Dubai and Kuwait-listed firm plans string of new investments in the GCC in 2018
UAE is third-best emerging market for logistics, says Agility
The UAE maintained its position as the third-best logistics centre among 50 emerging markets surveyed by the Dubai-listed logistics firm Agility, which plans new investments in the country this year as global trading conditions improve.
“We have definitely seen an uptick in the economy and our preliminary results for 2017 are positive,” Bassel El Dabbagh, the chief executive of Agility Abu Dhabi, said yesterday. “We have continued to have growth and are optimistic about 2018.”
This buoyant outlook is reflected in the ninth annual Agility Emerging Markets Logistics Index.
The UAE was ranked third after China and India in the index, and top in the Middle East and North Africa region, scoring highly in the compatibility and connectedness sub-indexes, which measure market accessibility and ease of doing business.
The country also took the No 1 spot for quality of infrastructure and transport.
“The UAE maintains its high ranking across several indices with its abundance of free trade zones, no corporation tax, the offer of full ownership and unlimited repatriation of profits still setting the benchmark for emerging markets,” said Elias Monem, the chief executive of Agility Middle East and Africa.
“The capital Abu Dhabi has several high-profile infrastructure projects coming online, and we are accommodating that growth through our expanding business.”
Mr El Dabbagh said Agility invested Dh125 million in Abu Dhabi last year, some of which will spill over into this year.
“The Abu Dhabi investment we initiated in 2017 was across a set of larger projects that are still under development. The 21,000 square metre warehouse in Mussaffah and expansion into Kizad [Khalifa Port Free Trade Zone] are on track, meaning the investment is in full swing and ongoing,” he said.
In 2017, the company expanded its overland transportation fleet by 50 trucks to service the domestic and regional market. In 2018, Agility will be investing an additional Dh10 million to Dh15m to grow its truck fleet by another 30 vehicles as well as ongoing capex investments.
The company plans Dh1 billion of investment into developing Abu Dhabi’s Reem Mall, in which it committed Dh225m in 2015. It is currently in talks with banks to secure additional financing, Mr El Dabbagh said.
Meanwhile, Agility plans to expand some of its existing warehouses across the Arabian Gulf, as well as build new ones.
GCC countries in general outclassed other emerging markets in the 2018 index, with the UAE, Oman and Bahrain occupying the top five spots in ease of doing business, followed by Saudi Arabia in eighth position and Kuwait in 16th.
The GCC also ranked close to the top in infrastructure and transport connections, with Bahrain coming below the UAE, in fifth position, and Oman and Saudi Arabia taking sixth and seventh positions, respectively.
Kuwait was the only Gulf state that did not feature in the top 10 because of its weaker transport and infrastructure networks.
Of all emerging markets, India, China, Vietnam, the UAE and Brazil were considered the top five most popular investment destinations for the next five years, while the most promising sector for investment in Mena was oil and gas, Agility said.
Almost half (45 per cent) of respondents said emerging markets would be “unaffected by Brexit”, and 25.4 per cent said emerging markets would benefit from Brexit as the UK sought to draw up new trade agreements.
Agility, which is traded on the Kuwait and Dubai stock exchanges and has about $4 billion in revenues, does not provide a profit breakdown of its logistics business.
However, group net profit increased 17.4 per cent year-on-year to 17.8m Kuwaiti dinars (Dh217.6m) in the third quarter of 2017, and revenue increased 15 per cent to 358.5m dinars. Full-year 2017 results are due to be announced in the coming weeks.