Diversification in Middle Eastern Economies

It seems diversification is the name of the new game being played across the oil producers in the Middle East. The AD Ports Group of Abu Dhabi business model is integrally comprised of  Digital, Economic Cities & Free Zones, Logistics, Maritime and Ports. The UAE is a significant investor in Egypt.

Under the foresight of AD Port Group’s CEO Captain Mohamed Juma Al Shamisi the group is advancing its diversification footprint .Promoting gender equality its board comprises of Ms Najeeba Al Jabri .The group initialed a 30 years concession agreement to develop and operate the multi-purpose Safaga Port in Egypt and it plans to infuse $200 million for superstructure and equipment inside the concession area. The venture also aims to strengthen and expand global access to multipurpose terminals and logistic capabilities in Safaga, Port Said and Sharm El Sheikh and also to capitalize on the strategic location of Egypt’s Red Sea coastline. .

 

Credit AD Group

Cost Savings to Egyptian Business

The Egyptian economy relies mainly on the Suez Canal for its forex earnings. The economy is in dire straits and struggling to import essential food items including wheat.Presently imported consignments worth around $ 10 billion are pending clearance at Egyptian ports due to insufficient foreign exchange and dollars and letters of credit are not being opened for import clearance. Egypt’s Finance Ministry is awaiting disbursement from external and multilateral agencies such as the International Monetary Fund as the amount to be paid by Egypt in debt servicing exceeds $ 41 billion for the current financial year. As Safaga Port will be the first internationally operated port in the Upper Egypt region significant cost savings to traders, industries and businesses located in this region is expected to accrue.Egypt’s economic sovereignty will not be compromised and national pride will be saved.Exclusivity clauses in such agreements invariably make imports expensive.

Terminal Development

Credit Viator

The agreement will boost access to Egypt’s cruise routes and attract tourism through digitally promoting Arab culture and archaeological sites in the region. The terminal at the port will be developed over an area of almost 810,000 square meters and is expected to be operationalized by mid 2025. The terminal will have an expanded capacity to annually handle 5 million tonnes of dry bulk and general cargo and 450,000 TEU’s of containerised cargo.

Boosting Egyptian Exports

Egypt’s exports of cement are expected to double as separate 15 year agreements have been signed  between AD Ports Group and the General Authority for the Suez Canal Economic Zone for the development of two cement terminals in Al Arish Port and West Port Said.This investment by the Abu Dhabi group will entail construction of silos with a storage capacity of up to 60,000 tonnes in Al Arish Port and 30,000 tonnes in West Port Said with each terminal handling 1.0 to 1.5 million tonnes annually.Enhancement in export volumes and consequential increase in foreign exchange will provide much needed relief to Egypt’s external financing woes.

By Nadir Mumtaz