King Abdullah Port turns the tide to resolve global supply chain crisis

Special The Kingdom’s overall ports today handle around 20 percent of the region’s transshipment market, but authorities aim to raise this to 50 percent by 2030. (SPA/Supplied)
The Kingdom’s overall ports today handle around 20 percent of the region’s transshipment market, but authorities aim to raise this to 50 percent by 2030. (SPA/Supplied)
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Updated 02 August 2022

King Abdullah Port turns the tide to resolve global supply chain crisis

King Abdullah Port turns the tide to resolve global supply chain crisis
  • Our exceptional crane density helped us remain one of the most efficient ports: CEO
  • King Abdullah Port is only 15 minutes from the anchorage, allowing easy access to the berths. This, together with our exceptional crane density, helped us remain one of the most efficient ports with remarkable growth in volumes

JEDDAH: As global supply chain companies are finding ways to tackle the worst maritime congestions, the world’s most efficient port is emerging as a safe harbor to unclog the worldwide logistics pressures.

King Abdullah Port recently reached a milestone of handling 15 million twenty-foot-equivalent in a record time of under nine years since its container terminal operations began. The milestone follows a 31 percent rise in container throughput in 2021.

 

“We attribute these to our state-of-the-art infrastructure and facilities built to global standards, as well as our highly efficient public-private partnership business model,” said Jay New, CEO of KAP, in an exclusive interview with Arab News.

FASTFACTS

• Established in 2010, KAP is the first privately owned and operated port in the Middle East and is the flagship project of Ports Development Co.

• PDC is a joint venture between Emaar Economic City and Huta Marine Works Ltd — two of the largest infrastructure developers in the Middle East.

• KAP topped the most efficient container ports among 443 ports in the world on the 2021’s Container Port Performance Index, according to a report.

Established in 2010, KAP is the first privately owned and operated port in the Middle East and is the flagship project of Ports Development Co.

PDC is a joint venture between Emaar Economic City and Huta Marine Works Ltd. — two of the largest infrastructure developers in the Middle East.

“PDC’s decision to introduce this concept did not come easy as it was challenging to convince stakeholders, many of whom were unfamiliar with this business model. The process of simultaneously developing and operating was equally demanding,” said New.

KAP topped the most efficient container ports among 443 ports in the world on the 2021’s Container Port Performance Index, according to a report published by The World Bank and S&P Global Market Intelligence.

“King Abdullah Port is only 15 minutes from the anchorage, allowing easy and fast access to the berths. This, together with our exceptional crane density, helped us remain one of the fastest-growing and most efficient ports with remarkable growth in volumes,” said the CEO.

Surviving the pandemic

The port achieved the feat despite the COVID-19 pandemic taking its toll on maritime traffic in 2021, including global supply chain disruptions, high freight rates and inconsistent trade patterns.

“We at King Abdullah Port take great pride in the work we have done to revitalize the logistics sector and maritime trade throughout the global supply chain disruptions of the pandemic and post-pandemic periods,” said New.




CEO Jay New

The CEO attributed the success of these efforts to the enhanced operational readiness of the port’s stations and terminals, which were equipped during the pandemic to receive a wide variety of food, medication and medical equipment.

We at King Abdullah Port take great pride in the work we have done to revitalize the logistics sector and maritime trade throughout the global supply chain disruptions of the pandemic and post-pandemic periods.

Jay New, CEO of King Abdullah Port

In 2020, the port achieved an import growth rate of 16 percent, where pharmaceutical and medical supply imports increased by a whopping 72 percent.

“During this period, we devised and implemented innovative ways to keep working around the clock without disruption,” he added.

Partnership with Maersk

In June 2021, KAP partnered with Maersk, a global logistics and supply chain services provider, to launch the Maersk Integrated Logistics Hub inside the port.

The move aims to cover a critical logistical requirement of exporters who already have access to Maersk’s solutions, such as landside cargo movement, customs clearance, and ocean logistics, thus ensuring a truly integrated logistics offering.

The hub serves as a focal supply chain solution for the Kingdom’s petrochemical exporters, facilitating the storage of export cargo and enabling pallet handling, stuffing, and shuttling.

“The establishment of the hub is part of a major initiative aimed at increasing the performance efficiencies and competitiveness of Saudi Arabia’s logistics sector,” said the CEO.

Technological prowess

New believes that automation and digitization are increasingly critical for a thriving port industry.

“We believe the new investments must focus on harnessing new technologies’ potential to improve service offerings and efficiency. We have continued to develop our procedural and operational efficiencies through digital transformation,” New added.

The port’s personal communications service developed by IBM boasts a unified single window gateway, document conversion services, real-time visibility, alert notification, and advanced analytics, providing users with ready access to a range of important information on vessels and cargo.

Its Smart Gate System was integrated with the PCS to create a more efficient interface between gate operations and government authorities such as the Zakat, Tax and Customs Authority and the Border Guard.

“This extensive automation has vastly improved operational efficiencies and turnaround times,” he said.

Global supply chain designs

The Kingdom’s overall ports handle today around 20 percent of the region’s transshipment market, but authorities aim to raise this to 50 percent by 2030.

With four new Special Economic Zones being set up in the Kingdom, the national ports benefit from the resulting surge in foreign direct investment, business activity and trade flows in logistics, manufacturing, financial services, technology, etc.

New believes that KAP is competitively positioned in the industry due to several factors, such as its location on the Red Sea on the main East-West trade route, which accounts for 13 percent of all global trade.

The port forms a part of the King Abdullah Economic City, which gives the port another strategic advantage.

“Our proximity to the Industrial Valley, part of KAEC allows companies to have a base near the port and gives them direct access to extensive external transportation facilities, including an ultramodern highway network and the new Haramain High-Speed Railway,” he said.

The city recently welcomed Lucid’s first electric vehicle plant outside the US, which will produce up to 150,000 electric vehicles annually.

KAP also offers access to the forthcoming Saudi Landbridge Project, which will directly connect Riyadh, Dammam and the rest of the Gulf Cooperation Council countries.

The project will link the western and eastern parts of the Kingdom and could see costs spiral to around SR100 billion ($26 billion) once all factors are accounted for.

The contracts will be signed within a year, and the project implementation will take five to seven years, said the Minister of Transport and Logistics Saleh Al-Jasser.

KAP launched a new international in-transit cargo service last May, supported by inland transportation between Saudi Arabia and the GCC countries, reducing the lead time from 13-16 days by sea to four to six days by land.

The move features a three-hour streamlined the process from the arrival of cargo at the port to its dispatch to the final destination, which will also reduce storage costs, according to a statement issued by KAP.

“With state-of-the-art processing facilities, one of the world’s deepest water berths and a fully-integrated personal communications service, KAP is well on its way to meeting its goal of becoming one of the top ports worldwide,” said New.


Saudi Arabian Mining Co. emerges as TASI’s 5th-best performer

Saudi Arabian Mining Co. emerges as TASI’s 5th-best performer
Updated 10 August 2022

Saudi Arabian Mining Co. emerges as TASI’s 5th-best performer

Saudi Arabian Mining Co. emerges as TASI’s 5th-best performer
  • Analysts expect Ma’aden to maintain its solid performance throughout 2022, owing to its expansion plans

RIYADH: Saudi Arabian Mining Co., known as Ma’aden, ranked fifth among the top share price gainers this year on the Saudi stock index TASI buoyed by strong results and a thriving mineral sector.

Ma’aden’s share price in 2022 opened at SR39.25 ($10.5) and climbed to SR59 on Aug. 4, surging 53 percent.

A booming mineral industry fueled this rise in Saudi Arabia as, in recent years, the Kingdom has shifted its focus toward discovering and extracting minerals and metals to support its mining industry.

“There is over $3-trillion worth of minerals to be exploited in the Kingdom, which opens huge opportunities for minerals companies,” said Peter Leon, a partner in Johannesburg-based law firm Herbert Smith Freehills.

Leon advised the Kingdom’s Ministry of Industry and Mineral Resources on drafting its new mining law.

Khalid Almudaifer, vice minister of MIMR, told Arab News that the ministry had established the mining sector’s infrastructure, allowing the Kingdom to leapfrog in both mining and sustainable mining.

FASTFACTS

• The company’s share price in 2022 opened at SR39.25 ($10.5) and climbed to SR59 on Aug. 4, surging 53 percent.

• Ma’aden reported a 185 percent surge in profit during the first quarter of 2022, hitting SR2.17 billion.

• The mining company has a market capitalization of over SR100 billion.

As the Kingdom revealed that it could be sitting on untapped mineral deposits worth $1.3 trillion, Almudaifer added that the $1.3 trillion estimate of untapped minerals is only a starting point and that underground minerals are likely worth even more.

In March, the state-owned firm announced its plans to increase production capacity and invest in exploration to tap into $1.3 trillion mineral reserves, a reason economist Ali Alhazmi believes that made Ma’aden shares lucrative, further leading to high performance.

Speaking to Arab News, Alhazmi explained that one of the reasons could be attributed to Ma’aden turning into probability last year, reaching SR5.2 billion, compared to SR280 million in losses in 2020.

The other reason could relate to its plan to double its capital by distributing three shares to shareholders, which has attracted investors to buy Ma’aden shares.

According to Abdullah AlRebdi, CEO of Rassanah Capital, the beginning of the third line of its ammonia production also helped the company’s fortune, especially when there was a considerable shortage of raw material for fertilizer. It is worth mentioning that the ammonia plant expansion is set to add over 1 million tons of ammonia production to reach 3.3 million tons, making Ma’aden one of the largest ammonia producers east of the Suez Canal.

Ma’aden reported a 185 percent surge in profit during the first quarter of 2022, hitting SR2.17 billion, amid a jump in commodity prices.

Analysts expect Ma’aden to maintain its solid performance throughout 2022, owing to its expansion plans and gold mining projects in Mansoura and Masarrah.

“By the end of 2022, Ma’aden will achieve SR9 billion in profit, a growth of 50 percent from 2021,” Alhazmi predicted.

As one of the fastest-growing mining companies worldwide, Ma’aden has a market capitalization of over SR100 billion and is one of the Kingdom’s 10 most prominent players.


Oil up, rebounds on renewed gasoline demand, weak dollar

Oil up, rebounds on renewed gasoline demand, weak dollar
Updated 10 August 2022

Oil up, rebounds on renewed gasoline demand, weak dollar

Oil up, rebounds on renewed gasoline demand, weak dollar
  • US crude inventories up more than 5 million barrels
  • Transneft restarts oil flows via Druzhba

NEW YORK: Oil prices rose on Wednesday, rebounding from losses early in the session on lift from encouraging figures on US gasoline demand and as a lower-than-expected US inflation figure drove investors into riskier assets.

Brent crude futures rose 68 cents, or 0.7 percent, to $96.99 a barrel as of 12:46 p.m. EST (1746 GMT). US West Texas Intermediate crude futures gained 83 cents, or 0.9 percent, to $91.33.

US stocks

US crude oil stocks rose by 5.5 million barrels in the most recent week, the US Energy Information Administration said, more than the expected increase of 73,000 barrels. However, US gasoline stocks fell sharply as implied demand rose after weeks of lackluster activity during what is supposed to be peak summer driving season.

“Everyone has been very much focused on potential demand destruction, so seeing implied demand showing an outsized rebound for last week has probably given some comfort to those really concerned about that,” said Matt Smith, lead oil analyst, Americas, for Kpler.

Gasoline product supplied rose in the most recent week to 9.1 million bpd, though that figure still shows demand down 6 percent over the past four weeks compared with the year-ago period.

US oil refiners and pipeline operators expect strong energy consumption for the second half of 2022, a Reuters review of company earnings calls showed.

US consumer prices were unchanged in July due to a sharp drop in the cost of gasoline, delivering the first notable sign of relief for Americans who have watched inflation climb over the past two years.

That contributed to a rise in risk assets including equities, while the US dollar fell more than 1 percent against a basket of currencies. With most worldwide oil sales transacted in dollars, a weakening greenback is supportive for oil. However, crude's gains were modest.

Druzhba pipeline

The market earlier slipped as flows on the Russia-to-Europe Druzhba pipeline resumed, alleviating fears of another squeeze on world energy supply by Moscow.

Russian state oil pipeline monopoly Transneft restarted oil flows via the southern leg of the Druzhba oil pipeline, RIA news agency said.

Ukraine had suspended Russian oil pipeline flows to parts of central Europe since early this month because Western sanctions prevented it from receiving transit fees from Moscow, Transneft said on Tuesday.


Insilico raises $35m in Series-D round led by Aramco-backed Prosperity7 Ventures

Insilico raises $35m in Series-D round led by Aramco-backed Prosperity7 Ventures
Updated 10 August 2022

Insilico raises $35m in Series-D round led by Aramco-backed Prosperity7 Ventures

Insilico raises $35m in Series-D round led by Aramco-backed Prosperity7 Ventures

RIYADH: US-based Insilico Medicine has raised an additional $35 million in a Series D funding round led by Aramco-backed Prosperity7 Ventures.

According to FierceBiotech, with this new round the total Series D financing has reached $95 million.

The funds will allow the company to expand its artificial intelligence platform into other areas such as sustainable chemistry, green energy and agriculture.

The financing brought in Prosperity7 Ventures as a new investor.


Emirates airline invests over $2bn to boost customer experience 

Emirates airline invests over $2bn to boost customer experience 
Updated 10 August 2022

Emirates airline invests over $2bn to boost customer experience 

Emirates airline invests over $2bn to boost customer experience 

RIYADH: Dubai-based Emirates airline is investing over $2 billion to boost its inflight customer experience, according to a statement. 

The investment includes a program to retrofit over 120 aircraft with the latest interiors, in addition to an array of other service improvements across all cabins starting in 2022.

“While others respond to industry pressures with cost cuts, Emirates is flying against the grain and investing to deliver ever better experiences to our customers,” President Tim Clark said.

“Through the pandemic we’ve continued to launch new services and initiatives to ensure our customers travel with the assurance and ease, including digital initiatives to improve customer experiences on the ground,” he added. 

The airline’s latest initiatives include upgraded meal choices, new vegan menu, a “cinema in the sky” experience, cabin interior upgrades and sustainable choices. 


EU ban on Russian coal enters into force

EU ban on Russian coal enters into force
Updated 10 August 2022

EU ban on Russian coal enters into force

EU ban on Russian coal enters into force

BRUSSELS: The EU’s total ban on coal imports from Russia comes into force from midnight Wednesday, at a time the bloc is grappling with soaring energy costs following Moscow’s invasion of Ukraine.

Leaders of the EU’s 27 countries agreed the embargo in April in their first move targeting Russia’s key energy exports over its war on its pro-Western neighbor.

The measure was subject to a 120-day grace period before full implementation, to allow pre-existing contracts to be fulfilled.

The EU up to last year imported some 45 percent of its coal — worth an estimated €4 billion ($4.1 billion) — from Russia.

Overall, the bloc slashed its consumption of the polluting fossil fuel from 1.2 billion tons to 427 million tonnes between 1990 and 2020 as it pushed to hit climate goals.

But the closure of many mines across the continent led to an increase in Europe’s dependence on imports.

Some countries including Germany and Poland that used it to produce electricity were particularly reliant on Moscow.

In the face of cuts to Russian gas deliveries in recent months, EU members such as Germany, Austria, the Netherlands and Italy have stepped up their use of coal-fired power plants.

Adding to the energy crunch, an EU plan to cut natural gas use by 15 percent in the face of rocketing prices came into force earlier this week.

During the first five months of 2022, the amount of electricity Germany produces from coal rose by 20 percent, according to energy analyst Rystad.

The embargo on Russia has pushed the EU to step up imports from other sources, including the US, Australia, South Africa and Indonesia.

But ending imports of Russian coal has already proved complicated for traditional mining nation Poland, which imported roughly 10 million tons from Moscow each year.

Its government imposed a total ban on Russian coal imports in mid-April, causing severe shortages and a surge in prices.

The cost of a ton of coal in Poland rose around fourfold from a year ago, leading to protests from the three million Poles still using it to heat their homes.