariq Al Said, Advisor to His Majesty, Sultan Qaboos Bin Said of Oman, was organized by the Ministry of Transport and Communications in Oman, in association with the Gulf Cooperation Council for the Arab States of the Gulf. The event was attended by about 500 highranking rail and metro specialists, as well as supporting public and private sectors from more than 25 countries. A total of 17 worksheets were presented during the conference, addressing the development of rail and metro projects in the GCC, in addition to the numerous opportunities available for the private sector to localize some of the supporting industries, and the challenges and opportunities available to improve and train 42 | Logistics News ME | February 2015

GCC skills to sustain the sector in the GCC. Discussions were held between high-ranking officials to consider the many strategies related to the development of the Transport and Communications sectors in the GCC and achieve integration between member countries throughout the rail network. Talks also included discussions on investments in this sector, partnership between public and private sectors and the transport sector’s role in boosting intraregional trade and logistic services. The conference reached the following recommendations: 1) The need to prepare a detailed study to establish a Development Fund to achieve sustainability in the GCC Rail and Metro Sector. Called ‘GCC Sustainable Railway Development’, it will be financed in partnership with the private sector.

2) Establish training programs, including on-thejob training, and establishing a GCC Academy for the training and development of national talents. This will benefit from the already available railway training institutes in the GCC countries as much as possible. 3) Establish programs for Specialized Railway Academic Studies, including research and technology development. 4) Study and establish programs to localize supporting industries for Rail and Metro projects with added value to the GCC economies. 5) Create a working plan and timeframe to localize supporting industries, knowledge, experience, and regional and international experiences to achieve sustainable rail and metro maintenance projects.

..................................................................................................................... GCC RAIL & METRO CONFERENCE 2015

Delegates stand to attention at the playing of the National Anthems

Other recommendations reached included the development of a comprehensive strategy to achieve the integration of rail and metro projects within a comprehensive transportation system and all its forms in the GCC, including passengers and goods transportation logistics. The strategy should form a part of comprehensive strategic planning in GCC countries. The forum called for the establishment of effective programs to encourage experienced foreign companies in the sector to enter real partnerships with the regional private and public sectors and to invest in rail and metro projects in the GCC, which will benefit from their professional and administrative experience. Related policies and regulations should also be developed in line with projects executions requirements, to provide a suitable environment and purchases systems that will guarantee fairness, competitiveness and transparency. Member countries were encouraged to ease processes to establish partnerships between GCC companies and specialized companies from developed countries who have experience in manufacturing rail projects requirements, to transfer technology and experiences to the GCC countries through establishing joint manufacturing facilities for those requirements. It was decided to also extend invitations to rail and metro specialized companies and hold meetings with them to discuss the possibility of partnerships to establish joint GCC companies that offer passenger and goods transport services and supporting logistic services in the GCC.

GCC countries were exhorted to participate as a united economic bloc in international organizations such as UIC (International Union of Railways), AREMA (American Railway Engineering & Maintenance Association) & ERA (European Railway Agency) that work on developing engineering specifications and standards, and rail and metro projects regulations and legislation in the GCC, to play a more effective role in making related decisions. The necessity of reaching an agreement between member countries to develop and improve institutional structure and establish comprehensive policies and systems was also stressed to ease passenger and goods transportation between GCC countries through border posts to achieve the strategic goals and optimal use of transportation and rail sectors in the GCC countries. It was also agreed that Gulf Cooperation Council members would take the necessary actions in coordination with member countries to follow up the implementation of recommendations and present an annual report about what will be achieved and present it to the GCC Railway Project Committee. Speaking at the conference with his copanelists, HE Abdulrahim Hasan Naqi, Secretary General, Federation of GCC Chambers of Commerce and Industry (FGCC Chambers), Eng. Imran Abdool Karim, Strategy & Marketing, Transnet Engineering and Nigel Ash, MD, Network Rail Consulting, did a series of short presentations followed by moderated discussion on identifying and agreeing the key areas and actions that need to

be addressed to ensure effective and successful public-private participation. HE Abdulrahim Hasan Naqi spoke about government policies and regulations for the development of the rail and metro projects – procurement and labour issues. “In terms of labour, we are focusing on how to encourage GCC nationals to find employment through various programmes. These include training programmes, vocational and professional development initiatives such as the training development that Saudi Arabian Railways has established for building railway related skills and capability,” added Naqi. Also a part of the panel discussions today, Nigel Ash, MD, Network Rail Consulting outlined the key lessons that the GCC rail and metro sector can use for defining a vocational development strategy. “There needs to be a greater focus on the development of key vocational skills concerning the operation and maintenance of a live railway system. The construction project may only last 5 years but the railways will last for decades to come,” emphasized Ash. “Partnering with a large international railway operator can help accelerate the development of the institutional capacity of the railway,” Ash concluded. The GCC Rail and Metro Conference 2015 attracted high-ranking government officials from the GCC States’ Ministries of Transport, Trade and Commerce, and Finance alongside top executives from Etihad Rail, Saudi Railways Organization (SRO), Saudi Railway Company (SRC), Qatar Rail, and Oman Rail. Logistics News ME | February 2015 | 43

..................................................................................................................... DUBAI CUSTOMS ENFORCEMENT

380,000 INSPECTIONS, 512 SEIZURES IN 2014 DUBAI CUSTOMS HOT ON THE ENFORCEMENT TRAIL; DIRECTOR VISITS DUBAI LOGISTICS CITY

No customs duties for Singaporean products beginning 2015

HE Ahmed Mahboob Musabih, Director of Dubai Customs, paid an inspection visit to the Department’s Client Service Centre in Dubai Logistics City and Jebel Ali Customs Offices. He was accompanied by Abdullah Mohammad Al Khaja, Executive Director of Clients Management Division and Butti Al Jumairi, Executive Director of Human Resources, Finance and Administration Division. He met a cross section of officials and clients and stressed the Dubai Customs credo to safeguard both the trading community and general public from the perils against bypassing the system, illegalities and the perils of illicit trade. Accordingly to Yousuf Al Hashemi, Director of Jebel Ali Customs Centres Management, who briefed the delegation, the Department made 512 seizures in 2014. A total of 380,000 inspection operations were conducted on containers that were screened by the advanced x-ray container scanning 44 | Logistics News ME | February 2015

system and referred to physical inspection based on risk assessment data retrieved from the Risk Engine. Al Hashemi also presented his department’s strategic plan and objectives for 2015 geared to achieve higher performance levels and implement best standards of customer service. Afterwards, during the subsequent field visit, Musabih met with employees and inspectors at their working sites. He commended everyone’s efforts, stressing DC’s commitment towards leveraging human capital capacities and enhancing service levels. The Director visited the Dubai Customs’ customer service centre in Jebel Ali Port and later visited the Port’s Gates 2, 3 and 7 and the container x-ray scanning station, where the Director praised the keenness of Dubai Customs inspectors on accurately and efficiently expediting the clearance of cargo consignments, using the latest smart inspection technology.

Dubai Customs put into effect the GCCSingapore Free Trade Agreement, which provides for the full exemption of Singaporean customs duties for products of GCC origin and the exemption of preset lists of Singaporean products coming into the GCC at pre-determined times. Effective 1 January 2015, Dubai Customs eliminated customs duties applicable to the pre-set Singaporean products. The Agreement was signed by governments of the GCC member states and Singapore on 15 December 2008, and was ratified by the UAE in 2009. HE Ahmed Mahboob Musabih, Director of Dubai Customs, asserted that this agreement was a milestone agreement in strengthening ties and promoting trade between the GCC countries and Singapore. He noted that bilateral trade between the UAE and Singapore would be further enhanced through exemption of customs duties on both sides. Dubai’s trade with Singapore mounted up to AED 9.2 billion in the first nine months of 2014 broken down into AED 5.2 billion in imports, AED 1.15 billion in exports and AED 2.86 billion in re-exports.

..................................................................................................................... GWC PERFORMANCE

GWC REVENUES PEAK AT US $ 185 MILLION IN 2014

2004-established Gulf Warehousing Company (GWC), Qatar’s leading provider of 3PL logistics & integrated logistics solutions, reported a strong 38% increase in net profits in the fiscal year 2014 at US $ 38.55 million compared to US $ 27.92 million in 2013. The spurt in profits was largely attributed to strong revenue streams, with total revenues peaking at US $ 185 million during 2014, an extraordinary 28 % increase from US $ 144.9 million for the year 2013. Earnings per share (EPS) rose to US $ 0.81 at the end of 2014, a significant increase of 38% over the corresponding period in 2013 at 0.58 US $. Wholly Qatari-owned Gulf Warehousing HE Sheikh Abdulla Fahad Bin Jassem Bin Jabor Al-Thani, Chairman, GWC

Company’s assets also saw exponential growth during 2014, rising to US $ 577.63 million in total assets, a growth of 11.8% in comparison to its holdings in 2013, which amounted to US $ 516.35 million. The company’s Bu Sulba Logistics Hub was one of the company’s biggest accomplishments in 2014, winning the estimated US $ 188 million contract for the 517,376 square meter site, making it one of the company’s biggest sites constructed to date, second only to the Logistics Village Qatar. Additionally, the Logistics Village Qatar (LVQ) developed a further 81,000 square meters, adding to an already impressive array of warehousing and distribution infrastructure during its fourth phase expansion during last year’s third quarter. GWC also expanded its industry specific assets, working to add nearly 65,000 square meters of facilities at its Ras Laffan Industrial City (RLIC) site, which will provide a new temperature-controlled warehouse, a new open yard and one of the first ISO tanks in the nation. “This consolidation of our assets as well as seeking to meet our clients’ needs are part of an

overarching strategy to ensure that our stakeholders see constant returns on their investment,” affirmed GWC Chairman, HE Sheikh Abdulla Fahad Bin Jassem Bin Jabor Al-Thani. “Our long-term strategies will see us continue to develop on our current assets while exploring new avenues and markets ready for expansion and exploration,” he added. The Road & Maritime Segment (RMS) market continues to dominate the market, serving nearly all financial institutions in the country and entering the medical records field just this year with two major contracts with national health providers. International Moves and Relocations continued to expand its operation maintaining a 98% satisfaction rate on all moves. Fine Art Logistics also ensured its position as the country’s preferred fine art movers. The transport department added to its assets by establishing a container repair service offered directly to its clients through the LVQ site. The company was the official logistics partner for the Mal Lawal Exhibition, bringing local art and artifacts from all over the GCC to the exhibition in Doha.

Logistics News ME | February 2015 | 45

F R E I G H T A N A LY S E S .....................................................................................................................

MIDDLE EAST LEADS IN AIR FREIGHT GROWTH

AT 12.9 %, THE PERCENTAGE GROWTH IN AIR FREIGHT IN THE MIDDLE EAST IS THE HIGHEST RECORDED OF ALL REGIONS.

AIR FREIGHT MARKET ANALYSIS NOVEMBER 2014 KEY POINTS Concerns have been rising about the health of the global economy at the start of 2015, and business confidence has weakened. But there was little sign of major cause for concern in the November air freight data. Its continued growth reflected the broader acceleration of world trade that began in mid-2014. Weakness in air freight is usually one of the first signs of economic weakness. Growth did slow in November, but not by much. Air freight volumes (Freight Tonne Kilometers flown) were up 4.2% in November compared to a year ago. This was down on October’s 5.4% but the year-on-year growth reduction was the effect of a strong monthly rise in November 2013. As the first chart below shows, the market expanded from October to November at a solid pace. During the first half of 2014, air freight volumes and world trade overall went through a weak patch, but there was a marked acceleration during the second half of last year. Notably, this improvement in cross-border trade during the past six months has taken place while domestic industrial production growth remained stable. As the second chart below shows the acceleration in the second half of 2014, of world trade relative to domestic production, comes after several years of interruption to the previous upward trend. This flat-lining of the tradeproduction ratio has been bad news for demand for air freight in recent years, dampening the strength of the cyclical upturn in air freight last year. It is too soon to say whether the last half year signals a diminution of the adverse impact of recent on-shoring and trade protectionism, but it is certainly a development worth watching. The air freight upturn has not been evenly spread, with over 90% of November’s 4.2% year-on-year growth carried by airlines in just two regions: Asia Pacific (55% of the growth) and the Middle East (38%). African airlines experienced the second strongest year-on-year growth rate in November, but carry only a small part of the world’s air freight and moreover their growth has been slowing. Uneven airline performance reflects uneven growth in trade flows. The two regions of recent strength in trade have been the US and Emerging Asia. Other regions remain relatively weak. There have also been special factors which have influenced the data, such as congestion at US West coast ports that led to some temporary switch to air and the sanctions on Russia which have affected trade flows in goods like perishables.

Year on Year Comparison Nov 2014 vs Nov 2013 YTD 2014 vs. YTD 2013

Month on Month Comparison Nov 2014 vs. Oct 2014

FTK

AFTK

FLF

FTK

AFTK

FLF

FTK

International

4.6%

4.0%

53.5%

4.7%

4.0%

49.2%

0.8%

0.0%

0.4%

Domestic

1.3%

0.0%

32.9%

2.7%

2.0%

30.9%

0.3%

-0.5%

0.3%

0.8%

-0.1%

0.4%

Total Market FTK: Freight-Tonne-Kilometers; AFTK: Available Freight Tonne Kilometers; FLF: Freight Load Factor; All Figures are expressed in % change Year on Year except FLF which are the load factors for the specific month.

46 | Logistics News ME | February 2015

AFTK

FLF pt

Data are seasonally adjusted. All figures are expressed in % change MoM except, FLFpt which are the percentage point difference between load factors of two months.

The International Air Transport Association (IATA) reported November 2014 data for global air freight markets showing that demand measured in Freight Tonne Kilometres (FTK) grew 4.2% compared to November 2013. Capacity grew by 3.3% over the corresponding November 2013 figures. Compared to October 2014, air freight demand expanded by 0.8%. The most significant growth was recorded by carriers in the Middle East & Asia-Pacific and Middle East regions, at 12.9 % and 5.9%, respectively. Carriers in these two regions captured the vast majority of the global increase (93%). Airlines in the Middle East region contributed a further 38% of growth (with a global market share of 13.3%). If this growth trend continues, it bodes well for air freight markets. Air freight is closely linked to world trade (by value about a third of goods traded internationally are shipped by air). Air cargo growth stagnated from 2011 as world trade volumes basically grew in tandem with domestic production. A strong growth trend in cross-border trade emerged over the second half of 2014 (while domestic industrial production remained stable) which has had a positive impact on air cargo volumes. “More goods are being traded internationally and that is fueling the growth in air freight. It was clear in November that most of that growth is being captured by carriers in the dynamic and relatively business-friendly Asia-Pacific and Middle East regions. This year we expect air freight markets to expand by 4.5%, outpacing projected growth in world trade (4.0%). But that optimism is tempered by the many macro-economic and political risks that continue to impact trade flows,” averred Tony Tyler, IATA’s Director General & CEO. Middle Eastern carriers continued their strong performance, beating all other regions including Europe & North America, with FTK (Freight Tonne Kilometers) growth of 12.9% and a 17.1% increase in capacity. The region’s efficient hubs continue to provide a strong platform for connecting long-haul freight shipments. Furthermore, this region contributed to over 64 % of the increase in worldwide air freight capacity as they added aircraft to their fleet. IATA (International Air Transport Association) represents some 250 airlines comprising 84% of global air traffic. Total freight traffic market shares by region of carriers in terms of FTK are: Asia-Pacific 39.7%, Europe 23.2%, North America 19.2%, Middle East 13.3%, Latin America 3.1%, and Africa 1.6%.

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