Reinsurers set to bear brunt of costs for Suez Canal grounding

Reinsurers set to bear brunt of costs for Suez Canal grounding
A ship sails through Egypt’s Suez Canal. Suez Canal Authority’s chairman said last month damages caused by Ever Given blockage could reach around $1 billion. (Reuters)
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Updated 08 April 2021

Reinsurers set to bear brunt of costs for Suez Canal grounding

Reinsurers set to bear brunt of costs for Suez Canal grounding
  • Ships typically have protection and indemnity insurance covering third party liability claims including environmental damage and injury
  • Suez Canal Authority chairman said losses and damages from Ever Given blockage could reach around $1 billion

LONDON — Reinsurers are set to foot most of the bill for the grounding of the ship that halted traffic in the Suez Canal, industry sources said, with payouts expected to run into hundreds of millions of dollars.
International supply chains were thrown into disarray when the 400 meter (430 yard) Ever Given ran aground in the canal on March 23, with specialist rescue teams taking almost a week to free the vessel.
Around 400 vessels were affected by the canal’s closure, which led to some having to divert around Africa to get supplies to global markets.
Ships typically have protection and indemnity (P&I) insurance, which covers third party liability claims including environmental damage and injury. Separate hull and machinery (H&M) policies cover vessels against physical damage.
Alan Mackinnon, chief claims officer with UK Club, the Ever Given’s P&I insurer, said it expected a claim against the ship’s owner from the canal authorities for possible damage to the canal and for loss of revenues, and separately claims for compensation from some of the owners of the delayed ships.
“I expect we will get a claim from the Egyptian authorities quite soon and the claims from the other shipowners will trickle in over the coming months,” Mackinnon told Reuters.
Suez Canal Authority chairman Osama Rabie said last month that losses and damages from the Ever Given blockage could reach around $1 billion, but that the actual amount would be calculated after the investigations, though it was unclear when this would be completed.
The UK Club will cover the first $10 million of P&I losses.
Beyond that, the wider pool of P&I insurers will cover up to $100 million, at which point re-insurers such as Lloyd’s of London step in for up to $2.1 billion of claims. P&I insurers would contribute for part of a further $1 billion of cover.
When asked if claims could reach the upper levels of cover at $2.1 to $3.1 billion, UK Club’s Mackinnon said “we are confident we are not in that territory at all.”
“This is not an existential moment for the P&I sector. It may be a large claim but we are structured to deal with large claims.”
Analysts at DBRS Morningstar said that total insured losses “will remain manageable given the relatively short period of time that the canal was blocked.”
Lloyd’s of London last week said the incident would likely result in a “large loss” for the commercial insurance and reinsurance market of at least $100 million.
Yumi Shinohara, deputy manager of the fleet management department with Japan’s Shoei Kisen, the owner of Ever Given, said it had not received any compensation claims yet.
Container ships of the Ever Given’s size usually have H&M insurance limits of $100-$140 million, brokers say.
An insurance source in Tokyo, who declined to be named, said the three Japanese H&M insurers would pay for salvage costs and any repair fees for the hull. Mitsui Sumitomo Insurance, the main Japanese hull insurer for the vessel, declined to comment.
Other insurance sources said the Japanese hull underwriters would also spread their exposure with re-insurers.


Egypt’s non-oil exports rise to $7.4bn in Q1 2021

Egypt’s non-oil exports rise to $7.4bn in Q1 2021
Updated 4 min 11 sec ago

Egypt’s non-oil exports rise to $7.4bn in Q1 2021

Egypt’s non-oil exports rise to $7.4bn in Q1 2021
  • Trade deficit also decreased by 1 percent to $9.5 billion in the same period

CAIRO: Egypt’s non-oil exports rose 7.2 percent in the first quarter of 2021 compared to the same period last year, reaching $7.4 billion, said Trade and Industry Minister Nevin Jameh.

“This tangible increase came despite the current circumstances related to the coronavirus crisis that the whole world is suffering from, thanks to the efforts made by the government to support the production and export sectors during the crisis,” she added.

Egyptian imports saw a slight increase in the first quarter of 2021 to $16.9 billion, compared to $16.67 billion in the same period last year.

Jameh said these positive indicators contributed to achieving a 1 percent decrease in the trade balance deficit to $9.5 billion, compared to $9.6 billion in the same period last year.

Ismail Jaber, head of the General Organization for Export and Import Control, said the chemical products and fertilizer sectors dominated Egypt’s export list in the first quarter of 2021.

Exports of chemical products and fertilizers amounted to $1.5 billion, building materials $1.3 billion, food industries $965 million, and engineering and electronic goods $739 million.

FASTFACTS

• Chemical products and fertilizer sectors dominated Egypt’s export list in the first quarter of 2021.

• Egypt’s top export destinations were China ($3.1 billion), the US ($1.49 billion), Germany ($970 million), Russia ($855 million) and Italy ($689 million).

• These five countries accounted for 42.1 percent of Egyptian imports.

Jaber said Egypt’s top export destinations were China ($3.1 billion), the US ($1.49 billion), Germany ($970 million), Russia ($855 million) and Italy ($689 million). These five countries, he added, accounted for 42.1 percent of Egyptian imports.

Egypt is expecting economic growth of 5.4 percent in the next fiscal year 2021/2022, up from 3.3 percent expected in 2020/2021.

The country recently approved its budget, which aims to reduce the country’s deficit and focuses on pushing social protection efforts, improving citizens’ standard of living, increasing wage allocations and rewards for workers, and financing grant incentives and transportation allowances for workers transferred to the New Administrative Capital.

The proceeds of budget revenues are likely to reach about EGP1.3 trillion  ($80 billion), according to estimates for the next fiscal year 2020/2021, compared to expected revenues of EGP1.117 trillion during the current fiscal year.

The estimates reflect an annual growth in revenues of 16.4 percent, achieved by expanding the tax base, activating electronic payments, expanding the use of modern methods of risk management, collecting government revenues and working to increase linking the proceeds to economic activity.


From lizards to water, eco-bumps snag Tesla Berlin plant

From lizards to water, eco-bumps snag Tesla Berlin plant
Updated 12 min 22 sec ago

From lizards to water, eco-bumps snag Tesla Berlin plant

From lizards to water, eco-bumps snag Tesla Berlin plant
  • The extra demand could place a huge burden on a region already affected by water shortages

BERLIN: In the green forest outside Berlin, a battle is playing out between electric carmaker Tesla and environmental campaigners who want to stop its planned “gigafactory.”

“When I saw on TV that the Tesla factory was going to be built here, I could not believe it,” said Steffen Schorch.

The 60-year-old from Erkner village in the Berlin commuter belt has become one of the faces of the fight against the US auto giant’s first European factory, due to open in the Brandenburg region near Berlin in July. “Tesla needs far too much water, and the region does not have this water,” said the environmental activist, a local representative of the Nabu ecologist campaign group.

Announced in November 2019, Tesla’s gigafactory project was warmly welcomed as an endorsement of the “Made in Germany” quality mark — but was immediately met with opposition from local residents.

Demonstrations, legal action, open letters — residents have done everything in their power to delay the project, supported by powerful environmental campaign groups Nabu and Gruene Liga.

Tesla was forced to temporarily suspend forest clearing last year after campaigners won an injunction over threats to the habitats of resident lizards and snakes during their winter slumber.

And now they have focused their attention on water consumption — which could reach up to 3.6 million cubic meters a year, or around 30 percent of the region’s available supply, according to the ZDF public broadcaster.

The extra demand could place a huge burden on a region already affected by water shortages and hit by summer droughts for the past three years.

Local residents and environmentalists are also concerned about the impact on the wetlands, an important source of biodiversity in the region. “The water situation is bad, and will get worse,” Heiko Baschin, a spokesman for the neighborhood association IG Freienbrink, told AFP.

Brandenburg’s Environment Minister Axel Vogel sought to play down the issue, saying in March that “capacity has not been exceeded for now.”

But the authorities admit that “the impact of droughts is significant” and have set up a working group to examine the issue in the long term.

The gigafactory is set to sprawl over 300 hectares — equivalent to approximately 560 football fields — southwest of the German capital.

Tesla is aiming to produce 500,000 electric vehicles a year at the plant, which will also be home to “the largest battery factory in the world,” according to group boss Elon Musk.


British Muslim billionaire brothers buy healthy fast food chain

British Muslim billionaire brothers buy healthy fast food chain
Updated 18 April 2021

British Muslim billionaire brothers buy healthy fast food chain

British Muslim billionaire brothers buy healthy fast food chain
  • The deal includes 42 company-owned restaurants, as well as 29 franchise sites
  • The brothers said the firm was a “fantastic brand we have long admired”

LONDON: Britain’s billionaire Issa brothers have bought healthy fast food chain Leon.
More than 70 Leon restaurants across the UK and Europe have been sold for £100 million ($138 million) to EG Group, the petrol station business founded by Mohsin and Zuber Issa, the Financial Times reported.
The deal includes 42 company-owned restaurants, as well as 29 franchise sites, which are mainly found in airports and train stations across the UK and some European countries.
The brothers said the firm, which has been hit badly by the coronavirus pandemic, was a “fantastic brand we have long admired.”
Reports said the group has committed to keeping Leon’s management team and staff the same.
“We have tried hard, done some good things, made a healthy amount of mistakes, and built a business that quite a few people are kind enough to say that they love,” John Vincent, who co-founded Leon in 2004, said.
Speaking about the brothers, he said: “They have been enthusiastic customers of Leon, going out of their way to eat here whenever they visit London.”
“They are decent, hard-working business people who are committed to sustaining and further strengthening the values and culture that we have built.”
In October 2020, the Issa brothers and private equity firm TDR Capital, agreed to buy a majority stake in Asda from Walmart.
The brothers and TDR own EG Group, a global convenience and petrol station retailer, which trades from more than 6,000 sites across 10 countries.


Dubai completes first phase of e-commerce free zone

Dubai completes first phase of e-commerce free zone
Updated 18 April 2021

Dubai completes first phase of e-commerce free zone

Dubai completes first phase of e-commerce free zone
  • It includes 470,000 square feet of real estate
  • The e-commerce sector in the Gulf is booming with the forced closure of bricks and mortar shops during the pandemic giving the industry a further boost

DUBAI: The first phase of a new Dubai fee zone dedicated to e-commerce has been completed.
It includes 470,000 square feet of real estate.
The 3.2 billion dirhams ($871 million) Dubai CommerCity project also includes 145,000 square feet of e-commerce logistics units and warehouses in a cluster managed and operated by Hellmann Worldwide Logistics and DHL.
It has leased 51 percent of the logistics warehouses to companies operating across IT, fashion, jewelry and electronics.
“The launch of Dubai CommerCity aims to lead the future of e-commerce business in the region,” said Sheikh Ahmed Bin Saeed Al-Maktoum, chairman of the Dubai Airport Freezone Authority. “The project has been thoroughly studied not only to provide foundational solutions, but also to stimulate and support business and prosperity at a time when the sector is going through peak growth.”
The e-commerce sector in the Gulf is booming with the forced closure of bricks and mortar shops during the pandemic giving the industry a further boost.
The free zone provides opportunities for manufacturers, distributors and global e-retailers while offering tax and investment incentives, it said.
It is divided into three main clusters — Business, Logistics and Social.


Emirates NBD, Etihad Credit Insurance ink deal to ease trade finance access for UAE businesses

Emirates NBD, Etihad Credit Insurance ink deal to ease trade finance access for UAE businesses
Updated 18 April 2021

Emirates NBD, Etihad Credit Insurance ink deal to ease trade finance access for UAE businesses

Emirates NBD, Etihad Credit Insurance ink deal to ease trade finance access for UAE businesses
  • The deal will help the UAE lender to reduce any risks that may be associated with credit facilities

DUBAI: UAE export credit company, Etihad Credit Insurance (ECI), has signed an agreement with Emirates NBD to improve liquidity of UAE exporters by easing their access to credit facilities.
The deal will help the UAE lender to reduce any risks that may be associated with credit facilities, so businesses can pursue export and expansion opportunities, according to a joint statement.
More than 80 per cent of world trade relies on trade finance, ECI’s chief Massimo Falcioni said, and the agreement will allow Emirates NBD to offer innovative financial solutions to their clients.
Governments in the Gulf have been investing in strengthening local businesses as a strategy to recover from the COVID-19 pandemic, and to gradually veer away from oil-dependence.