Riyadh industries gaining from rail cargo business
Riyadh industries gaining from rail cargo business
Compared to road transportation, rail transportation of container cargo is the cheapest and most economical. Many industries in Riyadh are taking advantage of this to export as it reduces their cost and provides a safe passage of cargo inside containers, Al-Suweidan told Arab News in an exclusive interview.
Coupled with this, the Middle East economy is one of the strongest economies in the world and will continue to rise in the future. This will definitely have a cumulative effect in the shipping and transportation industry in the region in general and the Kingdom in particular, he said.
“The global container shipping industry will definitely rise in 2014 and we expect a huge volume of containers arriving at Riyadh Dry Port in the coming year. With the new port starting at Dammam next year, RDP is capable of receiving containers from both King Abdulaziz Sea Port and Saudi Global Ports (Dammam),” he added.
Al-Suweidan speaks on key issues in the following interview:
Q: BAAS International Group has taken a number of innovative and pioneering steps to help elevate Riyadh Dry Port on the global map. Can you spell out the group’s plans for future?
A: Riyadh Dry Port (RDP) was started in 1982. BAAS International Group became the contractor for Saudi Railways RDP in March 2012. Since the beginning of April 2012, BAAS Ports Services (BPS) has taken a series of pioneering steps in elevating RDP as one of the top dry ports in the Middle East. Primarily in 2014, the whole yard will be reconstructed with newer roads and newer warehouses. This poses a primary challenge as we need to sustain the current growth while developing the yard to international standards. Newer machinery — RTGs — rubber tired gantry cranes and terminal tractors will be commissioned to sustain the growth of the container movement at RDP. To facilitate an increase in volume of export containers BIG has started its own trucking company BAAS Express. A website riyadhdryport.com has been launched and online container tracking feature has been enabled. Consignees, shipping lines, agents and brokers can now check for the latest and most updated position of the container in the website. RDP is the first port in the Kingdom to implement and Go Live with NAVIS N4 2.3 terminal operating system along with the SAP. RDP has the unique distinction of being the fifth port in the world to implement NAVIS N4 2.3 along with SAP and Psilog- Altai Wi-Fi devices. RDP is ISO 9001:2008 certified port in Saudi Arabia. RDP has the shortest dwell time in terms of container delivery among all other ports in the Kingdom. The truck turnaround time is only 11-12 minutes at RDP. Most of the operational activities are automated and in May 2013 a record of 26,000 containers were delivered in tandem with custom inspection and billing processes. This was for the first time in 31 years that such record figure had ever been achieved. We have achieved a growth of 15 percent as compared to 2011-2012. Currently, RDP handles around 500,000 TEU’s and we aim to hit 1 Million TEU’s by 2016.
Q: What are the opportunities and challenges seen in Riyadh Dry Port’s shipping and logistics industry?
A: Saudi Arabia is very well connected to Europe, Africa and Americas, and on the other hand it is connected to Asia. Riyadh being one of the largest economies in Middle East is a favorable destination to many prospective businesses. RDP will definitely play a pivotal role in up scaling the economy of Riyadh. The volume of containers at RDP is expected to be doubled with a new port — Saudi Global Ports Container Terminal — coming up in Dammam by mid-2014. The new port will be linked with RDP via Saudi Railways Network. New Export Section at RDP will facilitate traders and exporters in Riyadh to export products from RDP to the outside world. Sustaining the current growth while handling all key new developments will be a major challenge for RDP and for shipping and logistics industry. Most of the import containers at RDP arrive from Asia and the emerging markets while there has been a drop in imports from Europe and Americas since they are still recovering from the recession of 2008. We plan to reach out to the global players of Europe and America’s trading and commerce industry, and encourage them to do more business with Saudi Arabia.
Q: What are Riyadh Dry Port’s competitive advantages?
A: Cargo transportation between Dammam and Riyadh via Saudi Railways Wagon Trains is the most convenient, safest and cost-effective method of transporting containers. RDP is easily scalable and can accommodate higher volume of containers than it is currently done. Most of the consignees at RDP are from different verticals of businesses, including manufacturing, steel, pharmaceutical, engineering, logistics and chemical among many others. These industries are the driving force for improving the economy in Riyadh, and Baas Ports Services is committed to helping them achieve higher productivity increasing their revenues. A substantial increase in the number of inflow containers for these industries has motivated Baas Ports Services in maintaining higher standards of sustainability to ensure that its consignees are delighted. Since RDP is the only major dry port in Saudi Arabia, the onus to set an example to other upcoming dry ports is immense. BPS’ skilled management team focuses on strategy instead of administration. We maintain higher standards of service to all our stakeholders and believe in providing efficient, fast, reliable and seamless connectivity between our consignees, Riyadh Customs, shipping brokers and agents.
Q: What is the progress made so far in automation of operational activities?
A: Operations made a series of progressive steps to ensure a smooth movement of containers inside the dry port. Primarily the whole yard was segmented into different locations, namely storage, inspection and delivery. Each location was in turn divided into rows and columns with specific number. Hence a container could be easily located using the specific numbers. RDP also has the unique distinction of implementing Psilog-Altai wireless devices, namely radio data terminals, vehicle mounted terminals and mobile computers. These devices are in turn connected to NAVIS terminal operating system. Hence, when a container is moved, its updated location is automatically recorded in the system. The locations are recorded by tally clerks using RDT’s, and movements are recorded by operators using mobile computers and vehicle mounted terminals. So, at any point of time the most recent location of the container is traced. This type of technology has never been implemented at RDP and this is the first time that this technology has been started. This automation also helps in reducing the number of trips required by outside trucks to collect their specific containers. We operate in two shifts and each shift has specific job duties to perform, which in turn is reflected in their individual KPI’s at the end of every month. BPS has the unique distinction of being the only port in the Kingdom to have the shortest dwell time. From the time the container arrives in RDP, it only takes 4-5 days for the container to be delivered after custom inspection processes. Also the truck turnaround time is the shortest among all other ports. Consignee trucks only take 11-12 minutes to carry their delivery containers out after passing through X-ray machines. There is close competitiveness between employees to outperform each other.
Q: The global economy is recovering from a slump and the shipping industry is limping back to its glorious days. What is the outlook in 2014 for global container shipping industry and terminal industry?
A: The global container shipping industry will definitely rise in 2014 and we expect a huge volume of containers arriving at Riyadh Dry Port in the coming year. With the new port starting at Dammam next year, RDP is capable of receiving containers from both King Abdulaziz Sea Port and Saudi Global Ports (Dammam). Also in 2014, RDP started its export section and already has a huge number of containers that are being exported outside the Kingdom. Compared to road and rail transportation, rail transportation of cargo is the cheapest and most economical. Many industries in Riyadh are taking advantage of this to export as it reduces their cost and provides a safe passage of cargo inside containers. Coupled with this, the Middle East economy is one of the strongest economies in the world and will continue to rise in the future. This will definitely have a cumulative effect in the shipping and transportation industry. Saudi Arabia holds a vital position in the Middle East region in terms of cargo movement via containers and it continues to grow.
Q: What has been the impact of the Kingdom’s Nitaqat program on BIG’s operations and future plans?
A: BIG has taken numerous preventive steps to ensure that the project is not affected by the Nitaqat program. A large number of Saudi nationals were recruited in early 2013 and continue to occupy key positions in this project. More Saudi nationals are being recruited frequently. BIG is proud to be associated with the chamber of commerce in the Eastern Region and continues to play a vital role in providing more job opportunities for qualified Saudi nationals.
Q: What are the career and training opportunities available for young Saudis?
A: BIG conducts regular interviews for qualified Saudi nationals to be part of the ever growing Riyadh Dry Port project. Once recruited, each employee undergoes a specific orientation and training program pertaining to his particular department. The Operations Training Team trains the employees concerning logistics movements of containers. IT employees get trained in planning and equipment controlling. Technical department train the employees related to machinery, namely straddle carriers and reach stackers. Once the probationary period has been completed and assessment done, every employee has to work according to the daily targets set forth by the management. There are numerous opportunities for all qualified and able Saudi nationals and BIG welcomes them to be part of Riyadh Dry Port’s growth contributing to the economy of Saudi Arabia.
UAE regulators ask corporates to declare exposure to Abraaj
- Air Arabia admits $336 million exposure to Abraaj funds.
- Abraaj sells its Latam, Sub-Saharan Africa, North Africa and Turkey Funds to Colony Capital.
DUBAI: The United Arab Emirates’ top securities regulator has asked UAE-listed companies to declare their exposure to Dubai-based private equity firm Abraaj, which filed for provisional liquidation last week.
The Securities & Commodities Authority sent a letter earlier this week and companies had until Thursday to submit their responses, Obaid Al-Zaabi, chief executive of the regulator, told Reuters.
Air Arabia, a Dubai-listed low-cost carrier, said this week that it had a $336 million exposure to Abraaj, which is the Middle East’s biggest private equity firm. Shares in the airline plunged because of these links.
Al-Zaabi said some companies in the UAE had exposure to Abraaj, without naming them.
A court in the Cayman Islands, where Abraaj Holdings is registered, ordered this week that PwC be appointed as provisional liquidators of the company and Deloitte as liquidators of Abraaj Investment Management Ltd.
Abraaj said that the latest restructuring agreement has received in-principle regulatory approval and is expected to close upon approval from the Cayman Islands court and other customary consents.
On Thursday, the Dubai Financial Services Authority (DFSA), which is the regulator of the Dubai International Financial Center (DIFC), said it would discuss “various matters” with the liquidators and “will continue to work toward safeguarding the interests of investors.”
The DFSA is involved because Abraaj has an entity regulated in DIFC.
Abraaj Group agreed to sell its Latin America, Sub-Saharan Africa, North Africa and Turkey Funds management business to US investment management firm Colony Capital Inc, the companies said on Thursday.
The sale agreement comes after months of turmoil at Abraaj in the wake of its dispute with four of its investors, including the Bill & Melinda Gates Foundation and International Finance Corp. (IFC), over the use of their money in a $1 billion health care fund. The group has denied it misused the funds.
The sale is part of a provisional liquidation and restructuring as set out in a court order. Financial terms of the deal were not disclosed.
Colony Capital has also agreed to oversee, on an interim basis, other Abraaj group funds that are not being acquired so that the group and all its stakeholders have a “comprehensive global solution in place,” the companies said.
The other group funds include the $1 billion health care fund, and some legacy funds of the private equity group.
Sources told Reuters earlier that US buyout firm TPG was in talks with investors in Abraaj’s health care fund to take over management of the assets of the $1 billion fund.
The K-Electric asset, which is being sold in Pakistan and is owned by Abraaj Holdings, is also not part of the transaction.
Colony’s deal comes after other investors such as Cerberus Capital Management had also made offers for the Abraaj business before it filed for provisional liquidation in the Cayman Islands.
A unit of Abu Dhabi Financial Group earlier this week made a conditional offer to buy Abraaj’s management interest in all of its limited partnerships for $50 million, according to a document seen by Reuters.
Since Abraaj’s row with some investors became public early this year, it split its investment management business and holding company, while its founder Arif Naqvi stepped aside from the day-to-day running of its private equity fund unit and the firm halted its investment activities.
Tom Barrack, executive chairman of Colony Capital, said that he hoped that the transaction would enable the process of rebuilding on all sides and also bring an end to the speculation that has swirled around Abraaj over the past months.