Good morning, folks. We have a hefty issue that’s heavy on the investment updates with a big announcement from Adnoc, fresh news from the Talabat IPO, and new details on the Development Road Project. Let’s dive right in, but first…
WORTH READING THIS MORNING- EnterpriseAM Egypt has a lengthy feature delving into Egypt’s cotton pricing crisis which has seen its local trading system grind to a halt. The country has temporarily suspended the local cotton trading system on the back of pricing issues that have crippled the industry this season, on the back of guaranteed prices set for farmers significantly exceeding the crop’s current global market value.
WATCH THIS SPACE-
#1- Qatar is interested in investing in Egyptian logistic zones and ports, Egyptian Prime Minister Mostafa Madbouly said in the meeting with Qatari Prime Minister Sheikh Mohammed bin Abdulrahman Al Thani yesterday. Data centers are also a point of investor interest for Qatar with a list of projects in New Alamein and Greater Cairo ready to be offered.
Egypt’s Industry Minister Kamel El Wazir also floated the idea of establishing a Qatari industrial zone, and also welcomed investment into existing factories. El Wazir name-checked aluminum and iron as sectors ripe for cooperation.
ON A RELATED NOTE- Egypt is looking to boost its chemical sector exports by 30% q-o-q to hit USD 8.5 bn by the end of 2024, according to a statement. Chemical sector exports were valued at USD 6.5 bn, rising 5% y-o-y in the first nine months of 2024, accounting for some 21% of Egypt’s total non-oil exports. Turkey took the lead as Egypt’s main importer, with Egypt importing USD 950 mn worth of chemical sector goods, followed by Italy, France and the UK.
#2- BAC is supersizing its cargo ambitions: Bahrain Airport Company (BAC) is launching a tender for the second phase of the Express Cargo Village at Bahrain International Airport (BAH) which will be 3x larger than the first phase, CEO Mohamed Yousif Al Binfalah told Aerospace Global News. The firm is also looking to upgrade several parts of the airfield, including giving the runway a facelift from ICAO Category 2 to Category 3. BAC inked a number of agreements this month with key logistics players, including DHL, Ryanair, Ajex and Asia Cargo at the Bahrain International Airshow in a bid to boost facilities and services at Bahrain International Airport (BAH).
#3- Tanzania-East Africa Gateway agreement still intact: Tanzania intends to honor its Dar es Salaam port container terminal agreement with UAE-based East Africa Gateway, a subsidiary of Indian port operator Adani Ports and Special Economic Zone, despite a US indictment of its bn’aire Gautam Adani on bribery and fraud allegations, a senior official told Reuters. East Africa Gateway signed a share purchase agreement to acquire 95% of Tanzania International Container Terminal Services for USD 39.5 mn from Hutchison Port Holdings and Harbors Investments back in June. The acquisition is part of a 30-year concession agreement between Adani International Ports Holdings and Tanzania Port Authority to manage and operate Container Terminal 2 at Tanzania’s Dar es Salaam Port.
What has happened since? The Indian firm’s chairman was indicted by the US prosecutors for his alleged role in a USD 265 mn scheme related to power supply agreements from energy projects in India to bribe Indian officials, Reuters reported earlier this week. The indictment has ramifications across the world, with Kenya scrapping an agreement inked with an Adani unit to develop power transmission lines, and cancelled a proposal to add a second runway at the Jomo Kenyatta International Airport in a 30-year lease.
TotalEnergies could hit a pause: French oil giant TotalEnergies is pausing financial contributions to its Adani Group investments until there is more clarity over the course, indicating that it can still meet it renewable energy targets without developing any new business the indicted firm, CEO Patrick Pouyanne told Reuters in a separate report. The French firm — which has a seat on Adani Green Energy;s board — said that it had not been aware of the US’ investigation before the week’s indictment and purchased the solar stakes after performing due diligence.
#4- No word yet on the Covestro takeover: Shareholders’ acceptance period for Adnoc’s voluntary public takeover offer bid for Covestro should have wrapped yesterday, though an extension of two weeks — to 16 December — was also on the table. Covestro’s management already gave the offer a nod earlier this month, with closing not expected before 2H 2025.
Refresher: Adnoc has been in ongoing negotiations for the takeover, which is set to be the biggest acquisition from a Middle Eastern buyer in Europe in 16 years, for more than a year. The oil giant will acquire Covestro for EUR 14.7 bn (c. USD 16.3 bn), which includes EUR 3 bn in debt. It plans to purchase EUR 1.17 bn worth of new shares from Covestro as part of a 10% capital increase.
#5- The EU is mulling another round of sanctions on tankers carrying Russian oil and is considering the inclusion of Chinese drone manufacturers with ties to Moscow, EU diplomats told Reuters. Some 29 entities and 54 individuals could be added to the existing sanctions list, which already includes over 2.2k entities, and would consequently ban entry to and freeze their assets within the bloc. Poland will assume the EU’s rotating presidency from Hungary in January and is subsequently forecast to push for a heightened package of sanctions, in comparison to its Russia-friendly predecessor.
Piling on: The US slapped new sanctions on mega Russian private-owned bank Gazprombank last week, barring the firm from trading with American citizens and its US assets are frozen. The UK added 18 Russian oil tankers and four LNG ships to its sanctions list in an effort to clamp down on the country’s so-called dark fleet last month.
MARKET WATCH-
#1- Oil prices dipped in early morning trading on the back of an unexpected spike in US gas inventories as investors await news from Opec+ next week, Reuters reports. Brent crude futures shed USD 0.14 trading at USD 72.69 a barrel by GMT 04.01, while US West Texas Intermediate crude (WTI) futures dipped USD 0.14 to USD 68.58 a barrel.
#2- Asia LNG prices could jump USD 20 per mn British thermal units (mmBtu) if European gas supply narrows this winter, Goldman Sachs analysts told Reuters. There is also a possibility of delays in the upcoming LNG supply projects across the US, which will force Europe and Asia to have access to less LNG next year than originally projected. “All the LNG that Asia needs to buy to fill this deficit comes from the Atlantic basin, so Asia prices have to compete with European natural gas prices … if Europe is tight, then Asia LNG prices will be elevated as well,” co-head of global commodities research Samantha Dart added.
#3- Baltic index dips once again: The Baltic Exchange’s dry bulk sea freight index — which tracks rates for the capesize, panamax, and supramax vessel segments — shed nearly 4.6% to 1,509 points on Wednesday, hitting its lowest since 8 November. The capesize index dipped 210 points to 2,569 points, while the panamax index dropped 12 points to 1,044 points. The smaller supramax index rose 3 points to 988 points.
PSA-
#1- Shipping giant Hapag-Lloyd will expand its current EU ETS surcharge effective January to reflect the rise in surcharge and fuel bunkering costs, according to a statement. The firm forecasts its existing EU ETS surcharge costs to almost double, without providing further detail on the exact figures, while the company’s Ship Green product will remain at the same price structure.
What does the charge cover? The EU ETS will cover carbon dioxide emissions of journeys starting and ending in the bloc, applying to 100% of emissions from inta-EU journeys and 50% of emissions from journeys starting or terminating in the zone. Under the legislation, companies, which must acquire emission allowances, will face gradual increases on a yearly basis, with costs for carriers to increase by around 75% from this year to next. Currently, carriers pay for 40% of emissions produced, while carriers are set to pay for 70% of emissions in 2025, and 100% of emissions in 2026 and onwards.
#2- Maersk and Hapag-Lloyd’s Gemini Cooperation will be open for cargo bookings next Tuesday, according to a statement. The cooperation also updated its trade brochure, service details, and schedules for the upcoming bookings.
#3- The Jordan Hejaz Railway Corporation (JHR) will temporarily suspend train services for the winter season routine maintenance, Jordan Times reported earlier this week. Maintenance work will be carried out on railway tracks, stations, carriages and locomotives in preparation for the upcoming tourist season, with efforts focused on the southern line leading to Qatraneh, along with the northern line. Services are expected to resume in the spring, with trains running to Umm el-Jimal in the north, the Al-Jizah in the south, and further to Qatraneh.
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CIRCLE YOUR CALENDAR-
Saudi Arabia will host the Wings of Change Middle East from Monday, 2 December to Tuesday, 3 December in Riyadh. The event will bring together aviation leaders, regulators, and experts in air transport.
Morocco will host the Rail Industry Summit from Tuesday, 10 December to Wednesday, 11 December in Casablanca. The two-day summit includes pre-scheduled business meetings with potential partners, conferences, and themed workshops on new market trends and future strategies presented by OEMs on infrastructure, rolling stock, embedded equipment and railway vehicle interiors.
The UAE will host the Middle East Business Aviation Show from Tuesday, 10 December to Thursday, 11 December in Dubai. The event will showcase innovations from over 135 exhibitors and will have over 25 jets on display, with over 55 speakers offering insight on market trends.
Check out our full calendar at the bottom of this email for a comprehensive listing of upcoming news events and news triggers.