UAE GDP grows 3.4% in Q1, driven by non-oil sector

The non-oil sector played a significant role in this expansion, with a 4 percent increase contributing substantially to the overall economic performance. Reuters/File
The non-oil sector played a significant role in this expansion, with a 4 percent increase contributing substantially to the overall economic performance. Reuters/File
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Updated 09 September 2024
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UAE GDP grows 3.4% in Q1, driven by non-oil sector

UAE GDP grows 3.4% in Q1, driven by non-oil sector

RIYADH: The UAE’s gross domestic product reached 430 billion dirhams ($117 billion) in the first quarter of 2024, marking a 3.4 percent year-on-year growth.

Economy Minister Abdulla Al-Marri highlighted that the preliminary estimates from the Federal Competitiveness and Statistics Center emphasize the vitality of the UAE economy and its ability to sustain growth, as reported by Emirates News Agency, also known as WAM.

The non-oil sector played a significant role in this expansion, with a 4 percent increase contributing substantially to the overall economic performance.

Al-Marri attributed this success to the UAE’s adoption of an innovative economic model, guided by the nation’s leadership. “The UAE has embraced an innovative economic model that aligns with its future vision, supported by effective national strategies, global openness, and a focus on flexibility and innovation,” Al-Marri stated, according to WAM.

These results align with the UAE’s long-term vision, We the UAE 2031, which aims to elevate the national GDP to 3 trillion dirhams within the next decade. This commitment to sustainable growth is reflected in the performance of key sectors such as finance, transportation, construction, and tourism.

Hanan Ahli, managing director of the Federal Competitiveness and Statistics Center, noted the substantial contributions of these sectors. “The financial and economic data from Q1 2024 demonstrate the resilience of the UAE’s vital economic sectors,” Ahli said. She added that the UAE’s strong global economic competitiveness is supported by a stable financial system, robust economic fundamentals, and effective policy frameworks.

In the first quarter of 2024, financial and insurance activities emerged as the leading non-oil sector, growing by 7.9 percent, fueled by a 6 percent rise in local credit extended to the private sector. The transportation and storage sector also showed impressive growth, with a 7.3 percent increase, supported by a 14.7 percent rise in passenger traffic through UAE airports, which saw 36.5 million travelers. Additionally, Dubai’s international ports handled 3.7 percent more containers, while Abu Dhabi’s ports experienced a 36 percent increase in cargo volume.

Construction and building activities grew by 6.2 percent, largely due to increased public capital expenditures, totaling 4.8 billion dirhams in the first quarter, compared to the previous year. The restaurant and hotel sector expanded by 4.6 percent, bolstered by an 11 percent rise in international tourists visiting Dubai, which welcomed 5.18 million visitors. Abu Dhabi also experienced strong tourism performance, with increases in hotel occupancy rates and revenue per available room.

In terms of non-oil GDP contributions, trade activities led with a 16.1 percent share, followed by manufacturing at 14.6 percent, and financial and insurance activities at 13.4 percent. Construction and real estate activities contributed 11.8 percent and 7.1 percent, respectively.


Saudi Arabia, Italy to enhance industrial ties during top official’s visit

Saudi Arabia, Italy to enhance industrial ties during top official’s visit
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Saudi Arabia, Italy to enhance industrial ties during top official’s visit

Saudi Arabia, Italy to enhance industrial ties during top official’s visit

JEDDAH: Saudi Arabia and Italy are set to strengthen their industrial and mining ties thanks to a visit by a senior official of the Kingdom to the European country.

Commencing his trip on Oct. 14, Saudi Minister of Industry and Mineral Resources Bandar bin Ibrahim Alkhorayef is set to explore mutual opportunities in key industrial sectors that align with the national strategy for manufacturing development, including the automotive, food, space, and marine industries.

The visit, which will continue until Oct. 16, includes stops in the capital, Rome, and Milan. It also aims to leverage the latest industrial innovation solutions and attract investments into promising sectors in Saudi Arabia, as stated by the Kingdom’s Ministry of Industry and Mineral Resources.

Saudi Arabia’s non-oil exports to Italy amounted to SR2.8 billion ($747 million) in 2023, while total non-oil imports from the European country reached SR21.8 billion during the same year.

The Saudi minister will engage with government officials and leaders in the private sector. He will also visit prominent Italian companies with the aim to facilitate knowledge transfer and smart manufacturing solutions for the Saudi industry while strengthening the economic ties between the two countries.

Alkhorayef is set to meet with Yousef Al-Mimni, vice chairman of the Saudi-Italian Business Council and will engage in discussions with Gilberto Pichetto Fratin, Italy’s minister of environment and energy security.

He is also scheduled to meet with Adolfo Urso, the minister of enterprises, to discuss enhancing industrial cooperation between the two nations.

Alkhorayef will further participate in a multilateral meeting organized by the Italian General Confederation of Industry, known as Confindustria, where he will engage with Barbara Cimmino, the federation’s vice president for export and investment attraction, along with prominent leaders from the Italian private sector.

The minister’s agenda includes a bilateral meeting in Rome with Toni Piech, chairman of Piech Automotive, a leading global automotive manufacturer, and Pierroberto Folgiero, CEO of Fincantieri, a company specialized in shipbuilding and marine products.

In Milan, Alkhorayef will kick off his visit with a tour of the Alessi Center, visit Leonardo’s aerospace division, and hold discussions with the company’s CEO.

The industry minister will also meet with Attilio Fontana, president of Lombardy’s regional government – whom he met in September – to explore ways to enhance bilateral ties in sectors crucial to the Kingdom’s Vision 2030 diversification strategy.

Alkhorayef is also scheduled to meet with Gianluca Di Tondo, CEO of Barilla, a leading food manufacturing company.


Qatar’s inbound visitors see annual surge of 24.5%

Qatar’s inbound visitors see annual surge of 24.5%
Updated 14 October 2024
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Qatar’s inbound visitors see annual surge of 24.5%

Qatar’s inbound visitors see annual surge of 24.5%

RIYADH: Qatar recorded a 24.5 percent annual increase in the total number of inbound visitors in August – reaching 328,000, new figures revealed.

Data from the National Planning Council’s Monthly Statistics bulletin showed that the highest number of visitors was from the Gulf Cooperation Council, representing 41 percent of the total.

Air travel was the most popular method for visiting the country, accounting for 64 percent of all transit options.

The increase aligns with the goal of Qatar’s National Tourism Sector Strategy 2030 to welcome over 6 million annual visitors, positioning the country as the Middle East’s fastest-growing tourist destination.

The bulletin further disclosed a monthly increase in total new driving licenses by 0.6 percent, along with an increase in total new registered vehicles by 11.3 percent, compared to July, to register 8,605 new vehicles.


Top German executive sees Saudi facilities management sector doubling by 2030

Top German executive sees Saudi facilities management sector doubling by 2030
Updated 56 min 39 sec ago
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Top German executive sees Saudi facilities management sector doubling by 2030

Top German executive sees Saudi facilities management sector doubling by 2030

RIYADH: Saudi Arabia’s facilities management market is set to double in value by 2030, a Dussmann Group executive forecast as the company inaugurated its regional headquarters in Riyadh.

Hakan Lanfredi, executive board member of the Berlin-based firm, believes the industry in the Kingdom is currently worth $25 billion, but will see rapid growth by the end of the decade as Saudi Arabia pushes ahead with its numerous Vision 2030 projects.

Dussmann Group moved its regional headquarters to Riyadh from the UAE as it seeks to capitalize on the expansion of the Kingdom’s facilities management sector.

The company’s relocation to the Saudi capital is the latest in a line of firms opting to have their Gulf base in Riyadh, after the Kingdom launched a special initiative to attract multinational businesses.

Incentives – which have attracted the likes of PepsiCo, PwC, and Deloitte – include zero percent corporate income tax for 30 years, as well as the ability to bid for government contracts.

Speaking to Arab News at the inauguration of Dussmann Group’s new office, Lanfredi said: “I believe the need for facility management consulting is growing due to all of the projects.”

He added: “We see that there is a huge market potential here in KSA … it will reach almost $50 billion in 2030 – which is very huge.”

Reflecting on why the company moved from the UAE, Lanfredi was clear that to become one of the biggest players in the Saudi market, “we need to follow Vision 2030.”

He added: “The growth and expectations are huge, and the potential is huge … compared to the market in the UAE for example, who has the highest maturation in the GCC region.” 

Dussmann Group’s presence in Riyadh is part of a joint venture formed in 2020 with Saudi investment conglomerate Ajlan & Bros Holding.

Ajlan Al-Ajlan, group managing director of the firm, highlighted that this was the first JV the investment organization had been involved with.

When asked about the decision to move its headquarters from the UAE to Saudi Arabia, Al-Ajlan said: “We see the growth and we see the massive potential opportunities within KSA, and we wanted to make sure that we are being a part of it.”

Speaking on the topic of job creation, Al-Ajlan highlighted that the JV started with “a couple of hundreds” of employees, and as of today there are over 4,000 staff members.

“In the next three to four years we are aiming to have more than 10,000 employees and the majority will be in KSA, this shows the direct impact of moving the headquarters KSA reflects directly onto the job creation,” he said.

“Our aim is to capture a decent market share and to be one of the prominent players within the market,” the managing director said.

Al-Ajlan said his company’s aim is to capture a “decent market share” and to be one of the prominent players within the sector – and this will be helped by the expertise at Dussmann Group.

“We are not here to reinvent the wheel, they have their operation in more than 25 countries, with more than 60,000 employees so we are intending to have the know-how brought to the region and more specifically KSA,” Al-Ajlan said.

The German Ambassador to Saudi Arabia Michael Kindsgrab attended the ribbon-cutting ceremony as the guest of honor and described it as a “happy day for German-Saudi business relations.”

He added: “If we have such a performer taking foot in Saudi Arabia, opening its regional headquarters here, expanding into the region, moving from 4,000 to 10,000 jobs, I think this is nothing but good news.” 


Saudi Post set to unveil region’s largest super sorting center

Saudi Post set to unveil region’s largest super sorting center
Updated 13 October 2024
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Saudi Post set to unveil region’s largest super sorting center

Saudi Post set to unveil region’s largest super sorting center

RIYADH: Saudi Arabia’s national postal company is preparing to launch the region’s largest super sorting center by early next year as part of its transformation strategy.

Anef Abanomai, president of Saudi Post, shared details about the new center with Arab News during the inaugural Global Logistics Forum in Riyadh.

The official said the facility is expected to significantly enhance supply chain capabilities, reduce delivery times, and support the Kingdom’s growing role as a global logistics hub.

“We have a plan. We’re hoping to be launching our design phase for our super sorting center toward the end of this year, early next year, as soon as we’re done with some permits and logistics challenges there,” Abanomai said.

The president emphasized that the launch of the upgraded sorting center, the largest in the region, will significantly boost productivity and services while also reducing costs and improving delivery times.

Abanomai noted that the organization is transitioning from traditional manual sorting methods to an automated, robotics-based system as part of its digital transformation strategy.

Previously, sorting was performed by staff who manually categorized and redirected items, making the process labor-intensive and susceptible to human error.

“That’s not the most efficient way to do it. It’s very challenging in terms of scalability and introduces a lot of risk for inconsistency, and mistakes happen that increase the cost,” Abanomai said.

He added: “Part of our digital transformation and automation roadmap was the introduction of robotics as a solution to improve our sorting, operation and process, which has been successful in deployment. Now, we’ll begin to gauge the impact on our efficiency cost to serve the resiliency of the service.”

According to Abanomai, Saudi Post is undergoing a significant transformation from a traditional postal operator, focused primarily on letters and stamps, to a comprehensive logistics provider.

This shift aligns with Saudi Arabia’s Vision 2030, leveraging the Kingdom’s strategic geographical position to connect three continents and enhance trade across various sectors.

Abanomai emphasized the necessity to expand and invest in various capabilities, particularly in logistics.

“When we talk about ports—seaports, airports, and land ports—there is a need to enhance and develop these areas to facilitate a more efficient and effective movement of goods and people, ultimately improving connectivity,” he stated.

He continued: “That will have a positive impact on many different industries, whether it’s trade, industrial manufacturing, mining, any industry, you can think of potentially will have an impact, through these capabilities that are being brought and invested in the country.” 

Another key catalyst for SPL’s transformation was the pandemic, which accelerated the organization’s shift and prompted the development of healthcare logistics solutions.

Abanomai explained that during COVID-19, government hospitals faced challenges in providing medications to patients due to restrictions on visits. In response, SPL implemented a rapid solution to deliver medications directly from hospital pharmacies to patients’ homes. Beyond healthcare, SPL has also expanded into innovative logistics operations.

“Over the past year, we’ve moved not just letters, electronics, and medications but also horses for the Saudi Cup, the world’s most prestigious horse race,” Abanomai said. 

He added: “This is just one example of how our logistics arm is helping position SPL as a leader in multiple sectors.”

The transformation involves leveraging existing capabilities and new investments to offer a broader range of services beyond what is typically expected from a postal operator.

One key example that he provided is SPL’s involvement in e-commerce logistics. The organization supports merchants by improving their access to customers, particularly through enhanced last-mile delivery solutions and sorting capabilities.

One of the biggest challenges facing the postal and logistics industry today is meeting evolving customer expectations, according to Abanomai.

“There’s always demand for faster, bigger, and less expensive services,” he said. 

Customers are also seeking more control, customization, and flexibility in the services they receive, which adds significant pressure on logistics providers. Balancing these demands with the operational realities is also complicated.

“The way logistics operations work is really through economies of scale,” Abanomai said.

To remain efficient, companies must invest in large-scale solutions and standardized processes, which can create tension as customers increasingly expect tailored and flexible services. A significant challenge for SPL and other logistics providers is the need to adapt swiftly to these changing expectations while maintaining operational efficiency.

“How do we create these solutions that are customizable, more efficient, and allow the control, at least the perception of control, for our clients and give them that ability to customize to their needs, without disrupting these standardized processes that the logistics providers have,” Abanomai said.

 


Saudi Arabia records 55% surge in container transhipment volume over 6 years, official says

Saudi Arabia records 55% surge in container transhipment volume over 6 years, official says
Updated 14 October 2024
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Saudi Arabia records 55% surge in container transhipment volume over 6 years, official says

Saudi Arabia records 55% surge in container transhipment volume over 6 years, official says
  • Kingdom saw a 31% increase in container import and export volumes over the same period Head of Mawani said Saudi Arabia’s geographical position offers direct access to key maritime channels

RIYADH: Saudi Arabia’s container transhipment volume between 2017 and 2023 witnessed a 55 percent surge, according to the president of the Saudi Ports Authority, or Mawani. 
During his presentation titled “Shaping Saudi Arabia’s Maritime Future” on the first day of the Global Logistics Forum taking place at the King Abdullah Financial District in Riyadh from Oct.13 — 14, Omar Hariri highlighted that the Kingdom saw a 31 percent increase in container import and export volumes over the same period.

This falls in line with Mawani’s goal to double the capacity of its ports, from the current 20 million containers to more than 40 million. 

It also aligns well with its aim to grow the market share of regional transhipment from around 32 percent to 45 percent and to lift the port occupancy rate to 70 percent.

“Between 2017 and 2023, we witnessed a 31 percent increase in container import and export volumes and a 55 percent surge in container transhipment,” Hariri said.

“These gains reflect both our economic growth story, as well as our success in improving port infrastructure and streamlining related operations in collaboration with you, our partners,” he added. 

During his speech, Hariri also shed light on the advantages of Saudi Arabia’s geographical position. 

“Our geographic location, bordered by the Red Sea and the Arabian Gulf, offers direct access to key maritime channels, which facilitate nearly 30 percent of the world’s container trade volume. This prime position strengthens Saudi Arabia’s ability to act as a bridge between the East and West, driving regional and global commerce,” the president said. 

“As the economic engine of the region, it generates 15 percent of the GCC’s (Gulf Cooperation Council) GDP (gross domestic product). In every way, our strategic location and economic strength make Saudi Arabia a country that can play an important role in shaping the future of global trade,” he added. 

As part of the event, President of the Saudi General Authority of Civil Aviation Abdulaziz Al-Duailej participated in a fireside chat titled “The Role of Air Cargo in Saudi Arabia’s Vision for Global Logistics Leadership,” in which he highlighted the importance of the sector in global supply chain and how it cannot be overstated.

“In an era where speed, reliability, and safety are paramount, air cargo has a distinct advantage over other modes of transport,” Al-Duailej said. 

“First, air cargo is essential for time-sensitive goods, from health care goods to electronics. We’ve seen its importance in a crisis like COVID-19, where GACA’s commitment to overcoming logistical challenges allowed the transportation and distribution of more than 53,000 kgs of vaccines,” he added. 

The GACA president underlined that globally, air cargo handles approximately $5.6 trillion, or 35 percent, of world trade by value despite accounting for less than 1 percent by volume.

“In 2023, the global air cargo volume was 58 million tonnes with $138 billion in revenue for airlines. In 2024, the global air cargo volume is expected to increase to 61 million tonnes with $120 billion revenue for airlines. This indicates a 5.2 percent increase in air cargo volume,” Al-Duailej said.

“Saudi Arabia has also witnessed significant growth in air cargo in 2024, with a 53 percent increase compared to 2023. For the first time, the country’s airports are expected to surpass the 1 million tonnes mark with a total volume of 1.2 million tonnes of air cargo anticipated,” he concluded in that regard.

Speaking in a separate panel titled “The New Map of Global Logistics Corridors, Putting the Pieces Together,” Chief Commercial Officer at Riyadh Air, Vincent Coste, revealed that the airline received its last certification flight with GACA. 

“Riyadh Air had quite an amazing achievement today because we completed our last certification flight with GACA. It has been a fantastic adventure with GACA since we started this. So, in the coming weeks, we will have hopefully this stamp from GACA saying we are an official airline, so that’s a great step,” Coste said. 

“The next step is summer 2025 when we are planning to start operating. We will operate in the summer to a few destinations, but starting from summer 2025 until the end of 2030, we’ll have the fastest growth that any commercial airline has experienced, with an average of two destinations opened every month and will be at over 100 destinations by 2030,” he added. 

Speaking during the same panel discussion, the CEO of Vietnam SuperPort at YCH Group, Yap Kwong Weng, explained the company’s offers. 

“And I’m also the CEO of the Vietnam SuperPort, a multi-modal logistics port that focuses on bonded warehouses cargo and also, you know, a spectrum of other activities that facilitate and push toward a sustainable outcome,” Weng said. 

“And here we are talking about cost competitiveness. We are talking about, you know, building new advantages. And that’s what logistics is all about, reducing cost, increasing efficiency,” he added.

GLF24 brings together global logistics leaders to discuss the latest trends, challenges, and opportunities in the sector.

Participants will explore future cooperation between stakeholders, focusing on reshaping the future of global logistics services. 

The two-day event aims to boost international collaboration and drive growth in the logistics sector by highlighting the latest technologies and innovative solutions. The event will also launch several initiatives to strengthen global communication and contribute to developing more efficient, sustainable, and flexible supply chain services. 

The first edition of the Global Logistics Forum is a pivotal event for the Ministry of Transport and Logistics Services, as it aims to revolutionize global trade by enhancing efficiency and profitability.