ISSUE 9 | AUG - SEPT 2012
A practical guide to going global
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The Visionary Ali Rashid Lootah’s journey with Nakheel
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Patience and resilience
Group COO Nadeem Hood
Dubai is defined by its larger-than-life infrastructure and commitment to excellence. So when, Nakheel got into trouble a few years back, it impacted the entire Emirate.
Managing Director Richard Judd richard@cpidubai.com +971 4 440 9126 EDITORIAL Senior Editor Aparna Shivpuri Arya aparna@cpidubai.com +971 4 440 9133 Contributing Editor Mike Byrne mikeb@cpidubai.com +971 4 440 9105 ADVERTISING Sales Manager Sami Sabbah sami@cpidubai.com +971 4 440 9152 PRODUCTION AND DESIGN Production Manager James P Tharian james@cpidubai.com +971 4 440 9146 Database and Circulation Manager Rajeesh M rajeesh@cpidubai.com +971 4 440 9147 Design Director Ruth Sheehy ruth@cpidubai.com Head of Design Fahed Sabbagh fahed@cpidubai.com +971 4 440 9107 Designer Froilan A. Cosgafa IV froilan@cpidubai.com +971 4 440 9107 Photographer Jay Colina jay@cpidubai.com +971 4 440 9108 DIGITAL SERVICES www.tradeandexportme.com Digital Services Manager Tristan Troy Maagma Web Developer Abey Mascreen
We cannot even begin to imagine how herculean the task must have been to restructure Nakheel. But one man did it- Ali Rashid Lootah, by being resilient and patient. And it was indeed an honour to get some time with him and to understand his modus operandi and how he has restored faith in the organisation. Just this month, Nakheel’s profits have jumped by 36% for the first half of the year! Turn to page 10 for all the details. Continuing with our efforts to highlight business and trade opportunities for our readers – we also bring you the story of the Dubai Airport Free Zone (DAFZA), on page 18, to highlight the USP of this free zone and what makes it the ideal hub for doing business. As part of the magazine, we have decided to focus on certain countries to highlight the trade and business potential for the Middle East businesses. And so, we took a very long flight! Oh yes...15 hours to reach Sao Paulo, as part of a Food Buyers Event, organised by the Arab Brazilian Chamber of Commerce. It was an extremely interesting business-matchmaking event, where big food buyers, such as Choitrams, Spinneys, Federal Foods, Lulu, met with Brazilian food producers and suppliers, to explore direct trading opportunities. We also got the chance to catch up with a number of government bodies, which are working on ensuring all products are halal certified. So if you are keen on importing products, which are of good quality and reasonably priced, turn to page 40 to get all the answers. Moving on, in this issue, we have covered a range of other interesting topics. So grab a copy to read about the laws dealing with dishonoured cheques and business opportunities in Qatar and Lebanon. We hope, as always, that you’ll enjoy the read. Please do get in touch with us on Facebook, Twitter or Linkedin. We always like to hear from you.
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ISSUE 9
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GLOBAL WATCH: International news and trends with domestic trading relevance.
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REGIONAL TALK: A snapshot of the developments and trends in the Middle East region.
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INTERVIEW: We caught up with Mr. Ali Rashid Lootah, Chairman, Nakheel, to find out how he revamped Nakheel and why is this the right time to invest in Dubai.
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LEGAL: Dishonoured cheques are a recurring problem and have been on the rise since the onset of the financial crisis. Hassan Arab, Regional Head of Litigation, Al Tamimi & Co, puts forth some recommendations that aim to eliminate some perceived discrepancies in the law and contradiction among rulings.
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FREE ZONES: Aparna Shivpuri Arya caught up with Jamal Bin Marghoob, Acting Director, Marketing & Corporate Communications Department, Dubai Airport Free Zone (DAFZA) to get the details on what makes the free zone special.
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OPPORTUNITIES: UAE and Qatar are among the hottest growth destinations, for some sectors, in the GCC. John Martin St. Valery, Founder and CEO, The Links Group, talks about the prospects that await us in these sectors.
CONTENTS
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HOW TO: Dr. Ashraf Mahate, Head, Export Market and Intelligence, Dubai Exports and Vice Chair, Economic Policy Committee, DED, explains to us how SMEs can innovate and capitalise on the global trends and opportunities for new markets.
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LOGISTICS: Freight and storage are an extremely important component of trade. Aparna Shivpuri Arya got talking to Kirit Mehta, Marketing Director and Founding Member, RSA Logistics, to know more about contract logistics and how it can be useful for businesses.
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FINANCE: In the first, of a two-part series, Paul Boots, Director, DMCC Tradeflow, looks into the history of trade in the Emirate and DMCC’s role in transforming Dubai from a trade port into a trade hub
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inVESTMENT: The Investment Development Authority (IDAL) highlights the sectors that offer lucrative business and trade opportunities to foreign investors in Lebanon.
INTERVIEW: Aparna Shivpuri Arya, caught up with Michel Alaby, Director General, The Arab Brazilian Chamber of Commerce, to pick his brain on Brazil’s relationship with the Arab world and what plans does the ABCC has to promote these ties TRADE RELATIONS: Brazil, though very far geographically, is becoming one of the closest trading partners of the Arab region. We bring you a detailed analysis of the bilateral trade relation, with special emphasis on the food sector. EVENT: In order to promote international business opportunities between the food producers and suppliers in Brazil and the supermarket chains in the Arab region, ABCC organised a Food Buyers Event in Sao Paulo in July. Aparna Shivpuri Arya brings you the exclusive coverage.
COMMODITY WATCH: Your guide to all things commodity.
40 community
focus
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EVENTS CALENDAR: A snapshot of exhibitions and conferences around the world and the region, which can help you spend less time planning and more time attending.
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Updates global watch
Foreign direct investment flows expected to rise Global foreign direct investment (FDI) flows picked up in 2011, in spite of economic uncertainty. QNB Group’s analysis of new FDI data suggests that there are structural reasons that are likely to further increase international capital flows in the coming years. The UN Conference on Trade and Development (UNCTAD) recently published its annual report on FDI flows. The data shows that global FDI (defined as foreign investments involving an equity stake of above 10%) rose by 16% in 2011, to USD 1.5trn. This is the third year of growth, and the level of annual investment is now back in line with the average seen in the years before to the global crisis, although it is still below the peak of USD 2trn in 2007. The sharp drop in 2009 was a result of the global credit crunch, which resulted in tight liquidity and falling asset prices, thereby causing companies to postpone FDI plans. The total stock of FDI now totals USD 20.5trn, equivalent to 29% of global GDP. Some significant trends underlie the headline figures. In particular, FDI to developing countries reached a new record in dollar terms in 2011. In relative terms, they received 51% of all FDI inflows in 2011, up from 33% in 2006. (These figures include some former Soviet countries, which
UNCTAD categorises as “transition countries”, within the developing countries group). In contrast to the developing countries, FDI inflows to developed countries in 2011 were still more than 40% below their peak level, although they were up 21% on 2010. As regards outflows, developed countries are still the source of most FDI. However, the share coming from developing countries is growing, and was 27% of global FDI in 2011, up from 17% in 2007. Looking ahead, the outlook is for further growth in FDI flows, provided that the global economy does not face another major shock. One reason for this positive outlook is the large cash pile that transnational corporations have built up over the past three years. During this period, corporate profits have remained reasonably stable, but the turbulent global economy has discouraged them from making capital investments at home and abroad. UNCTAD estimates that transnational corporations are currently sitting on around USD 5 trn of cash. Of this, at least USD 500 bn is estimated to be in excess of their usual level of cash holdings. This excess cash could therefore be rapidly deployed to boost FDI when conditions are suitable. An investment sentiment poll of major
OECD GDP Growth forecasts (2011-13) (% change in real terms)
World
US
Eurozone
4.2 3.6
3.4 2.6
2.4 1.7
1.5 0.9
-0.1 2011
2012
Source: OECD and QNB group analysis
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2013
transnational corporations suggests that whereas more are negative than positive about the conditions for investment in 2012, the majority are positive about the outlook for 2014. As a result, global FDI flows are expected to grow to around USD 1.9 trn by 2014, in part because of the deployment of this excess cash, and they may even exceed the 2007 peak. Another structural factor that could contribute to increased flows is the currently low level of FDI from sovereign wealth funds (SWF). These funds mainly make portfolio investments and only a few, such as Singapore’s Temasek and the Qatar Investment Authority (QIA), are active in taking larger ownership stakes. The total FDI stock owned by all SWFs is only about USD 125 bn, a tiny fraction of their total assets. A reallocation of some of their portfolio investments to FDI could have a noticeable impact on global flows. The status of FDI in the GCC is a mixed picture. Rising hydrocarbon revenues in 2011 prompted an increase in foreign direct investments by both SWFs and companies in the GCC, totalling USD 22 bn. Inflows to the region, however, fell for the fourth year in a row, to USD 26 bn, less than half their peak in 2008. The decline is due to global credit crunch and to the suspension and cancelation of various major construction projects in the region. However, FDI inflows to the region are likely to pick up again in the future. This is because there is a large pipeline of projects planned, particularly in Qatar, which will be partly financed with FDI. The FDI potential index which UNCTAD produces to assess countries’ attractiveness as destinations for FDI implies that the GCC is currently receiving fewer inflows than might be expected. Kuwait and Bahrain, in particularly, have been attracting considerably less FDI in recent years than implied by ranking for potential. Qatar is also expected to see an increase, as it ranks 1st in the world in terms of market attractiveness, a key component UNCTAD’s index.
India beats China in export growth
India has overtaken China in exports growth rate recording an increase of 16.1% in 2011, topping the list of all major trading countries in the world, says a WTO report. “India had the fastest export growth among major traders in 2011, with shipments rising 16.1% . Meanwhile, China had the second-fastest export
growth of any major economy at 9.3%,” according to the World Trade Report 2012. In 2010, China topped the list with shipment growth rate of 28.4%, while India recorded an increase of 22%. According to experts, the Indian government’s and exporters endeavour of diversification of export markets have benefited the country’s shipments. “Mainly the diversification of markets to Middle East countries, South East Asia and China have yielded good results for Indian exports,” Director of the country’s prestigious Indian Institute of Foreign Trade (IIFT) K T Chaco said. Federation of Indian Export Organisations (FIEO) President Rafeeq Ahmed also said market and product
diversification strategy have yielded positive results. After the economic slowdown in the India’s traditional export markets – the US and Europe, the government had extended incentives to exporters to explore new markets, including in regions like Latin America and Africa. In 2011, world merchandise trade volume grew by 5 %, while “Asia s 6.6% increase led all regions”, the report said. Further, it said that in commercial services exports, the European Union tops the chart with USD 789 billion worth of shipments, 24.8% of the world total. However, the report has put India, Indonesia and Argentina among the main countries imposing maximum non-tariff measures.
FDI into South Africa soars South Africa lead the subregion as foreign direct investment (FDI) inflows into sub-Saharan Africa jumped by 25% in 2011, according to the World Investment Report 2012 by the UN Conference on Trade and Development (UNCTAD). The UAE has contributed significantly to South Africa’s inflow of FDI as the 24th largest investor in South Africa, and the largest trade partner in the GCC region with total bilateral trade between the two reaching approx USD 2 bn in 2011. The report, released in Geneva, Switzerland on Thursday, shows that FDI inflows to sub-Saharan Africa soared from USD 29.5 billion in 2010 to USD 36.9 billion in 2011, a level comparable to the peak of USD
37.3 billion achieved in 2008, prior to the onset of the global financial crisis. FDI to South Africa rebounded from USD 1.23 billion in 2010 to USD 5.81 billion, making South Africa the second-biggest FDI destination on the continent in 2011 after Nigeria, which received USD 8.92 billion in FDI. Commenting on the increasing investment into South Africa from the UAE, Yacoob Abba Omar, Ambassador of South Africa for UAE said, “It’s evident to see that South Africa is a prominent investment destination for the UAE. Having set its Vision 2030 plans last year South Africa is showing immense signs of growth as an economically viable country with pledges including sustainability in renewable
Improved investor perceptions
energy, one which the UAE is keen on helping support with investment into this sector.”
Oil, gas producers still dominant Ghana (USD3.22 billion), Congo (USD 2.93 billion), and Algeria (USD 2.57 billion) completed the top five African FDI destinations by UNCTAD’s reckoning, underscoring the dominance of oil- or gas-producing countries – South Africa being the sole exception. For Africa as a whole, total FDI inflows declined. However, this was due to a drop in FDI to North Africa, with inflows to traditional strong performers Egypt and Libya coming to a halt as result of protracted political and social instability in those countries.
The continent’s FDI prospects for 2012 seem promising, as strong economic growth, economic reforms and high commodity prices have improved investor perceptions of the continent.” UNCTAD’s figures show that South Africa’s FDI inflows for 2011 accounted for 13.6% of Africa’s total, while amounting to 31.8% of the country’s gross domestic product (GDP) in 2011 – up from 9.9% in 1995. Jorge Maia, research head at South Africa’s Industrial Development Corporation, who presented UNCTAD’s report locally, said the country’s investment policy regime was “quite liberal compared to other countries”.
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Updates REGIONAL TALK
IMF revises MENA growth sharply The IMF has updated its economic forecasts with a gloomier global outlook than the one it presented in April. Despite this, QNB Group notes that its outlook for the MENA region has improved sharply. The IMF now expects the MENA region to grow at a rate of 5.5% in 2012, en-par with the average for emerging economies. This is up 1.3% on its April forecast of just 4.3%, and by far the largest positive revision for any region or country. The IMF does not provide separate forecasts for most countries individually in quarterly updates to its World Economic Outlook. This makes it hard to see precisely which parts of the MENA region have driven the upwards revision. The IMF did, however, note that the boost was due in part to a rebound in economic activity in Libya and to generally higher oil production and domestic
demand across the region. In its April outlook, the IMF had forecast that Libya and Iraq would lead the region in 2012, achieving growth of 76% and 11% respectively. This is as a result of Libyan oil production returning to pre-war levels and Iraqi production rising as a result of investments by foreign oil companies. The IMF also forecasts strong growth of around 6% for most GCC countries. The regional average was dragged down by oil-importing countries, with growth rates forecast at around 2-3% for most countries, but with contraction in Yemen and Syria. The stronger regional outlook in its July update is particularly striking given further deterioration in Syria since April, which is also having a negative economic impact on its neighbours. The IMF sees a much improved outlook in North Africa and the Gulf
Real GDP growth forecasts for 2012 (%) 8.0 July-12 revision
6.1
April-12 forecast 5.5 1.3 3.5
2.5 2.4 0.4
2.0
1.0 0.4 -0.2
-0.7
-0.1
-0.6
-0.1
0.2 -0.6
China India MENAWorld Brazil Japan US Germany UK
Source: IMF and QNB Group analysis
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offsetting the problems in the Levant. According to QNB Group, expansionary spending plans in some countries’ budgets, including Qatar’s, have probably contributed to the IMF’s forecast of higher domestic demand. By contrast, the outlook for overall global GDP was revised downwards by 0.1% to 3.5% growth in 2012 and by 0.2% to 3.9% growth in 2013. Growth in the first quarter of the year was actually stronger than expected, partly because of the stabilising effect on financial markets of over € 1 trn in cheap financing provided to Eurozone banks by the European Central Bank. However, the stabilisation was short lived, and increased market stress. Additionally, a slew of poor economic data has led to the downwards revisions. The weaker outlook was pulled down particularly by India, which was revised down by 0.7%, and by Brazil and the UK, which were both revised down by 0.6%. Only a handful of countries saw upwards revision, notably Japan and Germany, both up by 0.4%. Aside from the forecast revisions to baseline scenarios, the IMF also sees an increase in downside risks. The most immediate of these risks would be a failure by policymakers to sufficiently protect banks in the Eurozone periphery, particularly Spain and Greece. The IMF urges the EU to move quickly towards a regional banking union to avert this risk. A second risk with global implications would be a failure by US politicians to negotiate a revision to automatic tax
rises and spending cuts that are due to come into effect in 2013. Bipartisan support for an amendment to fiscal legislation is needed to prevent some of these rises and cuts coming into effect. If this “fiscal cliff” is not averted, it could cut US GDP by up to 4% and plunge the world’s largest economy into recession. This would have serious global consequences, particularly given the weakness in Europe. However, it is widely expected that, given the seriousness of the problem, a political deal will be achieved to reduce the fiscal cliff, although probably not until the last minute. Irrespective of the two major developed country challenges, there are also risks that growth rates could decline further in emerging market. The IMF warns that the strong performance of emerging markets over the last decade may have created over-optimism about their ongoing growth trajectories. In particularly, the IMF notes a tail risk of a hard landing in China if investment spending, the major contributor to growth, were to slow sharply. If any of these risks were to materialise, then they could drag down growth rates in much of the MENA, particularly if they were to result in a sharp fall in oil prices. However, QNB Group notes that oil prices have remained buoyant even during recent periods of market fright in relation to Greece and Spain and, therefore, the downside risks in 2012 for the MENA region, and the GCC in particular, are not perceived as too serious.
UAE oil and gas companies eye up investment in Basra UAE exhibitors to take firm role at international event in Basra as opportunities in Iraq continue to increase
The UAE’s oil and gas industry is expected to make a major impact at the third annual Basra Oil & Gas International Conference and Exhibition officially supported by Ministry of Oil and organised by Expotim & Pyramids International. As the first largest international participating country, UAE oil and gas companies are expecting to capitalise on the opportunities being presented during the four-day event in December. Taking place from 6-9 December and officially supported by the Iraq ministry of Oil, UAE companies represent a significant portion of event participants, and this number has grown year-onyear since its inception in 2010. Last year saw a massive 93% increase in
UAE exhibitors, with no less than 70% anticipated for 2012. Event director, Mr. Çağatay Erşahin says this ongoing growth can be contributed to the strength of service offerings from UAE based companies, fulfilling much of Iraq’s requirements over the upcoming years. He said, “The UAE has established itself as a strong hub for oil and gas in this part of the world, and the level of services being provided by UAE exhibitors is some of the highest we see across the whole event. “Opportunities in Basra, and wider Iraq, continue to grow and will do for the foreseeable future. This event is a platform for companies to assess opportunities, and for the local market to understand what kind of technologies are available to them.”
UAE companies including Gulftainer, National Petroleum Services (NPS), NAFFCO, Solar Turbines, Eagle Burgmann, Middle East Tubular Services and Gastech are just a few of some 30 exhibitors looking to increase their presence in oil rich Iraq. And it is not only exhibitors that are making the most of the four-day event, as the UAE represents the second highest level of overall participation. Mr. Çağatay Erşahin added, “The recent increase of Emirates flights from Dubai to Basra, from four to seven per week, is just another indication that this market represents big business. Particularly within the technology and recruitment sectors, the UAE can provide Iraq with a number of high-level solutions as the market continues to open up.” Expected to attract more than 17,000 visitors, the four-day conference and exhibition will take place at Basra International Fair Ground for the third consecutive year. Submissions can be made by filling out the online form on the Basra Oil & Gas exhibition official Website: www.basraoilgas.com Bringing some of the most senior experts from across the international oil and gas industry, with many discussing their views on the latest market trends and technologies at the conference, themed ‘Iraq: The hub of future energy.’ The 3rd Basra Oil & Gas Conference will be managed by Mr. Falah Al-Khawaja, who is an independent Petroleum & Engineering Consultant. “The UAE have always made a substantial impact at the event and we expect nothing less this year,” said Erşahin emphasising once more the key role of UAE companies in Iraq oil & gas industry. AUG - SEPT 2012
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TRADE TALK Interview
In the business of being bold! With the financial crisis and global uncertainties, it takes a strong and focused leader to steer a company through the turmoil. Aparna Shivpuri Arya, caught up with one such inspiring personality, Ali Rashid Lootah, Chairman, Nakheel, to find out how he revamped the organisation and why this is the right time to invest in Dubai. 10
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r. Lootah was appointed to lead Nakheel after the economic crisis had caused financial problems. He managed Nakheel during challenging times, as the organisation underwent financial restructuring of its debts. Talking about his background, Mr. Lootah elaborated that he studied civil engineering and worked for the Ministry of Public Works for 22 years. He then left the government to handle his own business for six years after which he was called to come back and help Nakheel. When I asked him about his strategy for turning around Nakheel, in a short span of two years, he highlighted the importance of having a firm grasp on all issues. “Our strategy was to make sure that we were at the top of all issues and were aware of all the details. Based on that we developed a restructuring plan and we concentrated on meeting our commitments to our investors – to deliver and also to meet our commitment to lenders and creditors. And I think now the confidence in Nakheel is there and the company is making profit.” After 18 months of negotiations, Nakheel marked the last of the debt restructuring
10% interest. People were not sure - at 65 it wasn’t worth much and now they can sell it at 100 and they also receive 10% dividend. This is a sign of confidence – how the market reacts to a company.” Continuing about the restructuring process, Mr. Lootah said that for him the priority was to deliver the commitment and now everything is going on smoothly. “Our creditors were patient with us and now we have met their expectations. The most important thing is that the government committed to help us and everything is on track now,” he added. So what’s the mantra for his success? “Patience is always important – all of us have to be patient and give the other party a chance. Also, it is important to track competitors and seek new investment opportunities.” Elaborating about the future plans for Nakheel, Mr. Lootah is very upbeat about Phase 2 of the Dragon Mart. Following successful negotiation with business partners, contracts worth AED 600 million are being awarded for the construction of the extension, which is set to more than double the size of the existing Dragon Mart complex.
Elaborating about the future plans for Nakheel, Mr. Lootah is very upbeat about the phase 2 of the Dragon Mart. Following successful negotiation with business partners, contracts worth AED 600 million are being awarded for the construction of the extension, which is set to more than double the size of the existing Dragon Mart complex.
plans when the company announced an AED 4.8 billion sukuk to its trade creditors to be listed on Nasdaq Dubai. “The asking price for our sukuk now is 100 and when it was launched it was 65 – so in less than a year its back to its nominal price. We gave our creditors and offer - we restructured their deal - 60% sukuk and 40% cash and the sukuk has more than
Construction is expected to start shortly upon obtaining the necessary regulatory approvals. The completion of Phase 2 extension, in Q3 2013, will bring the total size of Dragon Mart to 335,000 sqm – equivalent to 47 international football pitches. Dragon Mart 2, where 80% of the available leasing space is already pre-let, will AUG - SEPT 2012
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TRADE TALK Interview
be constructed by selected business partners – New Mall Limited – through a Build, Operate and Transfer (BOT) mechanism. The project will be managed by Nakheel until the transfer date. Dragon Mart Phase 2 is one of a number of projects in Nakheel’s retail expansion pipeline. In April 2012, the company announced an AED 25 million contract with
might be going through a tough phase, Mr. Lootah again emphasised on the importance of being patient. “First be patient and second, remember that, the devil is in the details. The management should really get into the details because if you do not know the details then you cannot know the extent of the damage and that’s what we did at Nakheel – even the top management, upto the board
Be patient, track your competitors and seek new investment opportunities.
RSP for the design of The Palm Mall on Palm Jumeirah, a 160,000 sqm retail complex set to open in 2014. Work is also due to begin on The Pointe at Palm Jumeirah – a 136,000 sqm restaurant, retail and entertainment hub opposite Atlantis The Palm – towards the end of 2012. “We plan to double our retail by 2014 and, therefore, a lot of emphasis is being given to such projects,” added Mr. Lootah. And when I asked him about what advice would he give to other companies, which 12
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level, went into the details so that we have the right solutions. We cannot rely on what people tell us.” Following up this sound advice, I was quick to ask him about his take on the economy of Dubai. “The real estate sector is picking up and recovering, but it’s all about location location location! When the prices of the good locations start moving, then that’s the sign of recovery. So, I see a movement in Dubai. One of the new projects to capture investor interest is the Palma Residences,
the first residential project to be launched on the famous Palm Jumeirah since the market crashed four years ago.” Due to be completed in fourteen months, Mr. Lootah claims the project sold out 30% of its units — which are priced at between AED 6 mn to AED 8 mn each - within a week of being launched. “It is the right time to enter the Dubai real estate market and buy property as the prices will go up again. Dubai has it all – the infrastructure, the quality of services - it’s only a matter of time. So it is the right time to invest. The price of real estate is slightly higher that the pre-crisis prices for villas. A lot of people moved here and wanted luxury villas, so they invested here. Dubai has the infrastructure and maybe the Arab Spring could have expedited the movement of money to Dubai, but it was going to happen anyways,” stressed Mr. Lootah. Besides real estate, tourism is another sector that Mr. Lootah is bullish about. And with these two sectors doing well, it is only a matter of time that other sectors, such as the service industry will follow. We finished our conversation on that note of optimism and I sure felt that he was the man with the golden touch!
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TRADE TALK Legal
Where’s the money? Dishonoured cheques are a recurring problem and have been on the rise since the onset of the financial crisis. As a result, there has been a sharp increase in criminal cases and complaints filed with the UAE courts and the courts’ caseload has substantially increased. Hassan Arab, Regional Head of Litigation, Al Tamimi & Co, explores the recommendations that aim to eliminate some perceived discrepancies in the law and contradictions among rulings. 14
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urveys have been carried out across various strata of society to evaluate the prevalence and spread of this problem. Many have argued it is time that the laws penalising the issuance of dishonoured cheques were revised on the basis that economic hardship should be considered an exceptional circumstance necessitating a review of the penalty imposed on the issuer of a dishonoured cheque. Others, however, argue that the penalty for issuing a dishonoured cheque should be completely abolished and the dishonoured cheque offence should be excluded from the realm of criminal prosecution. This argument is on the basis that these transactions should be seen as commercial transactions that are subject to the rules of civil prosecution in view of the fact that the courts consider a cheque as commercial paper and look at the nature and elements of a cheque on this basis.
The criminal courts
From a criminal court’s perspective, the word ‘security’ on a cheque does not alter its nature as long as it satisfies the formal requirements set out in the law. Article 596 of Law No. 18 of 1993 (Commercial Transactions Law) sets out the mandatory particulars that must be stated on a cheque i.e. an unconditional order to pay a specific sum of money. A security cheque, on the other hand, normally makes payment subject to the fulfillment of a condition. There is a clear difference, then, in the meaning the criminal court attaches to cheques compared to the civil court. It is argued that the law should be amended to abolish the penalty for dishonoured cheques as some believe a criminal penalty for a dishonoured cheque is not the right solution to the problem as it does not enable the beneficiary to recover the value of the cheque. The courts in the UAE have established that a cheque is a commercial paper containing an order by the drawer to his bank to pay the beneficiary a specific sum of money on a specific date. A cheque
ABOUT
Hassan Arab is a leading expert in all aspects of litigation and dispute resolution, with particular expertise in cases relating to banking and intellectual property rights. As Partner and Head of Litigation for the region at Al Tamimi & Company, Hassan has spent his career building one of the strongest litigation teams in the Middle East which Legal 500 has recognised as “having a great reputation for local court work with a number of really good practitioners”.
functions much like cash and is a payment instrument. Issuing a cheque with insufficient funds is an offence when the drawer knowingly issues the cheque to the beneficiary (without having sufficient funds in the account) on the due date. The drawer’s bad faith is established when he knows that there are insufficient funds to cover the cheque. The Supreme Court has held in previous rulings that the offence of issuing a bounced cheque occurs when
the issuer of the cheque to immediately settle with the beneficiary. Given the nature of the criminal penalties such as restricting the cheque issuer’s freedom of movement either with confinement during investigations or withholding his passport as a guarantee in connection with the criminal proceedings involving the bounced cheque creates a big incentive for the issuer to settle with the beneficiary.
The courts in the UAE have established that a cheque is a commercial paper containing an order by the drawer to his bank to pay the beneficiary a specific sum of money on a specific date. A cheque functions much like cash and is a payment instrument.
a cheque is written with knowledge that there are insufficient funds to cover it and liability cannot be avoided by claiming that the cheque is a security instrument and that the beneficiary of the cheque was aware of the fact that there were insufficient funds. It is worth noting that the issuance of a cheque (without sufficient funds) in bad faith is a punishable offence in other jurisdictions as well as the UAE law. As a result, reasons for and against abolishing the law for a bounced cheque are considered in this article. Nevertheless, the criminal penalty for issuing a cheque that is returned unpaid is an ideal way of pressurising
It is important to note that the UAE legislator has revised Article 401 of the UAE Penal Code dealing with the issuance of Cheques in bad faith under Law No. 34 of 2005, by adding a clause that stipulates: “The criminal case shall terminate if payment is made or assignment is established after commission of the offence and before a final ruling is made in respect thereof. If this occurs after the ruling became final, its enforcement will be seized.” This article encourages the writer of cheque to settle the matter with the beneficiary in order to avail of this provision. AUG - SEPT 2012
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TRADE TALK Legal
Special committees From a legislative perspective, the UAE recognises the state of the economy, the impact the law often has on the state of the economy and the position of investors, especially in times of economic downturn. The law strives to adapt to economic needs and benefit the economy. A good example is the set up of a special judicial committee to settle cheque disputes in property transactions by HH Sheikh Mohammed bin Rashid Al Maktoum, Ruler of Dubai by Decree No. 56 of 2009. His Highness realised the economic conditions affecting the property sector at the time and instructed
2) Consider the circumstances in which a cheque was issued. For example, when entering Construction Agreements (Muqawala), it is common practice for a contractor to issue a security cheque for 10% of the contract price in favour of the employer (owner), this is commonly known as a ‘performance bond,’ i.e. a guarantee for the contractor’s proper and efficient performance of the contract. The cheque (or, alternatively, a bank guarantee) would become payable only upon realisation of that condition. In practice, however, some owners tend to exploit this right in order to avoid paying the balance owed to the contractor by
In view of the fact that dishonoured cheques are considered a form of fraud, it is noted that banks, in their relationships with borrowers, often require borrowers to sign blank cheques as security in the event of breach of the loan contract and failure to repay the loan according to the agreed repayment schedule.
that a special judicial committee be formed to settle cheque disputes for the sort of transactions enumerated in the Decree of which Article 5 states that “(a) The Judicial Control Authorities, including Police Stations, shall refer all cheque complaints to the Committee. (b) The Public Prosecution and Courts are not allowed to investigate the bounced cheques included in this Decree, and should suspend the hearing of any complaint or criminal case related to these cheques and refer the same to the Committee” As for the implementation and enforcement of the law, it is advisable that courts take account of several key points when determining cases related to bounced cheques, such as:
1) Investigating the circumstances surrounding the bounced cheque to determine whether there was any bad faith on the part of the cheque issuer (criminal intent). 16
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knowingly cashing a security cheque for payment when payment is not due to them. Due to insufficient funds, they then resort to criminal action in order to further pressurize the contractor into waiving or negotiating their dues. The criminal court should therefore examine the merits to determine the reason for writing the cheque rather than convict the drawer simply because the cheque bounced. The criminal court should preferably refer such cases to the competent civil court for further investigation. If bad faith is established on the part of the perpetrator, the case will be returned to the criminal court in order to decide the penalty. In short, the criminal judge should investigate the reason for writing the cheque particularly if the relationship arises from a contract or agreement. Where it is established that the issuer of the cheque had acted in bad faith or defrauded the
victim, the court would sentence the perpetrator. It is essential to note an important legal principle that was articulated in a Federal Supreme Court case on 22.10.01 in Appeal No. 54-23, which states that “Dishonoured cheques are classified as an offence against property under Chapter 2 (Fraud), the law considers such offence to be a form of fraud and any intention to exclude bad cheque offences should have been made explicit in the law. So, while the Law does make separate provision for bad cheques, the offence still falls under Chapter 2 (Fraud).” 3) In view of the fact that dishonoured cheques are considered a form of fraud, it is noted that banks, in their relationships with borrowers, often require borrowers to sign blank cheques as security in the event of breach of the loan contract and failure to repay the loan according to the agreed repayment schedule. In fact, upon default by the client (borrower) on the loan, the creditor bank would present the cheque, (parts of which would be completed by the creditor bank) to the relevant authorities for the borrower to be prosecuted. He is then sentenced without investigation, taking into account the fact that the bank was aware, at the material time, that the drawer did not have sufficient funds to cover the cheque. Indeed, how can fraud be established in such case if a customer issues a cheque knowing there are insufficient funds in his account? The courts must therefore take this practice into account.
Summary
To summarise, it is not recommended that criminal legislation with respect to the penalty for dishonoured cheques is repealed. Introducing amendments to the current law is favoured. Further, it is also recommended that the UAE courts, especially the criminal courts, investigate disputes relating to dishonoured cheques first in order to establish an offence before issuing a ruling.
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TRADE TALK Free zones
The gateway to efficient business Established in 1996 as part of Dubai Government’s strategic plan to move the emirate towards an investment driven economy, Dubai Airport Freezone (DAFZA) has grown to become the region’s fastest growing free zone. Aparna Shivpuri Arya caught up with Jamal Bin Marghoob, Acting Director, Marketing & Corporate Communications Department, DAFZA, to get the details about what the free zone has to offer.
P
lease give us a brief background about the setup of DAFZA.
The free zone is currently home to over 1,600 companies from various industry sectors, including aviation, freight and logistics, IT and telecommunications, pharmaceuticals, engineering, food and beverage, jewelry and cosmetics. Located strategically within the boundaries of Dubai International Airport, DAFZA offers a range of modern facilities with a state-of-the-art infrastructure. International investors can enjoy dynamic growth through DAFZA’s excellent incentive packages including 100% tax exemption, 100% foreign ownership and no currency restrictions. Situated at the crossroads of Europe, Asia and Africa, 18
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DAFZA is a gateway providing access to over 2.5 billion consumers. Our vision is to be the region’s ultimate free zone destination. We aim to add value to UAE economy by providing integrated business solutions, to attract regional and international investors looking for a unique business platform through service excellence in a customer centric business environment.
How important do you think trade is for Dubai? How much does it contribute to the GDP?
Dubai witnessed great economic expansion in 2010 and 2011, with improvement across all business sectors. Foreign trade is a key sector in Dubai’s economy, contributing both directly and indirectly to the emirate’s GDP.
In addition to good performance in logistics and tourism sectors, trade should help Dubai record steady growth in 2012. Whilst Dubai’s construction sector contracted significantly in 2009 a modest recovery was evidenced over 2010 and 2011 with sound growth in the trade and logistics sector reflecting strong exports in 2010 and 2011 (direct exports and re-exports) have represented more than 50% of GDP in recent years. Dubai is a dynamic cosmopolitan city with excellent infrastructure and an open economy that now increasingly is looking to West Asia for economic growth and playing an important role as a financial center in the Gulf area and economy with significant re-export related activities.
Who are the main trading partners of Dubai and in which products?
The largest percentage of imports as of Q2 of 2012 comes from Eastern Asia, particularly India, which came in the first place, as the volume of imports from there amounted to 17.1%, followed by China at 10.3%, the US came third at 8.5 %. India came first as UAE’s trading partner for non-oil exports as the volume rose by 33.7%, Switzerland came second with a rise of 16.2 %while exports to KSA came third by a 4.5% rise. The growth in UAE’s foreign trade is attributed to the growth of national manufacturing industries such as steel and aluminum as well as commercial services, particularly in Dubai. Europe has been a significant source some 45% of foreign direct
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TRADE TALK Free zones
investment into Dubai over the last few years followed closely by Asia. Dubai has a diversified economy as it has managed to decrease its dependency on oil over the years. Dubai’s oil-related GDP went from 50% at the establishment of the UAE to 2% in 2008. Capitalising on its strategic geographic location, the wholesale and retail trade and repairing sector is the principal contributor to nominal GDP, accounting for 39% of Dubai’s nominal GDP in 2008. Trade, tourism, real estate and construction are key drivers for growth in the coming years
Imports by product (Q2 2011); Total: AED 101.9 bn
What type of companies can set up business in DAFZA?
• Pearls, precious stones and metals constitute 37% • Machinery, TV and electrical equipment constitute 17% • Vehicles, aircrafts and vessels constitute 8% • Base metals and articles of base metals constitute 7% • Products of chemical and allied industries constitute 6% • Others 25%
Three different types of companies can be set up at our premises. Each offers different options and benefits matching your specific business requirements. You can choose either a 1. Free Zone Establishment (FZE): Formed with one shareholder, either individual (a person) or non-individual (a company). A minimum share capital of AED 1 million (USD 272,500) is required. 2. Free Zone Company (FZCO): Formed by a minimum of two and maximum of five shareholders. The shareholders can be individuals (persons) of non-individual (companies) or a combination of both. A minimum share capital of AED 500,000 (USD 136,000) is required. 3. Branch Office of an existing company. A foreign company can set up a branch of its existing company in DAFZA. No share capital is required.
Exports by product (Q2 2011) ; Total AED 23.1 bn
• Pearls, precious stones and metals constitute 65% • Base metals and articles of base metals constitute 8% • Prepared foodstuff, beverages & tobacco constitute 6% • Plastics, rubber & articles thereof constitute 5% • Mineral products constitute 4% • Others 12%
What services does DAFZA provide to businesses?
The growth in UAE’s foreign trade is attributed to the growth of national manufacturing industries such as steel and aluminum as well as commercial services, particularly in Dubai. Europe has been a significant source some 45% of foreign direct investment into Dubai over the last few years followed closely by Asia.
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We provide a wide range of services to businesses which include:
Leasing-Property options: Offices for rent: You have a choice of premium, offices for rent in Dubai your operation from. Located in our state- of-theart Business Park, DAFZA offers a wide range of high quality, free-sized offices, available for rent on an annual basis. Light industrial Units: High quality, thermally insulated, purpose-built units are available to rent on an annual basis. Tenants are allowed to choose between using their LIU as either, a warehouse for storage and distribution, or as a factory for assembly and light production. Land Plots: If you wish to construct your own warehouse or factory, DAFZA offers plots of land on lease, in varying sizes. Up to 60% of the allotted land can be utilized for construction. Licensing: Trade License: import, export, distribution, storage of specific products Service License: requires consultation with a sales executive Industrial License: light manufacturing, processing, assembling and packaging
Additional set-up support: Staff Sponsorship DAFZA will support the investors to process all visas, residence permits, health cards, medical reports and so forth, for the company staff. We will also renew the health card every three years.
Family Sponsorship DAFZA will help company directors and managers to obtain visas for their families and dependents. Support Documentation If required, DAFZA will issue all relevant documentation for opening of bank accounts, vehicle registration, driving licenses etc. We also provide additional operational support through 24-hour security, IT & Telecommunications, governments services (e.g. customs service and rapid cargo clearance through a dedicated logistics center), and Tas’heel (E-services, online services, for instance: renewal of visa applications residence, license, health and ID cards.)
What is DAFZA’s USP? How is DAFZA different from other free zones? Are there any special benefits of setting up business in DAFZA? DAFZA has a strategic location which is its USP since it is located in the middle of the Emirate of Dubai and near Dubai’s Airport. We focus for the future is to continue to grow, answer its customers’ needs and to function as a world class business getaway for organisations. The mentioned factors collectively make us different from other free zones and resulted in DAFZA being ranked as the Top Free Zone Globally by the Financial Times’ FDI magazine. In addition to the above mentioned services, DAFZA offers many exceptional benefits of setting up a business. It provides miscellaneous services such as registration with Dubai Chamber, registration of company name with Economic Department and other legal documentations.
What processes are required for foreign companies to set shop in DAFZA and to trade? How do you facilitate the process?
We all know that setting up a new business is very challenging. That is why everyone at DAFZA aims to make the process of application, registering and licensing as easy as possible. This won’t take longer than four weeks, provided all legal documents and
Jamal Bin Marghoob, Acting Director, Marketing & Corporate Communications Department, DAFZA
issuing FTZ operating licenses and assisting companies with establishing their business in the FTZ. Investors can either register a new company in the form of a Free Zone Establishment (FZE) or simply establish a branch or representative office of their existing or parent company based within the UAE or abroad. An FZE is a limited liability company governed by the rules and regulations of the Free Zone in which it is established. Establishing a business entity in one of the UAE’s many Free Trade Zones (FTZs) can be an attractive option for foreign investors. To date the free zones have been successful in attracting a large number of companies
DAFZA has a strategic location which is its USP since it is located in the middle of the emirate of Dubai and near Dubai’s Airport. We focus for the future is to continue to grow, answer its customers’ needs and to function as a world class business getaway for organisations.
bank account are complete. Complete the online application to DAFZA. There are a few documents that need to be submitted to the Sales Department which will be reviewed by our committee for initial acceptance. After obtaining initial approval, which will take approximately 7 to 10 working days, allocation of the facilities will be given, followed by the invoice and lease agreement. After making the payment, you have to go to the Lease and Licensing Department to submit the legal documents and the Interior Design Department for layout and interior design of your office Once all legal documents are submitted and payment completed, the license will be issued.
What rules and regulations govern DAFZA?
An independent Free Zone Authority (FZA) governs DAFZA and every other free zone in the UAE and the agency is responsible for
and foreign direct investment, as well as expanding net non-oil exports. The major advantage in setting up in any free zone in the UAE is that you are entitled to: 100% foreign ownership of the enterprise 100% import and export tax exemptions 100% repatriation of capital and profits No corporate taxes for 15 years, renewable for an additional 15 years No personal income taxes Assistance with labour recruitment and additional support services, such as sponsorship and housing.
What are the future projects and expansion plans of DAFZA?
In its quest for excellence, DAFZA plans on creating more value opportunities for its partners by: • Expanding space (new W7 building – 32,000 sqm) • Enhancing services (new food court area) • Improving the customer experience AUG - SEPT 2012
21
TRADE TALK Opportunities
The road to opportunity For foreign investors who have got the GCC in their business development plans, the UAE and Qatar are among the hottest growth destinations, particularly in the retail, food, healthcare, education and hospitality sectors. John Martin St. Valery, Founder and CEO, The Links Group of Companies, talks to us about the prospects that await us.
T
he GCC is one of the most promising regions for foreign investors from every corner of the globe. According to Alpen Capital, the GCC countries’ GDP is expected to reach USD 1.8 trillion by 2015, by which time the region’s per capita income is expected to increase 3% (CAGR) to USD 38,150. According to the International Monetary Fund (IMF), the UAE’s GDP will climb to its highest level of around USD 385 billion in current prices in 2012 to maintain its position as the largest Arab 22
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economy after Saudi Arabia. The UAE’s imports are expected to reach USD 253.7 billion by 2015 with onshore businesses accounting for two thirds of total import volume and free zones representing the remaining third. With the third-largest proven reserves of gas in the world and as the world’s largest producer of liquefied natural gas, Qatar is one of the most prosperous countries in the world and has the fastest growing economy in the GCC. As it gears up to host the 2022 FIFA World Cup,
the country is expected to wintness a dramatic growth in all sectors.
Taking a slice of the retail pie The retail industry has been one of the fastest growing sectors in the UAE and Qatar over recent years and is continuing an upward trend. Fundamental drivers of this growth include rising affluence and disposable incomes, an increase in tourism, the large expatriate populations and largescale infrastructure development. Over the years the retail landscapes in the UAE and
Qatar have transformed from traditional markets and small, independent outlets to large shopping malls, hypermarkets, and organised retail chains. The UAE has the most developed retail market in the GCC region with a landscape largely dominated by luxurious shopping malls. The country has firmly established itself as the go-to market for both high-end and mid-market global retailers and has managed to improve its ranking in AT Kearney’s 2012 Global Retail Development Index (GRDI) standing at seventh position on the benchmarking study. According to the AT Kearney report, overall retail sales in the UAE increased by more than 5% last year as consumer confidence rose, despite the political events surrounding the Arab Spring and the economic slowdown in the Euro Zone, both taking their toll on regional tourism. Currently, Dubai Mall is the world’s most-visited shopping and leisure destination with over 54 million visitors (up 15% from 2010) and a 35% increase in average sales. Plans are now underway for a one-million square foot expansion to satisfy the growing demand among
ABOUT
Having founded The Links Group, the company formation specialists in 2002, John has spearheaded the growth of a Partnership into the corporate structure that now exists. More than thirteen years living and working in the UAE and Qatar has given John a unique and unrivalled insight into the commercial opportunities in this rapidly developing region. Previous senior management roles with Citibank and Kodak were preceded by an eight year period with the Metropolitan Police in London. Today John advises many group companies at board level, particularly in the areas of entrepreneurship, corporate governance and business development.
Qatar, the richest country in the world in terms of per capita GDP, is currently witnessing a retail boom with the entry of several international retailers. Alpen Capital predicts retail space in Qatar will double over the next few years with an area of 0.6 million square meters already under planning and development. With demand for luxury and discretionary goods in the UAE and Qatar forecast to grow at an even faster pace in the coming years, the development of these countries’ retail sectors shows no signs of abating. When you add to this picture the increasing popularity
The UAE’s imports are expected to reach USD 253.7 billion by 2015 with onshore businesses accounting for two thirds of total import volume and free zones representing the remaining third.
international retailers and consumers for more outlets. Similarly, Mall of the Emirates, the country’s second largest mall, had its best performance in 2011 since its founding in 1992. In addition, Dubai now shares with London the top position as the most targeted retail destination in the world, drawing 56% of all international retail brands. According to CBRE Group, the UAE has the second highest presence of international retailers in the GCC, after Saudi Arabia.
of, what remains, a nascent online retail segment, the investment potential in this sector is particularly attractive.
Food imports
Due to water shortage and a lack of arable land in the UAE and Qatar, these countries need to import almost 90% of their food requirements. Their dependence on food imports is expected to increase rapidly due to population growth, increased per capita income and a resulting increase in per capita consumption.
According to the Economist Intelligence Unit (EIU), the UAE’s food imports are expected to reach USD 5.5 billion in 2015, up from USD 3.6 billion in 2010. Qatar’s food imports are also expected to increase, reaching USD 2.1 billion in 2015, up from USD 1.3 billion in 2010. In the UAE, the population is expected to grow to 6 million by 2015, up from 5.2 million in 2011. Analysts predict food consumption will grow at a rate 5.4% during 2011 to 2015 with meat and fruit segments likely to register the highest growth. Over in the peninsula state of Qatar the population is expected to grow to 2.1 million by 2015, up from 1.8 million in 2011. Although this is a slower growth rate than the UAE, its growth in food consumption is expected to be among the highest of the GCC countries, increasing by 6.3% during 2011 to 2015. According to analysts, milk and milk products may overtake cereals to become the leading food segment in the country. Meat, fruits and vegetables are also expected to record a strong growth. Social trends are also expected to influence food imports in the coming years. As public awareness about healthier eating habits increases, demand for more healthful food products will follow. Television and the internet are also providing greater exposure to the western world and this is contributing to consumers demanding more packaged and convenient food items. In addition, as the populations of these AUG - SEPT 2012
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TRADE TALK Opportunities
countries increase, so too does the Muslim demographic, necessitating an increase in Halal-certified food imports.
Foreign investors wanting to tap this segment would do well to think about how to train local talent.
The UAE is one of the most organised and fastest growing healthcare markets in GCC. It is a medical-tourism hub for the region, attracting patients from all over the Middle East. According to Alpen Capital, the UAE’s healthcare market is expected to expand
As the UAE and Qatar continue to diversify their economies away from dependence on oil and gas, investments in education projects are expected to increase. Both countries recognise robust education
Healthcare – a national priority
Education – the foundation of knowledge economies
In the UAE, the expatriate population – which accounts for more than 88% of the country’s overall population - is expected to be the main driver of growth in the education sector. According to Alpen Capital, the number of students is expected to reach 1,108,103 students in 2015, up from an estimated 958,233 students in 2011.
at a CAGR of 12.1% to USD 8.0 billion by 2015, up from an estimated USD 5.1 billion in 2011. The outpatient market is likely to be worth USD 6.0 billion and inpatient market USD 2.0 billion. In Qatar, healthcare services have improved significantly in recent years. In fact, the country has the highest per capita healthcare spending among GCC nations. Its healthcare market is expected to expand at a CAGR of 8.4% to USD 3.2 billion by 2015, up from an estimated USD 2.4 billion in 2011. The outpatient market is estimated to be worth USD 2.4 billion, while the inpatient market will contribute the rest. Both the UAE and Qatar are focused on improving healthcare standards by increasing investment in healthcare technology and introducing measures to promote a healthy way of life. While primary healthcare projects comprise the bulk of government spending, attention is turning towards preventive tertiary services. In line with the economic visions of the UAE and Qatar, both countries are seeking to develop their healthcare workforces. 24
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infrastructure is the foundation of any knowledge economy and have made education a national priority in their respective national strategies. Population growth, rising private sector participation, and the increased willingness of parents to ensure highquality education for their children are other factors that will no doubt boost demand for education services in the UAE and Qatar. In the UAE, the expatriate population – which accounts for more than 88% of the country’s overall population - is expected to be the main driver of growth in the education sector. According to Alpen Capital, the number of students is expected to reach 1,108,103 students in 2015, up from an estimated 958,233 students in 2011. With Qatar gearing up to build the USD 60 billion worth of infrastructure projects it committed to in its FIFA World Cup bid documents, the country recognises the importance of bringing in external expertise to achieve its many goals. Therefore, the education sector is expected to grow significantly in the coming years as the country invests in
infrastructure to support its burgeoning expatriate worker population. Alpen Captial predicts the number of students will reach 245,391 students in 2015, up from an estimated 204,701 students in 2011. In response to the demand for better quality of education, private schools are expected to increase rapidly over the next few years. This is being driven not only by expatriate demand, but also by the national populations who are shifting from public schools to private schools.
UAE and Qatar vie for the tourist market
The hospitality sectors in the UAE and Qatar are growing significantly as these countries strengthen their reputations as the safe havens for business and leisure in the region. According to the World Travel & Tourism Council (WTTC), the number of tourists to the UAE is expected to reach 12,206 million by 2015 and the sector will represent 6.5% of total GDP – that’s an expected USD 53.14 billion. Qatar is likely to see the largest growth (up 69.9%) if all 7,340 rooms in the country’s total active pipeline open. The gas rich Gulf state is building 77 new hotels and 42 hotel apartments ahead of the FIFA World Cup in 2022, in a bid to accommodate a flurry of tourists and football fans. Qatar’s leisure market is in a more embryonic stage of development when compared to the UAE. But given it faces an immovable ten year deadline to get ready for the World Cup, it is one of the more promising markets in the GCC for contractors, hotel operators and hospitality service providers. The UAE and Qatar remain among some of the fastest growing economies in the world, albeit at different stages of maturity. They also offer two of the most probusiness environments in the GCC. Foreign investors that position themselves correctly via the correct means of legal incorporation will be well placed to capitalise on these lucrative opportunities.
TRADE TALK How to
The leapfrog to innovation The current millennium is characterised by a strong level of globalisation supported by technological progress as well as transfer of knowledge. The question is how can a small and medium sized enterprise (SME) be able to capitalise on these global trends and opportunities for new markets? Dr. Ashraf Mahate, Head, Export Market and Intelligence, Dubai Exports and Vice Chair, Economic Policy Committee, Dubai Economic Department, explains how SMEs can innovate to stay in the race.
C
ountries are constantly negotiating new trade agreements to create a global market for their producers free of tariffs and other trade impediments. At the same time these new opportunities call for product and process development. In the global marketplace competition has moved away from price competiveness to product or service quality, knowledge and innovation. In other words, consumers are willing to pay a premium for a quality product rather than to endure a lower priced product that does not adequately meet their needs. In the modern ‘wired world’ where information is readily available and easily accessible producers need to understand the market. In doing so, they need to analyse their competitors both large and small while listening to needs and concerns of their target consumers. SMEs need to ensure what they are providing to consumers is relevant and enticing. Of course, an excellent marketing and advertising plan can go a long way towards making a product or service enticing but at the end of the day, conversion will be limited as consumers realise the benefits 26
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of consumption. Therefore, real change can only be carried out in two ways namely imitation or innovation. The former is to take the best from the market that is tried and tested while the latter seeks to come up something new and original. There is a third option of doing nothing and keeping the status quo but this is not feasible as the competition will take over the market. Imitation does not simply imply ‘cut and paste’ of the best product or service available as this has legal implications. At a practical level what may work in one cultural environment may not translate well into another and hence the SME will need to take the best offerings and fit them with the local customer mix. If carried out correctly imitation is relatively cheap and easy method as it requires the implementation of a tried and tested product. However, the downside is that the market risks are much higher because as an imitator the company will not be a market leader but a follower. This may be taken negatively by the consumer and the conversion from an existing product to the imitation may not take place. There are many examples of this and
the best is perhaps the case of the Apple Ipod and the Microsoft Zune. Technically both are very similar however since its launch Apple has sold over 300 million units of its Ipod compared to the Microsoft with global sales of approximately three million units of Zune before it was discontinued. The evidence shows that technical competence did not matter to the consumer and conversion to the imitation product did not take place as Apple controls over 60% of the market. The success of Apple was clearly due to its innovation but this requires far more effort than imitation. Innovation is also far more risky as the product may not take off and the company will have invested huge sums of money. In consumer behavior theory we also include ‘cheaper’ although this need always be relevant as consumers may actually pay a premium to have better lifestyle. In fact, the successful examples of product innovation in recent years have shown that cheaper is not really relevant and in the modern age consumers are more focused on quality. The success of Apple in another area of electronics namely SmartPhones illustrates
that the pace of innovation has meant that product lifecycles have shortened considerably. More importantly companies need to constantly innovate in order to maintain their competitive advantage. The core of these strategies is knowledge – only when an organisation accumulates, learns and utilises knowledge can it truly carry out constant innovation.
SMEs and innovation Going back to the initial question in the opening paragraph of this article SMEs can capitalise on global trends and opportunities through innovation. However, SMEs unlike larger firms need innovation more as they cannot depend on the brand image or market positing of their products. If anything SMEs need to innovate in order to survive. Although SMEs have certain advantages such as the close relationship to the owner who can drive ownership or the flat organisational structure which implies that new ideas can be implemented quickly they nevertheless also have various obstacles to innovation. Perhaps the most important is a distinct lack of funding or even access to external financing. SMEs by their very nature are blocked from various sources of finance that large firms can tap into such as bonds, issue of shares etc. Second, SMEs tend to lack the ability to attract talented staff capable of product and process innovation. Also, larger firms are better able to reward these staff and tend to find it much easier to recruit them. Third, SMEs often lack the information or awareness of technological progress. Larger companies tend to be more networked with universities through joint research or are suppliers/customers to other large firms and hence become aware of changes in the industry faster than SMEs. Fourth, for SMEs the protection of intellectual property tends to be more difficult as well as costly. Finally, the very nature of an SME implies that it is risk averse and less likely to innovation risk. Also, the size of investment required implies that to make a decent return on innovation the SME needs to sell a sufficiently large quantity of the product. In many cases it may not be feasible for the SME to sell such a large quantity.
ABOUT
Dr. Ashraf Mahate is the Head of Export Market Intelligence at Dubai Exports, which is an agency of the Dubai Economic Department. Dr. Mahate is also the Vice Chair of the Economic Policy Committee with the Dubai Economic Department. Dr. Mahate received his doctorate from Cass City University Business School in London (UK). He read Economics at University College London, followed by a Masters in International Economics and Banking at the University of Wales in Cardiff. Dr. Mahate is a professional educator and received his training at the Institute of Education (University of London). He is a member of the Chartered Institute of Managers (UK) and a Member of the Institute of Commercial Management (UK). He is also a member of the Association of Certified Anti-Money Laundering Specialists (ACAMS). He can be reached at ashraf.mahate@dedc.gov.ae. For more information on Dubai Exports, please visit: www.dedc.gov.ae.
How to innovate Despite the challenges SMEs can still make the jump to innovation through different techniques. First, all SMEs tend to have staff with experience and knowledge the issue is how to capitalize on this so that they can come together to lead to innovation. One of the ways staff knowledge can be utilised is to develop an innovation-friendly corporate culture where knowledge and experience is shared. Second, a single SME may not be able to carry out substantial research and development. However, if a SME joins forces with another SME the level of resources available suddenly
with equipment or even professorial endowments there is no reason as to why SMEs cannot conduct joint research. Of course the research projects which are available to SMEs may not be large it does how allow it to become aware of changes in technology as well as the ability to benefit from smaller research projects. The path to innovation is not an easy one for SMEs and there are many hurdles along the way. However, these hurdles need not be barriers and SMEs can overcome them with a little thought and planning. What is obvious is that if the SME firm intends on being a global
The core of these strategies is knowledge – only when an organisation accumulates, learns and utilises knowledge can it truly carry out constant innovation. doubles and the risk is halved. Similarly, if more partners are included the required resources and risks fall correspondingly. Third, SMEs can form a stronger and closer relationship with larger firms. The real advantage of this method is that the larger firm identifies the winning innovation and thereby allows the SME to share in the gains hence reducing the risk of the latter. Fourth, the SME can develop links with research based universities. Although traditionally these links have been established by larger firms who are able to supply the university
player or even a regional exporter it needs to be innovative. Being simply an imitator is not a solution and as the case of Apple Ipod and Microsoft Zune illustrates not necessarily a successful strategy. More importantly, in the modern business environment despite how good a SME’s product is in today’s market the short product cycles will need that it needs to come up with the next innovation to be ahead of the competitors. The only strategy for an SME is to harness knowledge and understand its customers so as to deliver the next innovation which meets their needs. AUG - SEPT 2012
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TRADE TALK Logistics
Outsource to the expert Freight and storage are very important components of trade. RSA Logistics DWC LLC, is a 3PL company, which specialises in contract logistics, warehousing, freight forwarding, transportation and distribution, among other things. Aparna Shivpuri Arya got talking to Kirit Mehta, Marketing Director and Founding Member, RSA Logistics to know more about contract logistics and how it works.
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W
hat is contract logistics? And how does it help a company?
In this fast-moving world, industrial and commercial firms have been outsourcing logistics services more and more. While standard activities, such as transportation, handling and warehousing have dominated in recent years, today companies are looking further afield by outsourcing more complex functions. Long-term contracts tailored to the specific needs of each customer make up a special type of logistics services – contract logistics. Contract logistics is a business unit that manages a wide range of logistics services on behalf of customers which includes – • receipt of goods into a warehouse, • quality control • vertical carousel storage • order receipt • order picking/packing • order consolidation/dispatch • delivery • re-order of stock lines • stocktaking, ticketing and labelling • storage solutions Contract logistics enables businesses to outsource distribution and warehousing solutions and drive value through superior return on capital, sustained growth, and proactive risk management. There are shorter lead times and cheaper inventory as compared to storing in the West.
How mature is the market for contract logistics in the UAE and Middle East?
The transport and logistics sector in the Middle East region is showing substantial
growth rates and yielding attractive operating margins. The Middle East is receiving significant attention from transportation and logistics players worldwide. Thanks to substantial investments in infrastructure, as well as until recently significant economic growth, investors see attractive opportunities in the logistics industry in the region. Furthermore, local governments aim to establish a thriving logistics service industry and ensure that regional companies benefit from the new opportunities.
What does your company offer by way of contract logistics?
We offer a complete 3PL package ranging from distribution, transportation, warehousing, documentation and supply chain management as well as international freight services based on international single and multi-modal freight-forwarding, that includes air, sea and road that would help companies reduce costs and enhance customer services. RSA Logistics DWC LLC offers services such as freight forwarding and clearing, inventory solutions, dedicated transport services, transport management services, warehousing and distribution. We’re also able to integrate these services and optimise the entire demand network. Our focus is customer-centric: concerned with their realities, requirements and how best we can productively match these with our skills, capabilities and resources. We at RSA DWC Logistics have multiple-user facility – our facility is world-class and is equipped with an advanced warehouse management system
Contract logistics enables businesses to outsource distribution and warehousing solutions and drive value through superior return on your capital, sustained growth, and proactive risk management. There are shorter lead times and cheaper inventory as compared to storing in the West.
Kirit Mehta, Marketing Director and Founding Member, RSA Logistics
(WMS), featuring RF-based operations, barcoding, cycle counting and customised reports. The WMS portal provides supply chain partners with real-time access to inventory data via the internet, 24/7. Our multi-purpose open, dry and temperature controlled warehouses are suitable for a wide variety of products. Our comprehensive co-packing operations include: • Sorting, stacking, racking, picking, packing and co-packing • Palletisation, strapping, shrink and stretch wrapping • Re-labeling and multi-label date stamping • Documentation • Retail distribution • General and perishable cargo / project cargo • Quality testing • Programmed cycle counting and customer-driven stock counts • Inventory control • Top-end warehouse management system with RF-scanning • Reverse logistics
In today’s economic environment, can contract logistics help companies reduce costs and enhance customer service?
Yes, in terms of planning and managing the quantities in bulk movements. With higher AUG - SEPT 2012
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TRADE TALK Logistics
volumes the rate benefit plays a vital role which can be passed on to the client. We focus on offering customised solutions that help our customers maximise operational efficiencies, reduce costs and on time reliable service to run an efficient contract logistics department.
How do you manage complex supply chains within the UAE and Middle East?
We have a wide range of agent network which assists us in providing contract logistics solutions globally. We utilise the best resources, capabilities, and technology in the market to design solutions that provide the greatest efficiencies for our clients’ supply chains. We provide on the ground physical logistics expertise to back up our intellectual capabilities and management expertise. We are experts in shipping, handling and storing various types of cargo. We specialise in the below activities. • Warehousing • Air and Sea consolidations • Full container loads • Trans-shipments • Reefer loads • RO/RO • Heavy, out of gauge and hazardous cargo • Liquid and dry bulk • Break bulk cargo
What are the current trends and advancements in contract logistics, especially in this region? Middle East is considered as the global hub for logistics. The territory is closely knitted with the air and sea ports for multimodal, air to sea and vice versa movements. The most important trend in logistics is considered to be the constant advances being achieved in terms of speed, quality of service and flexibility to cater to the client’s activities. RSA Logistics DWC LLC thrives in following the current trends and also continually looks into designing, planning, implementing and managing cutting30
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edge supply chain solutions for our clients that enable them to become more competitive, leaner and more effective as organisations.
What is your advice to exporters and importers about how they can avail contract logistics services in this market place? Customers have the liberty of consigning shipments in the name of companies who are based in free zones, which entails them
We have been using our expertise to provide our customers with reliable opinions to ensure their cargo will arrive safely and efficiently be it by air, sea or land transportation. We provide customers with on-time deliveries for inbound and outbound shipments. We offer customers time-sensitive solutions for their specific needs. Customer requirements are our focus. We also offer customised and costeffective options for customs brokerage and cross-port services.
Middle East is considered as the global hub of logistics. The territory is closely knitted with the air and sea ports for multimodal, air to sea and vice versa movements. The most important trend in logistics is considered to be the constant advances being achieved in terms of speed, quality of service and flexibility to cater to the client’s activities.
to enjoy the benefit of not paying duty while importing goods into free zones. There is easier accessibility to various destinations in the UAE using Dubai as the main hub as it is easily accessible from all routes in the UAE.
It is also important for exporters and importers to have round the clock business support, excellent communications and information systems which makes response time fast and effective.
TRADE TALK Finance
Driving the flow of trade In the first of a two-part series, Paul Boots, Director, DMCC Tradeflow, looks into the history of trade in the Emirate and DMCC’s role in transforming Dubai from a trade port to a trade hub.
D
ubai’s strong trading heritage, ranging from its well-established port to its logistical infrastructure, stems back to the seventh century, when the Umayyad people introduced Islam to the area. The entrepreneurial spirit of Dubai was born, completely revitalising the city, opening up trade routes to modern day India, Pakistan and Iran. In the early 1900s, trade in and out of Dubai increased rapidly under the leadership 32
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of H.E. Sheikh Maktoum Bin Hasher. His vision to launch the most business friendly port in the lower Gulf was quickly realised by cutting fees and abolishing duties and taxes, soon turning Dubai into a free port and the dominant player in the region. Decades later, H.E. Sheikh Rashid Bin Mohammed Bin Rashid Al Maktoum was instrumental in modernising Sheikh Maktoum Bin Hasher’s vision and in the mid-1950s he ordered a critical innovation,
the dredging of Dubai Creek. This engineering feat enabled vessels of all sizes to dock at the port, resulting in an explosion in trading volumes and, in particular, the gold export market. The discovery of oil over 30 years ago gave birth to an entire new industry in the UAE. It also transformed the country into the modern metropolis it is now, with a high standard of living and an open economy. At the time, Dubai’s leadership chose to invest
their oil wealth back into the local economy by investing in its logistics infrastructure. As a result, Dubai became a world-class logistics corridor, a key link in the global transport and distribution system, and a destination of choice for companies seeking to capitalise on growth opportunities in the region.
ABOUT
Visit www.dmcc.ae for further information about the Jumeirah Lakes Towers Free Zone
From a trade port to a trade hub
In 2002 His Highness Sheikh Mohammed Bin Rashid Al Maktoum issued a decree to create a commodities centre to stimulate trade flows through the Emirate by providing the physical, market and financial infrastructure required. The Dubai Multi Commodities Centre was born. It was launched with a land bank of little more than 200 hectares of pure desert. Today, that land is known as the Jumeirah Lakes Towers (JLT) Free Zone, also home to the Dubai Diamond Exchange, one of the world’s largest diamond-trading platforms. Prior to the launch of DMCC a decade ago, Dubai’s diamond trade was worth USD 5 million. Last year alone, more than USD 41 billion in diamonds was traded through the Emirate. Similarly, DMCC also cemented Dubai’s role as a modern and responsible trading centre for gold, with USD 56 billion moving through the Emirate in 2011. The land bank was developed into prime real estate to support the centre’s growth. DMCC provided physical infrastructure for the commodities business from its headquarters in Almas Tower, which is at the centre of the free zone. There are now over 50,000 people living and working in JLT’s 61 residential and office towers. It is also home to over 4,600 companies. Impressively, DMCC continues to grow, despite negative regional and macroeconomic headwinds. In 2010, an
Paul Boots, Director, DMCC Tradeflow
average of 60 companies registered per month; in 2011, that number grew to 100 per month and this year that number amounts to over 150. This growth has in turn contributed to the growth of the Emirate as a whole - 85% of companies registering with DMCC are new to the Emirate and DMCC has contributed over USD 12 billion to the growth and development of Dubai as a commercial and trading hub.
Modernising and regulating sustainable commodities trade
DMCC’s market infrastructure is extensive and focuses on facilitating commodities trading. Initiatives range from the development of world-class regulations
In 2002 His Highness Sheikh Mohammed Bin Rashid Al Maktoum issued a decree to create a commodities centre to stimulate trade flows through the Emirate by providing the physical, market and financial infrastructure required. The Dubai Multi Commodities Centre was born.
and standards to improve the tradability and value of commodities passing through the Emirate, to networking and trading platforms such as the Dubai Diamond Exchange and the Dubai Tea Trading Centre. Recent examples include the development of guidelines on ethical and responsible gold and precious metals supply chain management for DMCC licensees, based on OECD’s recently issued gold trading guidelines. The publication includes recommendations for global responsible supply chain management of gold to avoid contributing to conflict through purchasing decisions and supply chain practices. The Dubai Diamond Exchange (DDE) is also part of the physical infrastructure managed by DMCC based in Almas Tower (the Middle East’s tallest commercial tower). The DDE provides traders and manufacturers access to the growing Middle Eastern diamond market including state of the art facilities, vaults, the Kimberley Process Certification Scheme (only GCC country to be member), polishing laboratory and security. It has also signed up over 500 of the world’s leading diamond companies as members. Other initiatives extend to the financial sector, with the launch of the Dubai Gold & Commodities Exchange (DGCX); the regions first commodity derivatives exchange in 2005. DGCX trades a range of futures contracts that provides producers, manufacturers and end users, with an opportunity to hedge their price risk exposure. The Exchange’s ‘Rupee’ contract was one of the key drivers of DGCX’s volumes in 2011, with an increase over 1331% from the previous years. Today, DGCX is the leading derivatives exchange in the Middle East. It is universally acknowledged that there is a desperate need for liquidity in the market place, and with the ongoing difficulties in measuring risk, banks and AUG - SEPT 2012
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TRADE TALK Finance
financiers are hesitant when considering the release of capital. It is now becoming widely accepted that utilising a commodity receipt system provides a robust instrument allowing the mitigation of certain risks. As part of its specialised offering and in order to address a key gap in the regional trade finance industry, DMCC developed
in 2007. These receipts have helped financiers mitigate lending risks by allowing commodity owners to pledge the ownership of their commodities to financiers in return for access to working capital. Earlier this year and after continuously listening to the market, DMCC enhanced the platform and launched DMCC Tradeflow; an electronic
Through an electronic platform owners of goods stored in rated warehouses in the UAE can request warehouse keepers to issue “DMCC Tradeflow Warrants” that represent the ownership of their goods. These warrants can be used by the owners to pledge beneficial ownership or transfer title of the stored goods to financiers as collateral in return for working capital.
a trading financing tool for commodities located in the UAE, called the Global Multi Commodities Receipt (GMR) in 2004. At the time, DMCC was the first, non-banking institution to offer such specialist tools in the region. This was later expanded to include gold (Dubai Gold Receipt) in 2005 and to commodities outside the UAE (International Commodity Receipt) 34
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system that provides access to the central registry of ownership for commodities stored in Dubai. Its robust legal framework, combined with the DMCC’s role as the platform’s registrar, stimulates commodities trade by offering enforceable collateral based trade finance solutions for regional and international financiers.
Through an electronic platform owners of goods stored in rated warehouses in the UAE can request warehouse keepers to issue “DMCC Tradeflow Warrants” that represent the ownership of their goods. These warrants can be used by the owners to pledge beneficial ownership or transfer title of the stored goods to financiers as collateral in return for working capital. All features of the platform have been developed according to international trade finance and banking best practices, in addition to facilitating financial institutions’ compliance with Basel III stipulations. As a direct result of demands from financiers from around the world, DMCC Tradeflow also introduced a Warehouse Inspection and Ratings Programme for the international commodities industry. Since its launch in February, Tradeflow has registered and facilitated more than 100 pledges related to a wide range of commodities including gold, oil and steel stored in the rated warehouses around the UAE.
Onwards and upwards
Just six decades after the dredging of the Dubai Creek, now even more so than ever, Dubai is once again perfectly positioned to support the inextricable growth within the commodities sector. Perhaps now even more so than ever as the importance of where business centres are based across the world is shifting from North to South and from West to East. Its physical and social infrastructure is undisputedly the best in the region, its diverse talent pool and the strong rule of law means that it will continue to prove an attractive destination for the establishment of businesses and the development of trade. Commodities trade will always be a key component of Dubai’s vision of becoming a dynamic and diverse economy, and the gateway to the emerging markets of the Middle East and beyond. DMCC and the Jumeirah Lakes Towers Free Zone play an important role in this evolution and are increasingly recognised as a leading international commodities hub and a significant engine in Dubai’s economic growth.
TRADE TALK Investment
Exploring investment opportunities Lebanon presents a wealth of opportunities for foreign investors. The Investment Development Authority of Lebanon highlights the sectors that can be explored by our readers, who are looking for expanding overseas.
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pportunities exist in sectors which are based on Lebanon’s competitive advantages – its educated labour force, its strategic location at the cross road of east and west, access to a population of almost 300 million, ideal climate and a stable banking system. From that perspective, opportunities exist in the following sectors which display the potential and readiness for development:
HEALTHCARE TOURISM: Projects targeted for tourists in the healthcare sector have enormous potential given Lebanon’s strong fundamentals in offering these services. Lebanon has one of the highest ratio of beds to population (34 beds per 10,000 population compared to 72,000 in France and 18 per 10,000 in Jordan) and one of the highest ratio of doctors to population (33 doctors per 10,000 compared to 37 in France) considered one of the of the 36
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best-in-class healthcare body in the region. In addition, two of Lebanon’s hospitals are JCI accredited with all the remaining ones benefit from an Australian accreditation. More than 70 medial specialisations exist ranging from cosmetic to open heart surgery. The majority of Lebanese hospitals have formal linkages with international hospitals, such as John Hopkins among others. Lebanon has the potential to attract and develop wellness and spa resorts, in addition to long-term care and/or postsurgery rehabilitation centers. Lebanon’s unique climate in the region makes it an ideal destination for tourists seeking medical treatment. The number of leisure tourists to Lebanon hover around 2 million and has been growing at a trend of 25% y-o-y. More particularly it is estimated that medical tourists constitute 10% of the total number of incoming tourists to Lebanon, reaching 235,000 tourists in 2009. Demand for healthcare services have been on these
rise over the last couple of years as indicated by the growing number of international patients seeking treatment in Asia and the region. Healthcare tourism sector is estimated to have a size of USD 4 billion in Asia alone. Today, there is an under-supply of these services in Lebanon leaving much room for foreign investors to develop these facilities, supporting the Lebanese government’s effort to turn Lebanon into a center for medical tourism. MEDIA: Lebanon has the potential to significantly attract investments to this sector in both the traditional media consisting of production and post-production facilities, or in the new emerging digital media. Lebanon could serve as a base for TV and film production and post-production and the government is in the process of launching a digital media city in Lebanon that would offer attractive perks. The potential for Lebanon to turn
TRADE TALK Investment
into a media hub resides in following characteristics: • A regional hub for the media and entertainment industries: Today the country has a solid TV and audio-visual industry and hosts the most widely viewed television satellite channels as well as the most prominent production companies in the region. • Skilled, talented and creative labour force: Lebanon is the source of talent to the entire Arab region with specialised universities and faculties. This is compounded with a relatively cheap labour force compared to the region • Access to a large Middle Eastern market: Highly promising with a youthful population ensuring a continued rise in demand; 34% of the Lebanese population is under the age of 15 and 34% falls under the age of 30. • Liberal media sector: The country has the most liberal media sector in the Middle East, with minimal to no restrictions on broadcasting and publishing activities. Lebanon is one out of only three countries in the MENA region classified as partially free. • Adequate legal framework: The Lebanese government has persistently spearheaded efforts to modernise media laws while playing an active role in enforcing intellectual property rights and regulations Opportunities exist for the long-run given a large and growing customer base, continued growth of advertising expenditures, and new platforms including the Internet and mobile offering new business opportunities. More specifically, investment opportunities exist due to the convergence between the media and telecom sectors that has opened new horizons in the field of digital media, with opportunities arising in the following:
ABOUT
The Investment Development Authority of Lebanon (IDAL) is Lebanon’s national investment promotion agency. It aims to promote Lebanon as a key investment destination, and attracting, facilitating, and retaining investments in the country. IDAL provides local and foreign investors alike with a range of incentives and business support services across the following sectors; Industry, Agriculture, AgroIndustry, Tourism, Information Technology, Technology, Telecommunication, and Media. In addition to its role as investment promotion agency, IDAL is entrusted with the active promotion and marketing of Lebanese exports including but not limited to agricultural and agro-industrial products. For more information please contact invest@idal.com.lb
• • • •
Content creation in Arabic Online gaming Online advertising Specialised 3D animation
The digital industry in Lebanon is propelled by the increase in mobile and internet penetration rates both at the local and regional levels. Internet growth rate in the Middle East have grown at 2245% over the last decade, the second highest growth rate in the world. The increase in Internet penetration, coupled with an increase in advertising expenditures, in the region signal an opportunity to create content for the web and mobile. Internet advertising revenues have totaled USD 6 million in 2010 and are expected to surpass more than double this figure and reach USD 14 million by 2013. Arab Internet advertising expenditures have grown at an average rate of 8% over the period 20072011. The Ad revenues generated from the internet currently account or 4.2% of total Arab ad revenues. Television broadcasting continues to be the primary source of entertainment revenues and also offers opportunities especially in: • Content creation for local TV’s • Post production services, including dubbing and subtitles
Lebanon could serve as a base for TV and film production and post-production and the government is in the process of launching a digital media city in Lebanon that would offer attractive perks.
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Business Process Outsourcing (BPO) in the ICT sector: Lebanon can serve as an outsourcing destination for companies engaged in ICT activities or which develop software solutions. The ability of Lebanon to serve as outsourcing destination hinges on the following characteristics: • Lebanon enjoys one of the best specialised labour force in the region: It is ranked third in the MENA region in terms of ICT development skills index which captures ICT capabilities and skills. • Lebanon enjoys one of the most skilled and creative labour force: Due to a world-class educational system: Lebanon is 12th globally in the overall quality of education, and 6th globally in the quality of math of science education. • Lebanese engineers are the most competitive with wages in software development amongst the lowest in the region and compared to selected OECD economies Opportunities exist for investors to subcontract the production of software, develop e-platforms, security applications and tele-health services. Along these lines, opportunities exist in growing the high tech sector, with Lebanon now moving up the value chain in the ICT sector, diversifying from software development to the manufacturing of ICT components. Some success stories have been registered in Lebanon with producers of micro processing chips and controllers now serving the international markets. Opportunity thus exists for Lebanon to become outsourcing base for the manufacturing of electronics due to its low cost compared to the region and EU wages.
country
FOCUS
BRAZIL
BRAZIL
arAB BRAZILIAN CHAMBER OF COMMERCE
BILATERAL TRADE
FOOD BUYERS EVENT
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FOCUS INTERVIEW
Developing partnerships Aparna Shivpuri Arya got talking to Michel Alaby, Director General, The Arab Brazilian Chamber of Commerce (ABCC), to know his thoughts on Brazil’s relations with the Middle East and what plans does the ABCC has to promote these ties.
We are working on diversifying our products, other than food. We have good opportunities in building material, cosmetics, furniture, auto parts to name a few.
What are the products and services both the countries trade in?
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Brazil is a traditional exporter of food products to the Arab countries, however in the last years, exports of machinery, vehicles and airplanes took an important place on the list. The Arab countries’ exports to Brazil are mainly composed of fossil fuels, fertilizers and chemical products for the plastic and rubber industries. There are potential possibilities for export to Brazil of some Arab products, like: olive oil, dates, olives, handcraft, garlic powder and onion, among others.
lease give us some details about Brazil and Middle East trade relations.
The Brazilian – Arab countries relationship have been strengthened in the past 15 years. Since 2003, the first official visit of a Brazilian President to the region, trade increased 360%. Brazil is the most important trade partner for Middle eastern countries in Latin America. For Brazil, the largest trade numbers happen with Saudi Arabia, Egypt, Algeria, Morocco and the UAE. It is not incorrect to say that, in trade terms, the economies of these countries are complementary, not competitive. Through a strategic angle, exports and imports lack of diversification, as they are concentrated in a few items 40
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each. Furthermore, there are Brazilian investments in Arab Countries and Arab investments in Brazil. The current trade between Brazil and Arab Countries have reached USD 25.09 billion in 2011. The Brazilian exports reached USD 15.11 billion and the imports USD 9.98 billion. In 2012, from January to April, the total current trade reached USD 7.67 billion, with Brazilian exports of 4.25 billion and imports USD 3.42 billion. The relationship is in a very good shape. With UAE we have an ethusiatastic and important relationship. We participate in the trade shows and we also receive a lot of businessmen from there. This year we plan to have two delegations in November to Dubai and our relationship is growing.
What is the role of the ABCC in promoting bilateral relations?
The Chamber’s objective is to consolidate and develop partnerships, create business opportunities and mainly gather Brazilians and Arabs, so as to improve information flow and knowledge exchanges among them. As a member of the General Union of Arab Chambers of Commerce, Industry & Agriculture, the Arab Brazilian Chamber of Commerce is officially recognised in Brazil as the legitimate representative of the trade interests of the Arab League states in Brazil. With a new structure, created to offer prompt information to all its members, the Chamber relies on a specialised team focused on the Brazilian and Arab markets, constantly searching for social-economic data and trade opportunities.
We work through such events, together with the Brazilian government and the Dubai Chamber of Commerce and nowadays we have also started engaging with Dubai Exports. But we need to improve and give more opportunities to the Brazilian businessman- there is a proverb – excellent is the enemy of the good. We need to have more services to help the Brazilian and Arab businessmen. We also help Arab businessmen who want to invest,trade, or find good and reliable suppliers and companies or start a joint venture.
If you were to get to talk to the Middle East companies, how would you encourage them to invest in Brazil. What reasons would you give them for doing business with Brazil? Brazil is a growing economic and a regional leader by nature. Political and financial stability is a green light for
What challenges to Brazilian companies face in doing business in the Middle East? Some business sectors complain that maritime freight lines are very few, so the logistics must be improved. The distance has been shortened because we have three major airlines connecting Turkey, Qatar and the UAE directly to Sao Paulo and Rio de Janeiro, with daily flights. Businessmen may find the language an obstacle, but we are aware that this issue is becoming a thing of the past. Also, there needs to be an effort to cultivate a relationship. For example, some Brazilian companies asked us about JAFZA and we gave them all the details and who they need to talk to and we advised JAFZA that some Brazilian companies will be coming to you. But investment is not a short term question; you need to cultivate the relationship. It will not be done with one trip. Also, culture is different- you need to understand the culture. The distance
The Chamber’s objective is to consolidate and develop partnerships, create business opportunities and mainly gather Brazilians and Arabs, so as to improve information flow and knowledge exchanges among them.
investors, and natural resources are present in huge amounts. The protection of foreign investments is taken very seriously in Brazil. Global events, such as the World Cup and Olympics will take place in Brazil, creating countless opportunities for several sectors. You need to give businesses some sectors they want – and then they will invest. For example, real estate, shopping malls, sugar refineries, meat, corn are some sectors where there can be joint ventures. So you need to show the business opportunities so that there can be marriage between the investor and the market. Usually Arab companies use a local partner as it is more easy and more comfortable for them.
can sometimes be a hindrance but now we have Emirates and Qatar Airways and Etihad will be starting in 2013.
If Middle Eastern companies want to set up a branch or office in Brazil, how should they go about it? What legal, financial and business support services does the government offer? The Brazilian Government has a one-stopshop agency for investors, the Apex - Brasil (www.apexbrasil.com.br/portal). This public organisation works very closely with the Arab Brazilian Chamber of Commerce in the Middle East region. Apex Brasil’s actions in many Arab countries are fruitful and their structure is well defined to help foreign investors. For
Michel Alaby, Director General, The Arab Brazilian Chamber of Commerce
advisory, all the largest global firms have offices in Brazil, such as PriceWaterhouse, KPMG, Delloite and Ernst & Young.
Which sectors hold the most promise for the Middle Eastern businesses?
With the discovery of the so called “pre-salt” oil basin and the large experience Middle eastern companies have in this field, it becomes an attractive opportunity. The non-oil energy presents a good possibility for the Arab investor. Agribusiness is also a very interesting sector for those companies, as they have a serious concern on the food security. Brazilian food producers are looking for partners, local or foreigners, in order to expand their capacities. The shopping malls, real estates, hotel and resorts can be a profitable opportunity for Arab companies, to invest in a market of 200 million inhabitants.
Are there any bilateral trade or investment agreements, MoUs between both the countries?
The Mercosur Trade block (where Brazil is a founding member together with Argentina, Uruguay and Paraguay), signed Frame Free Trade Agreements with Palestine and Egypt, which need to undergo Congresses approvals. There are negotiations with Gulf Cooperation Council, Morocco, UAE and Jordan, in the same format, but they are currently on hold. AUG - SEPT 2012
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Go Brazil! Brazil, though very far, geographically, is slowly becoming one of the closest trading partner of the Arab region. With its diverse natural resources and the variety and quality of products offered, it is eager to build ties with the region. One of Brazil’s most important sector is food products-especially beef and chicken. Aparna Shivpuri Arya brings you a detailed analysis of the bilateral trade relations, with a special emphasis on the food sector.
B
razil has the largest Arab community outside the Arab region, with approximately 12 million Arabs based in the country. As we can see from the graphs, KSA, Egypt and the UAE are the top three markets for exports in 2011, for Brazil. Ten years ago Brazil was totally focused on the US and Europe but then it changed gradually and Brazil started showing interest in the Middle Eastern countries and started to promote ties and build trade relations. Brazil has a very diversified range of exporting sectors, however more than half of the exports to the Arab region comprise of meat, sugar and iron ore. Trade between the Arab world and Brazil showed a surplus in favour of Brazil. KSA has been the top destination for Brazilian exports so far. Brazil is UAE’s fourth largest trading partner. Ther are around 25 major Brazilian companies in the UAE. Brazil’s trade and tourism will be given a boost with the FIFA World Cup 2014 and the Olympics in 2016.
Exports from the Arab region to Brazil 2011
Exports to the Arab region (2011)
Brazilian exports to the Arab region stood at USD 15.5 billion in 2011, whereas the imports stood at USD 9.99 billion. KSA is one of the major trading partners of Brazil in the region.
Brazilian Exports (January-December)
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Sugar and meat were the top two products exported to the Arab region from Brazil, while minerals and fertilizers topped the list of exports from the Arab region.
There is potential for exporting machinery, cosmetics, jewellry and many other products from Brazil. However, sometimes the obstacle is that Brazil is a huge market, so when local companies are looking to expand, they focus only on the national market. Secondly, language can also be barrier, but that is changing gradually with the present generation being interested in foreign languages.
Brazilian Imports (January-December)
Brazilian food exports to the Arab region
Food sector is one of the major area of international trade between the Arab region and Brazil. Due to water shortage and a lack of arable land in the UAE and Qatar, these countries need to import almost 90% of their food requirements. Their dependence on food imports is expected to increase rapidly due to population growth, increased per capita income and a resulting increase in per capita consumption. According to the Economist Intelligence Unit (EIU), the UAE’s food imports are expected to reach USD 5.5 billion in 2015, up from USD 3.6 billion in 2010. Qatar’s food imports are also expected to increase, reaching USD 2.1 billion in 2015, up from USD 1.3 billion in 2010. This provides the syngery for bilateral trade. Brazil has the world’s largest livestock herd and is the largest exporter of beef.
Some facts about Brazil Third largest producer of fruits:
• 1st in orange production (largest production of orange juice); • 1st papaya production; • 2nd in bananas production;
World’s second largest producer of grains; • 1st in soybean oil exports; Largest producer and exporter of green coffee; Second largest producer of organic foods;
Brazil has been very proactive in supporting The Brazilian Trade and Investment Promotion Agency (Apex-Brasil) is responsible for attracting foreign direct investments to Brazil, mainly to the segments of oil and gas, aerospace industries, environmental solutions (renewable energy and solid waste treatment), semiconductor industries, tourism-related real estate developments, bioscience, and venture capital & private equity (VCPE) transactions. Apex-Brasil assists the foreign investor throughout the entire investment process in Brazil. The Middle East is a key market to trade promotion actions designed to foster Brazilian exports of goods and services. For that reason, ApexBrasil operates a Business Support Center in Dubai, assisting Brazilian companies willing to do business with local buyers. The Business Support Center is also a reference for Arab investors willing to allocate resources in Brazil, especially in the aforementioned segments. As part of highlighting the trade opportunities, Trade and Export Middle East, covered the Food Buyers Event which was organised by the Arab Brazil Chamber of Commerce in Sao Paulo in July. * The graphs and charts have been taken from the ABCC
Source: Arab Brazil Chamber of Commerce, http://www.ccab.org.br/infobiz-online/en/ general-data/brazil.aspx
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FOCUS Event
The art of matchmaking In order to promote international business opportunities between the food sector in Brazil and the retail chains in the Arab region, the Arab Brazilian Chamber of Commerce (ABCC) organised a Food Buyers Event in Sao Paulo in July. Aparna Shivpuri Arya brings you exclusive coverage of the event.
T
he event was organised by the ABCC in collaboration with Apex - Brasil, from the 9th-14th of July 2012. Ten big supermarket and retail chains from the Arab region were present at the event. The list included• Choitrams,UAE • Spinneys, UAE • EMKE Group -Lulu,UAE • Federal Foods, UAE 44
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• International Centre Group for Food Stuffs, Kuwait • Barakat International, UAE • The Sultan Centre, Kuwait • Al Yasra Foods, Bahrain • Sons of Hamed Y Alessa Co, Kuwait • Babasons, Bahrain
The Arab Brazilian Chamber of Commerce is the sole Chamber of Commerce in Brazil
officially recognised by the General Union of Chambers of Commerce, Industry and Agriculture for Arab Countries. Founded in 1952, it strongly fosters trade, tourism, cultural and trade relation between Brazil and the Arab Nations. On the first day of the event, the buyers from the Arab region were given a brief overview of the food sector in Brazil and the role of the ABCC in promoting trade.
On the 10th and 11th of July, business matchmaking sessions were held between the companies of both the sides. The ABCC had set up work stations for all the supermarket chains from the Arab world and each Brazilian company was given approximately half an hour to discuss their product. The enthusiasm in the Brazilian companies was palpable, with over 60 companies vying for the buyers’ attention. Flavio Silva, from Marfrig, one of the biggest exporters of beef to the Middle East, highlighted the importance of the Middle East market for them. He said that Lebanon, KSA and the UAE were their biggest markets. Talking about this event, he stated “We believe that retailers have a lot of influence, and that is why we are trying to tie up with them through this event. We would like to do direct trading.” Other participants were also quick to point out that, this event is helping them build a close relationship with the retailers in the Arab world, which has been difficult to build. “We understand the culture of the Middle East, where it is not only about price, but also about building a relationship,” said Flavio. The two-year old coffee company Café Fazenda Caeté wants to enter the Arab market with an exclusive product. “Our product is one-of-a-kind in the world; we hold the patent for it. It is grounded and roasted coffee, only it is an infusion, like a tea. It’s a convenient coffee for people who live alone, who need to be practical,“ explained Commercial Director Fernando Costa. The São Paulo-based trading company Energy, which exports sugar, one of the top export products, from Brazil already sells to all of the Arab countries, and has come to the matchmaking rounds looking for new deals. Priscila Ruiz, of trading company Argofruta, hoped to find an importer for her products in the Middle East. “We want to find a company that will buy from Argofruta and sell to [end] consumers. My company exports fruits- limes, mangoes, grapes and nowadays we export these kinds of fruits to Europe and Canada. We cannot export to a lot of countries, since the shelf life is short. We are interested
in the Arab countries, because we got to know that Brazil is exporting a lot of fruits to the Arab region, especially KSA and the region is interested in receiving fruits, for hotels and so forth.” Talking to Eduardo Abud from Cafe Canecao, highlighted that the opportunity this event has given them is very important for them. And they are open to any country in the region. The business matchmaking sessions continued the whole day from 9:00am-6:00pm for two days, with the same number of companies turning up the next day as well. This went to show the eagerness of the Brazilian companies to trade with the Arab world. Suresh Kumar from Barakat, UAE, said he is very optimistic about Brazil. “We are into expanding our operations in the entire
Middle East. We’ll be having a processing plant, for meat, seafood and poultry. As part of the expansion, I have come here to see, what we can bring in terms of meat, beef, lamb and also fruits. I have met a lot of suppliers and some of them will be able to give me support in beef and lamb.” Talking about challenges Suresh said that there are no such big challenges except that UAE is a small market and competition gets tough. So there is a price war. Sandeep Khimnani, from Choitrams added freight and lead time to the challenges. Sandeep Khimnani, from Choitrams was full of praise for the ABCC for organising this event and getting a good mix of industries. “We have met diverse industries. As a group, for us, Brazil, other than meat and sugar is an unexplored territory and we want to see how
There is great potential for expansion for Brazilian products in the Arab world. It is estimated that the halal market has represented approximately USD 2 trillion dollars in the last few years in the areas of food, cosmetics and other products.
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FOCUS Event
we can find other products. Agriculture is Brazil’s strength and we are looking around to see potential and then based on those” Talking about their experience in this event, Naraynan Raman and Narayan Swami, from EMKE Group, were very optimistic about the Brazilian products. “The event has been very productive and very well-managed and we have got some good offers. We will now study the market and then we will get in touch with them. Chicken and beef products are doing very well in the Middle East. Actually all the products from Brazil are well known in the market. Sugar is also an important
beef exports have grown by 11% from 2010 to 2011. Egypt is the largest importer of Brazilian beef (40%), followed by KSA (15%), Libya (7%) and the UAE (4%). To meet the requirements of the Arab countries, all the products are halalcertified, and all the companies have to get a halal certification and Brazil is the largest halal exporter in the world. However, as of now the average price of beef is down because of the financial crisis, since demand has fallen. According to Ricardo Santin, UBAEF, in 2011, the total exports of poultry from Brazil were USD 8.8 billion and this sector
In 2011, approximately 69.8 % of the meat produce was consumed by the domestic market, while 30.2% was exported. Brazil is the third largest producer of meat after the US and China. 36% of the foreign exports is to the Middle East market- with KSA (16%) leading the pack.
commodity, just like coffee. Brazilian products are value for money and they never compromise on quality. The ABCC is also closely involved, especially with halal issues.” Khushi Gurbani, from Babasons, Bahrain, said that his main purpose for coming here was to explore new commodities and this trip has helped him in understanding the Brazilian market. He was also optimistic about finding a couple of clients to moving to direct supply rather than agents. On the 12th of July, the delegation met up with the Brazilian Exporter and Producer Association for Chicken Sector (UBABEF) and the Brazilian Exporter Association for the Beef Sector (ABIEC). Beef and chicken are one of the major exports from Brazil to the rest of the world. According to Dr. Antônio Camardelli, ABIEC, Brazil is the third largest producer of beef after the US and China. 36% of the foreign exports are to the Arab region, with Egypt and KSA leading the pack. Russia is the largest client for natural meat and Brazilian 46
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employs 3.5 million people. In 2011, approximately 69.8 % of the poultry produce was consumed by the domestic market, while 30.2% was exported. KSA again is the main importer in the Arab region (16%) followed by the UAE (5%). The price of chicken is determined by the price of soya bean and corn and therefore it is difficult to predict the price of chicken products. On the morning of the 13th, the delegation visited the premises of FAMBRAS (Federation of Muslims Associations in Brasil) and the meat packing company Marfrig. FAMBRAS is the most important Islamic entity in Brazil and is responsible for supervision and certification of Halal for all products as per the Islamic law. FAMBRAS has initiated a “Standard Halal Brasil” project to standardise the halal process to ensure that rules are followed and there is more transparency. There is great potential for expansion for Brazilian products in the Arab world.
It is estimated that the halal market has represented approximately USD 2 trillion dollars in the last few years in the areas of food, cosmetics and other products. As production and exports increased, FAMBRAS created the Brazilian Islamic Centre for Halal foodstuff, which became responsible for application of the halal concept and the production system in Brazil. The group’s final appointment, this Friday afternoon, was a meeting with ABCC’s CEO Michel Alaby, at the organisation’s headquarters. Alaby spoke to each of the delegation members about their opinions on the visit, and asked for suggestions for eventual improvements in the future. The general assessment was positive, and the businessmen left Brazil with an optimistic outlook of turning the contacts made with suppliers into actual deals.
Focus commodity watch
Commodity prices snapshot The main events of the month will continue to be centered on the FOMC result released on Aug 22 and the EU debt crisis, as the ECB will announce its interest rates and might even consider rescue plans for the debt crisis in Spain, Italy and Greece. Whereas the crude oil prices has been affected mainly by the Middle East tension. Moreover the fluctuation in the Euro/USD coincided with the movement of precious metals prices. Reem Aboul Hosn, Senior Financial Analyst, Zawya, tells us how the key commodities performed over the month of August 2012.
NATURAL GAS
Natural gas declined all along the month of August an overall decline of 13% from 3.22 to reach USD 2.7 /mmbtu; an average daily change of -0.2%. The temperatures have declined in recent weeks as the heat has dropped enough to pull the consumption down.
BRENT Oil prices continued their upward trend during the third week of August. Brent oil increased by 2.5% to reach USD 115.77/b on August 23 2012, worries over a rising tensions between Iran and the region has contributed to the rally of oil rates. The news announced in Q2 2012 regarding the contraction in the EU GDP by 0.2% may have diminished the rise in oil prices. Overall, in August Brent oil increased by 9.29%.
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Data provided by Zawya
Focus commodity watch
GOLD Gold prices started the month at its lowest and hit rock bottom on August 03, 2012 at 1592, a 1.7 % decrease from last month closing price. Shortly after, the price eased up and increased over the second week of the month and resumed their rally affected positively by the FOMC decision to issue another QE program to stimulate the economy, by the end of the third week, gold hiked by 3.3%. During the third week of the month the Euro/USD increased by 1.44% alternatively, AUD depreciated against USD by 1.49%. The decline of the AUD and the rise of the Euro have contributed to the rise in Gold rates Gold finished at $1,619.4 /t. oz.
Silver Silver, even more than Gold, edged up affected by Fed’s decision to stimulate the market and reached one month high on August 24, at 30.6, an 8% increase from the 27 rate during the previous week.
Data provided by Zawya
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Community
Save the date!
We know that you are a busy trader with a demanding events diary. Therefore, we are providing you with a snapshot of exhibitions and conferences in the region and around the world, so you spend less time planning and more time attending.
EXHIBITION
DATE
EXHIBITION
DATE
LOCATION
Middle East Natural & Organic Products Exp
5th - 7th
UAE
National Exhibition for Small & Medium Enterprises
5th - 8th
UAE
International Real Estate & Investment Show
7th - 10th
UAE
Airport Suppliers Conference
11th - 12th
UAE
Abu Dhabi International Motor Show
19th - 23rd
UAE
EXHIBITION
January 2013
LOCATION
August 2012
DATE
LOCATION
Tekno Tube Arabia
7th - 10th
UAE
Arab Plast
7th - 10th
UAE
Domotex Hannover
12th - 15th
Germany
Offshore Middle East
21st - 23rd
Qatar
ACBW 2012
2nd - 4th
Australia
PROMAT
21st - 24th
USA
Agrinsumos & Induspec & Business Expo
7th - 9th
Brazil
Trans Oman
28th - 30th
Oman
Auto Interio & Motoshow
3rd - 5th
India
February 2013 The NAFEM Show 2013
1st
USA
Furniture Manufacturing & Supply China
11th - 12th
China
Printpack India
5th - 10th
India
50th Bangkok Gems & Jewelery Fair
14th - 18th
Thailand
Regional Consumer Goods
15th - 17th
Germany
Thailand International Logistics Fair
19th - 22nd
Thailand
IDEX 2013
17th - 21st
UAE
Private Label Middle East Dubai 2011
23rd - 25th
UAE
Australian Oil and Gas Exhibition
20th - 22nd
Australia
Paper Arabia
23rd - 25th
UAE
March 2013 CeBIT 2013 (IT)
5th - 9th
Germany
TOC Container Supply Chain
1st - 3rd
UAE
Propak Africa
12th - 15th
South Africa
Centrallia
10th - 12th
Canada
Koplas
12th - 16th
Korea
GITEX
14th - 18th
UAE
Transinfra
13th - 15th
Switzerland
SCM Logistics World 2012
16th - 19th
Singapore
Motortec
13th - 16th
Spain
Paper Recycling Conference & Trade Show
23rd - 25th
USA
April 2013
September 2012
October 2012
November 2012
SMM India 2013
1st April
India
2011 UFI Congress
1st
UAE
Geosynthetics
1st-4th
United States
AutoRomania
1st
Romania
Brasilplast 2013
1st
Brazil
Oil & Gas Ukraine
1st - 3rd
Ukraine
EMAQH 2013
1st-13th
Argentina
Abu Dhabi International Petroleum Exhibition
5th - 8th
UAE
Aluminium Dubai 2013
1st
UAE
World Hospital Congress
8th - 10th
UAE
Intermodal South America
2nd-4th
Brazil
Dubai International Jewellery Week Exhibition
10th - 13th
UAE
Building Material and Equipment
2nd-5th
Russia
Dubai International Motor Show
10th - 14th
UAE
International ICT Expo
13th-16th
Hong Kong
Dubai Air Show
13th - 17th
UAE
May 2013
International Tourism Exhibition (ITE)
14th - 16th
UAE
Del Mar Electronics and Design Show
1st-2nd
USA
Roadex/Railex 2011
18th - 20th
UAE
Business4Better
1st-2nd
USA
2011 World Robot Olympiad UAE
18th - 20th
UAE
India Warehousing Show
2nd-4th
India
The Middle East HR Summit And Expo 2011
20th - 24th
UAE
Arabian Travel Market
6th-9th
UAE
HR Best Practices in Oil, Gas and Petrochemicals
21st - 22nd
Kuwait
Project Qatar
6th-9th
Qatar
Gulf a la Carte 2011
21st - 23rd
UAE
Hofex
7th-10th
China
SIAL Middle East 2011
21st - 23rd
UAE
WEPower
12th-14th
KSA
FM Expo + Big 5 Show
21st - 24th
UAE
Power Gen India and Central Asia
13th-11th
India
Milipol
26th
Qatar
Cards and Payment Middle East
14th-15th
UAE
Middle East Manufacturing Exhibition 2011
28th - 30th
UAE
Instal Middle East
14th-16th
UAE
SIM - Signage, Imaging & Media Show 2011
28th - 30th
UAE
Distree Middle East
14th-16th
UAE
Airport Exchange 2011
29th - 30th
UAE
PALME Middle East
14th-16th
UAE
Global Water and Beverage Technology Congress
29th - 1st Dec
UAE
Aquatech India
14th-16th
India
Saudi Food, Hotel and Hospitality Arabia
19th-22nd
KSA
December 2012 World SME Expo
1st - 3rd
Hong Kong
Middle East Event Show
21st-23rd
UAE
“China Import & Export Commodities Exhibition“
1st - 4th
Malaysia
Cityscape Qatar
22nd-24th
Qatar
World Green Tourism 2011
5th - 7th
UAE
Trans Middle East Beirut Exhibition and Conference
29th-30th
Lebanon
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AUG - SEPT 2012
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