37 minute read
Covid-19 & its impact on aviation industry
AVIATION GLOBAL AIR TRAVEL
With major airlines facing losses, many employees were laid off, or were asked to either go home without pay or face salary cuts
IF CORRESPONDENT
The aviation sector is not a stranger to rising to the challenges of a crisis. There is no denying that 2020 was an exceptionally difficult year for all of us, and the aviation industry was no exception. In fact, this sector was one of the most hard-hit. With major airlines facing
With major losses, a large number of airlines facing employees were laid off, while losses, a large many were asked to go home number of without pay and others faced employees were salary cuts. Industry revenues laid off, while many were asked to go home without pay and others faced salary cuts. totaled $328 billion, around 40 percent of the previous years. It was also predicted by experts that the aviation industry will achieve its 2019 numbers only by 2024. Keeping the financial woes aside, the long-term effects of Covid-19 on the aviation industry is slowly emerging. The obvious ones are concerns regarding hygiene and safety, which have definitely become more strict. The health, safety, and well-being of passengers and staff is the aviation industry’s number one priority. In order to follow through, airports around the world have introduced many new health and biosafety measures to ensure the safety of the passengers and that their efforts directly reflect and match with the current consumer trend. Airports and airlines along with the world have come together to resume global connectivity. At present, the rate of global vaccinations offers a hope that a return to normalcy is possible in the near future.
Leisure trips will fuel recovery Experts estimate that while business travels will take longer to recover, and even then, it is only likely to recover to around 80 percent of prepandemic levels by 2024. Additionally, remote work and other flexible work arrangements are likely to remain in some form, even post Covid-19, which will lead people to take fewer business trips. In previous crises, leisure trips or visits to friends and relatives tended to rebound first, and this was first witnessed in the UK, after 9/11 and the 2008 global financial crisis. Not only did business trips take four years to return to the pre-crisis levels after the attacks on the World Trade Center but they also had not yet recovered to pre-financial-crisis levels when Covid-19 broke out in 2020. Hence, it is expected once Covid-19 subsides, the rise in leisure trips will lead to the recovery of business travel.
There are some air carriers that are highly dependent on business travelers, both those who are traveling in business class and economy seats right before they travel. While leisure passengers fill up most of the seats on flights and help cover a portion of fixed costs, its overall contribution to net profit is negligible, and marginal at best. Most of the profits
earned on a long-haul flight are generated by a small group of high-yielding passengers, often traveling for business. But this pool of profit-generating passengers has shrunk because of the pandemic.
Relearning flight economics After seeing the extensive effects of Covid-19 on the aviation industry, many experts have suggested that airlines should reevaluate the economics of their operations, especially long-haul flights. For example, currently, most carriers price point-to-point nonstop flights at a premium. Travelers who value time over price—mostly business travelers—book these nonstop flights. On the other hand, people who travel for leisure even those traveling in premium classes, are more price-sensitive and may choose an indirect routing. This large gap between nonstop pricing and connect pricing may need to narrow.
Secondly, lower business traffic may require network changes. Over the last few years, airlines have added many flights between hubs and smaller cities, using small-size widebodies such as the Boeing 787. These flights work primarily due to high-yielding business demand. With business demand subdued, economics favor larger aircraft flying less frequently. Many carriers may find that larger aircraft such as Airbus A350s or Boeing 777s— which have lower unit costs—become the base of the long-haul network.
Thirdly, airlines may also look at reconfiguring the layout of their cabins to address the increased share of leisure traffic. Additionally, products may also shift in order to cater to premium-leisure passengers, such as the growth of premium-economy cabins or the development of business-class seats
Global air traffic (in millions) Domestic International Year 4224 2918 2015 4499 3122 2016 4812 3839 2017 5137 3632 2018 5304 3738 2019 2401 936 2020 3480 1644 2021
Source: ACI World
AVIATION GLOBAL AIR TRAVEL
more suitable for traveling as couples or groups.
Covid-19 and its effect on air control traffic Last year marked the end of ten years worth of consistent growth in global passenger traffic. The ongoing pandemic managed to bring the airport around the world to a virtual halt in the second quarter of 2020, resulting in airport traffic revenue losses across all regions. While many countries have since then started to gradually reopen many parts of their economy, many states were confronted with more brutal waves of infection, and several states and countries decided to reimpose lockdown to control the spread of the virus.
Countries like France, Poland, Canada, India, and Chile had to increase or re-instate partial lockdowns in an effort to control the spread of a second, third, or even fourth wave of infection. While most countries have moved away from complete lockdowns, and currently they are trying to limit the infections with targeted and less disruptive restrictions, there are a large number of states and countries that have retained either partially or totally restrictive regulations for international travel including self-quarantine on arrival. 2020 represented a 64.6 percent decline in global passenger traffic compared to 2019. Europe and the Middle East were the two most impacted regions with similar declines of 5 percent compared to the projected baseline.
The Asia-Pacific region started recovering earlier and faster than other regions and ended the year by registering a decline of 61.3
Unemployment impact of Covid-19 on industries supported by air transport worldwide
(in millions) Middle East 0.9 Africa 2 North America 2 Latin America 2.9 Europe 5.6 Asia Pacific 11.2
percent. Asia-Pacific, however, recorded the highest traffic loss of all regions with a loss of 2.15 billion passengers in 2020. Comparatively, Latin America-Caribbean was the least impacted of all regions posting a decline of 61.1 percent. After the ‘great lockdown of 2020’, international passenger traffic was virtually non-existent in the second half of 2020 and international passenger volume ended with below 1 billion passengers, which is 75 percent less compared to 2019. Globally, domestic traffic volume for 2020 was recorded slightly above 2.4 billion passengers, a decline of 54.7 percent compared to 2019 volume.
Air tickets are set to become more expensive As the pandemic hit, a lot of air carriers had to borrow money to stay afloat and cope with high daily cash burn rates. The airlines' industry collectively amassed more than $180 billion worth of debt in 2020, which is ironically very close to the amount of revenue collected that year. And with debt levels still rising, it has become even more difficult to repay those loans back. In order to recuperate these costs, ticket prices are going to get higher. Experts estimate that ticket prices are going to rise by 3 percent and as air travel slowly returns to normal, it will likely outpace supply initially. But it will also take time for airlines to restore capacity, and this will bring delays in bringing aircraft back to service, and crew retraining might result in a demand gap, resulting in higher short-term prices. For some other cases, airline rescue efforts provided by the country's government come with strings attached. We are already witnessing a reemergence of, or increase in, the level of state ownership and influence. For example, TAP Air
Portugal, Lufthansa Group, and AirBaltic all received state aid along with an increase or reintroduction of government shareholdings.
The surge in travel for the second half of 2021 Currently, we are undergoing the biggest vaccination campaign accompanied by positive signs and prospects of recovery. With the Covid-19 pandemic slowly subsiding, travelers and industry stakeholders are eager to resume traveling. Additionally, industry experts have also forecast a surge in travel for the second half of 2021, with some terming the comeback of the aviation industry with a “postwar like a surge” in travel.
Even then, there has been a lot of uncertainty surrounding the recovery of the aviation sector. It is imperative that governments around the world have to learn to strike the balance between supporting the airline industry and how to preserve conservation by taking specific measures. But it is important to keep in mind that government interventions can have ambiguous effects on competition. With an effective vaccination campaign largely distributed in the second half of 2021, and added enthusiasm from passengers to start flying again in the second half of 2021 will add to its recovery. The third and fourth waves of infections are possible but rapidly contained and limited to specific regions. But, the fear to travel is still largely present among the population, along with prolonged economic downturn and slow airline fleet recovery. The third and fourth waves of infections are likely and could spread to multiple regions.
Based on these developments, it is predicted that global passenger traffic is now expected to recover to 2019 levels in 2024 and, most of it will be driven by the recovery of domestic passenger traffic. Globally, domestic traffic accounts for 58 percent of total passenger traffic as of 2019. If new variants of the virus are effectively contained, even then, it will take airlines at least 2023 to recover to the 2019 levels. The recovery of international passenger traffic will require one more year, thus getting back to 2019 levels only in 2024. In the long run, it is predicted that global traffic may take up to two decades to return to previously projected levels.
editor@ifinancemag.com
Providing safe, convenient, and rewarding payment experience to drive Thailand’s cashless society
Mr. Yol Phokasub
Central JD Fintech Group is a result of a business partnership between Central Group, Thailand’s leading retailer and omni channel businesses in Thailand and Digi-Lifestyle, and JD.com, one of the world’s Top 3 largest e-commerce businesses and the most profitable retailers and JD Technology, one of the leaders of technology in China. The company was established as part of a joint venture of Financial Intelligent Platform Services Development Company and digital technology and fintech services in Thailand with the value of over $250 million.
This year, Central JD Fintech Group won in the ‘Best New Fintech Company’ and ‘Best New Digital Payment App in Thailand’ category at the International Finance Award 2021. Notably, this is the first time a Thai company has won two awards on an international platform in the fields of fintech and digital payments.
The group management undertakes by a holding company, Central JD Fintech Holding Co., Ltd. and conducts key business operations by its two subsidiaries which are: Central JD Money Co., Ltd., providing electronic wallet service (Dolfin e-wallet) and digital payment business (e-payment) and Central JD Company Fintech Co., Ltd., providing digital intelligent platform that offers various of products according to customer needs, including credit services, insurance services, as well as other financial products/services. With the digital technology services, Central JD Fintech Group is ready to provide the digital technology to enhance the quality of life with the intelligent platform, ready to move Thailand into a full digital society.
Central JD Fintech, a company that combines the unparalleled expertise in Digi-Lifestyle from Central Group – Thailand's largest retailer – with advanced technologies and innovation from JD Technology, China's digital technology leaders, has provided digital financial solutions such as e-payment, digital lending, and e-insurance through ‘Dolfin application’. The company’s goal is to become Thailand's premier e-finance and fintech service provider, leveraging cutting-edge technology to excel in all aspects of personal finance management to make digital financial services available to all sections of Thai society.
It aims to achieve its goal by improving Thai’s quality of life and preparing them for the transition to a fully digital, cashless society, together with accessible financial innovations that satisfy different demands on an individual level through the integration of financial technology, AI (Artificial Intelligence), and Big Data Analytics. Through their world-class innovation, this e-wallet provides unrivaled safety and simplicity for Thai shoppers on any payment occasion. Today, the Dolfin application has over 3 million users.
Mr. Yol Phokasub, Chairman of Central JD Commerce Company Limited and Director of Central JD Fintech Company Limited said, “As a result of the Covid-19 pandemic and digital disruption, the consumer market and consumer lifestyles are transitioning to the digital age. The
demand for financial services via digital channels has grown at an exponential rate. We have developed a smart platform, Dolfin, which offers complete digital financial solutions that make digital financial services accessible to all Thais, while elevating their quality of life and transforming lifestyles for the fully cashless society.
“We offer e-payment, digital lending, and e-insurance services through the Dolfin application that provide our customers with easy-to-use financial services. Since the launch of the application in 2019, the application now has over two million registered users. We consider these two prestigious awards we received as confirmation of our full dedication, and it also portrays the full willingness of Central JD Fintech to provide world-class digital financial solutions”.
Dolfin is the first application in Thailand to employ e-KYC
Dolfin is Thailand's first e-wallet application to use e-KYC (electronic know-your-customer) for user identification verification throughout the registration process, combining the capabilities of face recognition and optical character recognition (OCR) technology to ensure the highest level of security. Precise face recognition and OCR technologies are applied to ensure complete confidence in the platform's security while also allowing for a much friendlier user experience during the sign-up process – both created and optimized to meet actual usage circumstances in Thailand. The Bank of Thailand's regulatory sandbox has passed and certified this industry-revolutionizing technique for public use.
Customers can successfully become Dolfin Wallet users and enjoy the secure and convenient e-wallet and e-payment services with just two simple steps for ID card scan and face scan. Customers' information will be securely validated against a trusted government database, and their identity will be confirmed using biometrics recognition technology.
The only Thai e-wallet with open-loop merchant networks
Dolfin Wallet, with its goal of providing the finest e-payment experience to its users, offered a variety of payment alternatives, including close-loop with Dolfin's own merchants and open-loop via the PromptPay infrastructure, which has over 6 million payment points. Since early 2021, Dolfin Wallet has also been authorised by the Bank of Thailand to allow users who have completed e-KYC to make payments at PromptPay acceptance locations around the country without having to physically validate their ID card using a card reading device, as was previously required.
Moreover, Dolfin Wallet, the first e-wallet operator in Southeast Asia and the second in Asia, debuted its payment by QR credit card with VISA and Mastercard in September 2021. Users of Dolfin Wallet would be able to make e-payments with their credit cards without having to carry their actual cards to numerous QR credit card acceptance sites. Furthermore, they will be able to obtain all perks from the card issuer in the same way as they would if they used their physical credit card.
Dolfin's digital lending products, namely Dolfin Money, use advanced big data analytics to develop an information-based credit underwriting model that provides a fast and simple digital lending platform where an applicant does not need to provide any documents, either physically or electronically, and the loan approval can be done in a matter of minutes using the pre-active approval approach. Dolfin Money was established in July 2020 as a cash loan option as well as a ‘Buy Now Pay Later’ option to meet the needs of the applicant.
In May 2021, Dolfin platform also launched digital insurance brokerage service, namely Dolfin Insure, to offers new experience to purchase insurance with fully digital process which Dolfin customers will be offered preliminary instant-protection with the reasonable premium price by risk-based pricing model through AI and big data analytic that relevant with multiple driving behavior factors and car insurance claim history.
INDUSTRY INSIGHT ENERGY RENEWABLES CLIMATE GOALS
Renewables key to achieving climate goals
IF CORRESPONDENT
Just words won't solve global warming. Perhaps, a rational execution-based structure with public-private partnerships would. Global climate summit at Glasgow, Scotland 2021 concluded with a mutual agreement of approximately 200 nations to work together for combating the global climate crisis. New pledges were taken up by leaders mainly on deforestation, coal financing and methane gas pollution, to name a few. Moreover, the US-China deal and carbon trading stirred the global media.
However, many climate activists, politicians and legal experts weren't convinced much by the hoax promises and political gimmick. They believe the demand for a pragmatic execution approach to combat climate change is the need of the hour. Though the Covid-19 pandemic was a nightmare, it bestowed the urgent need for sustainability and renewables.
The ozone layer self-replenished the bizarre void, air quality index improved, and reduced carbon emissions which were all the indirect positive consequences of the Covid-19 lockdown in many countries. Nations took the oath unanimously to achieve net-zero carbon emissions in the imminent future. But mere words and pledges wouldn't solve such a massive global crisis. It would need a higher degree of international collaborations, public-private partnerships, new policies, subsidizing and promoting electric vehicles, making EV infrastructure robust, and much more.
The year 2020 witnessed the instant surge of clean energy demand. The addition of 260 GW of renewable energy was 50 percent higher than the 2019 total renewable energy capacity. However, we are still behind the net-zero carbon targets, penetrating EVs into automobile markets and building a sustainable lifestyle.
For these, we need profound policies, new and better technologies, and the involvement of young entrepreneurs. Here are the rational and pragmatic actions to catalyse sustainable energy and the use of renewables by combating the global climate crisis.
Every year calls to cut global greenhouse gas emissions grow louder, yet emissions remain unsustainable. International climate targets demand emissions to peak as soon as possible and then quickly drop to net-zero levels by the second part
INSIGHT ENERGY
together to combat the global climate crisis
of this century. The energy sector accounts for the great majority of global CO2 emissions, emphasizing the need for a greener energy system. The Covid-19 pandemic reduced global carbon dioxide emissions in 2020. However, without systemic reforms to the energy sector, this reduction will be only temporary.
The fast expansion of usage of wind energy, solar energy, and electric vehicles has demonstrated the ability of new clean energy sources to reduce emissions. Net-zero emissions will necessitate the deployment of these technologies on a much larger scale, in tandem with the development and widespread deployment of many other clean energy solutions currently in the early stages of development, such as numerous applications of hydrogen and carbon capture. The IEA's Sustainable Development — a path for attaining international climate and energy targets — envisions the global energy system reaching net-zero emissions by 2070, integrating behavioural changes as well as a fundamental shift in energy system technology.
The research focuses mostly on the sustainable development scenario, but it also contains a parallel Faster Innovation Case that investigates the technological implications of attaining worldwide net-zero emissions by 2050. The report tries to analyze the obstacles and possibilities involved with a quick transition to clean energy. The paper examines all aspects of the energy system – from fuel conversion and power generation to aviation and steel manufacturing. It also includes all forms of renewable energy such as hydro energy, solar energy and wind energy.
Role of government to reduce carbon emission Some countries have already enacted or proposed net-zero laws, while others are debating their net-zero initiatives. Many businesses have also declared carbon-neutral goals. Governments and corporations can be encouraged by the success of renewable energy technology. However, meeting these objectives will necessitate a far greater focus on the transportation, industrial, and construction sectors, which now account for more than 55 percent of CO2 emissions from the energy system.
INDUSTRY INSIGHT ENERGY RENEWABLES CLIMATE GOALS
Countries using wind and solar power most (2020)
Germany- 42% The UK- 33% Australia- 17% Turkey-13%
Governments have a disproportionate role to play in facilitating transitions to net-zero emissions. Long-term aspirations must be supported by thorough clean energy programmes that include actions suited to local infrastructure and technological requirements. Policy toolkits need to be implemented to catalyse the reduction of carbon emissions.
Taking action to reduce emissions from existing assets would be highly beneficial. If the government tries to enhance markets for innovations in their early stages of adoption, that would help innovators to deliver products faster. Creating and improving infrastructure would allow the deployment of technologies at the earliest. Furthermore, increasing funding for research, development, and demonstration would make the innovations impeccable and would lead to world-class products. This would lead to an increase in international technological collaboration as well.
Economic stimulus measures in response to the Covid-19 problem provide a critical chance to take immediate action that may improve the economy while also promoting clean energy and climate goals, including the five sectors listed above.
Effective government action is required to boost the early adoption of renewable energy technology. The aim is to incentivize their use in order to close the cost and performance gap with conventional technologies. They have a significant role to play in making this happen, maximising private capital contributions through proper laws and regulations, and ensuring that all linkages in clean energy technology value chains are handled. Solar photovoltaics (PV) and lithium-ion (Li-ion) batteries are two instances of how technological design has resulted in remarkable advancements.
How can the Government implement renewable technologies? Clean energy technologies benefit from market-pull mechanisms. Stimulating demand for clean technology, goods, and services makes them more marketable. Market deployment increases economies of scale and learning-by-doing, which helps to enhance technical performance and lower costs. Depending on the complexity of the value chain and the value to consumers, among other variables,
How oil prices have changed in the past 20 years Countries leading in per-capita Co2 emissions (in metric tons)
Country 2001 2011 2021
Australia $0.57 $1.23 $1.13 Brazil $0.90 $1.60 $1.13 China $0.40 $1.10 $1.17 India $0.60 $1.16 $1.38 Iran $0.22 $0.18 $0.06 Malaysia $0.28 $0.58 $0.48 Nigeria $0.28 $0.41 $0.40
different technologies will necessitate different deployment incentive methods.
Following the market launch, R&D support will be maintained. Supporting a dynamic portfolio of competing concepts at various degrees of maturity for each priority area increases success prospects, as does favouring solutions with quick innovation potential. Historical data demonstrates that continued R&D is necessary even after commercialization to drive the creation of new designs and components, as well as to reduce costs and enhance performance. Diversity and competitiveness assist in accelerating growth while also leaving room for unforeseen occurrences.
Final electricity consumption doubles under the sustainable development scenario. This expansion is being driven by the usage of electricity to power automobiles, buses, and trucks, generate recycled metals and provide heat for industries, and supply the energy required for heating, cooking, and other appliances in houses.
According to the faster innovation case, electricity output in 2050 will be approximately 2.5 times more than it is today, necessitating a pace of development comparable to adding the whole US power industry every three years. Meanwhile, annual additions of renewable energy generation would need to be around four times the current record, which was set in 2019.
In addition to the increasing need for energy from various sectors of the economy, a significant amount of new generation is required for low-carbon hydrogen. In the Sustainable Development Scenario, the worldwide capacity of electrolyzers, which create hydrogen from water and energy, increases to 3300 GW from 0.2 GW. These electrolyzers would take twice the amount of power that the People's Republic of China generates today to produce the low-carbon hydrogen required to achieve net-zero emissions. This hydrogen acts as a link between the power industry and businesses where direct usage of energy would be difficult.
Capturing CO2 emissions in order to utilize or store them sustainably (known as CCUS) is a critical technology for achieving net-zero emissions. CCUS is used in the Sustainable Development Scenario to produce synthetic low-carbon fuels and to remove CO2 from the atmosphere. It is also critical
INSIGHT ENERGY
Saudi Arabia 17.6 The US 17.6 Canada 15.7 Australia 14.9 South Korea 13.3 Japan 10.4 Germany 10.4 Russia 9.8 Iran 8.3 The UK 8.1
INDUSTRY INSIGHT ENERGY RENEWABLES CLIMATE GOALS
Countries using wind and solar power most (2020)
China 895 The US 292 Brazil 150 India 134 Germany 132 Canada 101 Japan 101 Italy 55 France 55
for manufacturing some of the low-carbon hydrogen required to achieve net-zero emissions, namely in areas with low-cost natural gas supplies and sufficient CO2 storage. Simultaneously, the usage of contemporary bioenergy triples from current levels. It is used to either directly replace fossil fuels (e.g., biofuels for transportation) or to indirectly offset emissions through its use in conjunction with CCUS.
The stability of today's global energy system is largely supported by developed global markets in three primary fuels—coal, oil, and natural gas— which account for around 70 percent of worldwide energy consumption. In the Sustainable Development Scenario, electricity, hydrogen, synthetic fuels, and biofuels account for a similar amount of demand as fossil fuels do now.
Policies and innovations to deliver wind energy, solar energy efficiently to the masses is the need of the hour. It's the only way we can make an imminent improvement in the use of sustainable energy to reduce greenhouse gas.
Biomass energy is the most versatile renewable energy on the list. It has the unique ability to be used as a fuel in solid, liquid, and gaseous forms. With the excessive use of biomass, we can curb the greenhouse gas caused by the consumption of fossil fuels.
The hydrogen solution is going to be the miracle solution to achieving climate goals. Theoretically speaking, the major consequence of using hydrogen would help to store surplus renewable energy when the power grid cannot gulp more than its capacity. It could be the replacement of petrol, diesel in transportation, which constitutes the 3rd largest factor of climate change. It could act as a replacement of fossil fuels in fuel and chemical production as a nil carbon feedstock.
Heavy industry and transportation role in the reduction of carbon emission: Energy efficiency, material efficiency, and avoided transportation demand (e.g., substituting walking or cycling for personal automobile trips) play key roles in decreasing emissions in long-distance transportation and heavy industries. Hydrogen and CCUS are responsible for almost half of all emissions reductions in the steel, cement, and chemical sector. The utilization of alternative fuels like hydrogen, synthetic fuels, and biofuels ranges
Clean energy investment globally 2019 ($)
China 83.4 bn US 55.5 bn Japan 16.5 bn India 9.3 bn Brazil 6.5 bn Australia 5.6 bn UK 5.3 bn UAE 4.5 bn
Source: Statista
INSIGHT ENERGY
between 55 and 80 percent in the trucking, shipping, and aviation sectors.
Reaching net-zero emissions will be dependent on how we manage the emission challenges posed by these industries' long-term assets, many of which were recently developed in Asian economies and will be operational for decades. The circumstance emphasises the importance of hydrogen and CCUS technology. It will be vital to ensure that new clean energy technologies are ready in time for major investment choices. Strategically scheduled investments in heavy industries, for example, might help save around 40 percent of cumulative emissions from current infrastructure in these sectors.
The electric power sector decarbonizer contributes more to emission reductions. Electrification constitutes approximately 20 percent of cumulative savings relative to the Stated Policies Scenario in 2070, making it the greatest single contributor to CO2 abatement. The role of CCUS (Carbon Capture, Usage, and Storage ) would be vital because the function of CCUS evolves during the projection period. Initially, the emphasis is on decarbonizing existing assets in the power sector and heavy industries, but over time, the emphasis switches to carbon removal from the atmosphere, offsetting emissions in sectors where they are difficult to reduce. CCUS contributes the fourth-largest share of cumulative emission reductions in 2070, accounting for 15 percent of the total.
While sustainably generated bioenergy plays an essential role in reducing emissions in the short future in the Sustainable Development Scenario, such as in transportation, it also offers extra potential in other sections of the energy sector, such as industrial uses. Hydrogen with a low carbon footprint and synthetic fuels such as ammonia and synthetic hydrocarbon fuels can be used. The usage of these fuels will grow over time across many sectors and lead to a 6 percent reduction in emissions by 2070. These four technology families are crucial for decreasing emissions, particularly in sectors with difficult-to-lower emissions, such as manufacturing and long-distance transportation. However, the increasing awareness and accessibility to different technologies will help these industries implement those changes.
editor@ifinancemag.com
Bank is driven by its vision, 'To be the world’s most respected African Bank’. With more than 49 million customers, presence in 17 countries and more than 600 branches worldwide, it’s easy to say they are well on their way to making this a reality.
Strong growth expectations across the African continent have led Access Bank to invest in a robust expansion strategy which is supported by its extensive experience in the oil & gas sectors, and the largest retail network in Africa.
With the group's expertise, easy access to international markets and teams of highly qualified and experienced professionals, Access Bank has positioned itself as the strategic partner of choice for companies and public-private institutions. It has its sight set on stimulating the growth of its network in international trade and payment centres, using this as a platform to showcase Africa’s potential to the rest of the world.
Access Bank universally employs over 28,000 people in its operations in Nigeria, the UK, The Gambia, Zambia, Kenya, Rwanda, Congo, Sierra Leone, Guinea, Ghana, South Africa and Mozambique along with representative offices in China, Lebanon, India, and the United Arab Emirates.
17 49 600
million customers countries branches worldwide
Access Bank serves the various markets through four business segments: Retail, Corporate, Commercial and Corporate banking.
Supported by values such as excellence, innovation, leadership, empowered employees and a passion for customers, Access Bank sets standards for sustainable business practices that nurture and unleash the talent of its employees, adding value to customers and providing innovative solutions to the markets and communities it serves. It is guided by ethical behaviour and maintains strong compliance policies, anticipating and mitigating against risks associated with banking.
TECHNOLOGY IN CONVERSATION HISASHI TANIGUCHI CEO OF ZMP
ZMP started selling its products in 2016 and have installed it in 300 companies
Revolutionising the robotics industry in Japan
PRITAM BORDOLOI
Founded in 2001, ZMP is a Japanese robotics company, and it is based on the researched results that encourage the Kitano Symbiotic System project, and it is under the jurisdiction of Japan’s MEXT. Their first product, the humanoid robot PINO debuted in 2001. ZMP also released the humanoid robot Nuvo in 2005 along with the music robot Miuro in 2006. In 2009, the company released Robo Car, targeting the next generation. In 2008, ZMP and 3 other Japanese robot companies teamed up to promote the diffusion of robotic technologies in everyday life. Titled, Association for Market Creation of the Future Generation Robots', it gained a lot of attention in the Japanese robotics market. In 2015, Sony and ZMP teamed up to form a joint venture called Aerosense which was used to create commercial drones for the survey and inspection of difficult to access areas. Following that, Aerosense also released videos of two prototypes. ZMP started selling its products in 2016, and at present, more than 300 Japanese companies have ZMP products installed.
In an exclusive interview with International Finance Magazine, ZMP Chief Executive Officer Hisashi Taniguchi discusses the history of the company, Japan’s Robotics industry, the company’s product and services, and the vision for the company among other things.
IFM: Can you tell us a bit about the Robotics market in Japan? What are some of the changes we can expect to witness in the coming years?
Hisashi Taniguchi: In the last few years, logistics robots in factories and warehouses have started to spread rapidly. In addition to manpower saving due to the shortage of labour, the recent pandemic has also accelerated this.
TECHNOLOGY ROBOTICS
Image: www.japantimes.co.jp
There are only a few domestic companies with some experience in this field, on the other hand, cheap imports from China and India are increasing.
In the future, users will be looking for solutions that can be installed on a full scale, have the reliability to operate stably and automate entire factories and warehouses. This will require not just a single robot, but a holistic solution that works together with a variety of IT systems and external devices, such as our Robo-Hi.
Can you tell us about ZMP’s logistics support robot CarriRo series?
We started selling the product in 2016 and have installed it in a total of 300 companies. We offer three main types of robots to cover all logistics in factories and warehouses.
The first is a cart-type robot that follows the operator, that tows a variety of cage carts and a pallettype robot that can get underneath pallets to transport palletized goods.
The second type is the unmanned forklift, a walkie type and a reach type.
The third type is the automatic towing of 1.5, 5 and 25 tonne cargo trolleys between factories, warehouses and other buildings, both outdoors and indoors.
How can robotics reshape the logistics sector in the future? How can robots improve the supply chain?
Until now in the logistics industry IT systems have been split up into separate systems such as inventory management systems (WMS), picking systems and berth management systems for managing trucks. Conventional external control devices such as PLCs and RFID have also been added as required, but all independently.
By using ROBO-HI to link CarriRo, IT systems and external devices, the entire supply chain can be optimised. ROBO-HI provides a solution to improve the productivity of the entire supply chain.
What are some of the challenges the robotics market will have to overcome in the near future?
At present, most of the products are offered to large companies that have the financial resources and skills to introduce new products.
Therefore, it is important to greatly improve the ease of use and reduce the cost through further mass
TECHNOLOGY IN CONVERSATION HISASHI TANIGUCHI CEO OF ZMP
production so that even SMEs can easily and cheaply introduce the system.
Can you tell us a bit about the ‘CarriRo Connecting Partners’ programme?
This is a duplicate of the answer to question 3, but we currently have nearly 20 companies participating.
We would like to increase this number to over 100 to provide solutions and support throughout the country. We are also planning to establish a similar network overseas.
The demand for autonomous delivery robots is on the rise and has picked up since the pandemic. What is the potential for your Delivery robot DeliRo? How do you see this segment expanding?
The pandemic has increased the demand for noncontact services internationally. The Japanese government is concerned by the fact that Europe, the United States and China have already deregulated their services. They are about to lift the ban on the use of remotely monitored delivery robots on public roads.
ZMP has been conducting ongoing demonstration tests with Japan Post since 2017. ZMP has also partnered with ENEOS since 2020 to conduct a food delivery last mile demonstration to turn gas stations across Japan into robot stations.
We have also received many enquiries from service players in other industries, and we are confident that 2022 will be the year of delivery robot services in Japan.
What is your vision for the company going forward? Where do you see ZMP in the next 10 years?
Since last year, our vision is to "robots into social infrastructure". We are laying out RoboMap, a map for automated driving, as infrastructure not only in warehouses and factories, but also throughout the city, including the roads we travel on.
ZMP has teamed up with a leading urban design company to create a nationwide infrastructure called RoboTown.
ZMP is also providing RoboMap and Robo-Hi as infrastructure for condominiums, office buildings, shopping centres and other commercial buildings, train stations, hotels, schools and hospitals that are currently under construction or that will be under We are laying out RoboMap, a map for automated driving, as infrastructure not only in warehouses and factories, but also throughout the city, including the roads we travel on
construction in 2023. In 2023 and beyond, buildings will have multiple robots passing through security gates, getting in and out of lifts, delivering packages to each floor and cleaning. We want to take Japan's achievements to the world.
How has Covid-19 impacted your business as well as the market? What is the outlook for the robotics market in the next five years?
Sales of autonomous driving development support solutions for the automotive industry, which require visits to test courses and companies, fell sharply when these were banned, but began to recover in autumn after the emergency declaration. We expect demand for autonomous driving of EV buses and EV trucks to increase as society becomes more carbonneutral in the future.
We expect demand to increase.
CarriRo, RakuRo, DeliRo and PATORO are growing on the back of labour shortages and the rise of contactless services, and we expect them to grow impressively from next year onwards as a result of deregulation.
editor@ifinancemag.com
Alistithmar Capital Changing the financial landscape of Saudi Arabia
Riyadh-based Alistithmar for Financial Securities and Brokerage Company (Alistithmar Capital) is a major player in the financial services industry. The company offers a wide range of products and services like asset management, brokerage and investment banking. Over the past couple of years, the company has achieved significant growth in AUM with broadened product and services offering and delivering superior performance.
Superior Performance
In terms of performance, Alistithmar Capital’s public equity funds have significantly outperformed their respective benchmarks in 2021 on a year to date basis. This was a repeat of the stellar performance of these funds in 2020 and 2019. This success was a result of leveraging the company’s research capabilities, fund managers experience, advanced infrastructure, and dynamic investment philosophy. In fact, Alistithmar Capital’s public equity funds demonstrated their superior performance against their respective benchmark not only on an annual basis but also over longer time horizons. In the 3 years and 5 years categories, these funds continued to produce significant excess returns over respective benchmarks.
The funds’ performances not only stood out against the respective benchmark but also against their respective peers. Alistithmar Capital’s flagship funds SAIB Saudi Equity Fund and SAIB Saudi Company Fund ranked in the top quartile against their respective peers in 2021 on year to date basis, which was also witnessed in 2020 and 2019. Similarly, these funds at the end for the periods in question also ranked in the top quartile against peers in the three years and five years categories respectively. This showcases the investment team’s adaptive decision making and consistent selection capabilities.
Increasing Business
On the business size aspect, Alistithmar Capital experienced significant growth in the value of the assets they manage. By the end of September 2021, the company’s AUM increased to SR32 billion ($9 billion) from SR5 billion ($1 billion) at the end of 2017. Alistithmar Capital’s AUM increase in the reference period
is +515 percent which notably outpaced the industry’s AUM increase of +89 percent during the same period. Additionally, the company’s ranking has improved from being ranked number 13th by the end of 2017 to being ranked 6th by the end of Q3 2021 in terms of AUM. This was also seen in the Alistithmar Capital’s AUM share of total AUM where it has increased to 4.3 percent from 1.3 percent for the same period. This increase in value and share reflects investors’ appreciation of the company’s superior performance and outstanding customer service.
Regarding the real estate unit of the firm, Alistithmar Capital has also successfully launched a series of private real estate funds, all of which offered its investors a unique opportunity to participate in prime real estate investments in Saudi Arabia. The latest real estate fund launched was Kaden Alistithmar Fund with a size of SR2 billion, which invested in high-quality income-generating real estate assets. The fund was fully subscribed before the end of the subscription period reflecting investors’ confidence in the company.
The Saudi government launched the Financial Sector Development Program in 2017 that aims to develop the financial sector. In relation to the asset management industry specifically, the program set a number goals such as increasing the value of managed assets, attracting foreign investors, and increasing investment products, which Alistithmar Capital was able to build a strategy to benefit from these goals as displayed by a surge in AUM and product offering.
Outstanding Service
In terms of the Alistithmar Capital brokerage unit, the company was able to successfully execute clients’ transactions of over SR70 billion annually from the period 2017 – year-to-date 2021. In addition, the firm was able to maintain its leading position in a growing market. The Saudi equity market traded value registered an increase of around 148 percent during the period. Despite this remarkable increase in value traded, the firm sustained its ranking in the top ten in each of the years for the period in question.
It is important to acknowledge the changes taking place in the brokerage industry. The Saudi market has hit an important milestone when it was included in a number of global equity indices (the MSCI Emerging Markets Index, FTSE Russell Emerging Markets, S&P Dow Jones Emerging Market Indices) during the period. This development resulted in an increased number of foreign investors and a significant increase in trading activities. Nevertheless, Alistithmar Capital has built up its capabilities throughout the years to benefit from such a trend as evidenced by the successful handling of the annual transaction value and maintaining a leading position in the industry.
The future direction
SAIB Saudi Companies Fund vs Benchmark
113.0% 113.0%
39.6%
27.6% 52.3% 66.3%
YTD 3 Years 5 Years
SAIB Saudi Companies Fund Benchmark (S&P Saudi Sharia)
SAIB Saudi Equity Fund vs Benchmark
105.0% 118.7%
38.2%
23.9% 39.7% 53.7%
YTD
SAIB Saudi Equity Fund 3 Years 5 Years
Benchmark (TASI)
plan for 2021–23 where they aim to further develop the Saudi market and make it an attractive place for local and foreign investments. The main pillars of this strategy are to facilitate funding, encourage investment, promote confidence and build capacity. The plan offers many exciting details such as increasing the AUMs as a percentage of GDP from 17 percent in 2019 to 27 percent in 2023, as well as increasing the number of listings annually. Alistithmar Capital aims to leverage its expertise to develop its own strategies based on these governmental strategic plans so that it can not only benefit but also respond more effectively to any future changes in the Saudi financial markets landscape. The company will continue to invest in people, processes, and systems to cater to an even wider range of clientele. It is Alistithmar Capital’s continuing mission to create value for its investors by delivering outstanding performance, increasing the value of assets under management, sustaining a leading position in brokerage, increasing product offerings and refining the overall customer experience. Meeting the expectation of current customers has always been a priority and in order to continue serving effectively, as well as attracting new clients, Alistithmar Capital will leverage its current technological capabilities, adopting new technology where necessary, to refine and expand its reach. The company is looking forward to exploring future opportunities in the Saudi Arabian financial markets.
