Foreign firms vie to rebuild ravaged Beirut port

The August 4 explosion of hundreds of tons of ill-stored fertilizers devastated the dockside and large swathes of the capital, killing more than 200 people. (File/AFP)
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Updated 14 April 2021

Foreign firms vie to rebuild ravaged Beirut port

  • A German delegation last Friday unveiled a spectacular $30-billion project to rebuild the port and adjacent areas
  • Former colonial power France has also been positioning itself to take on the port’s reconstruction

BEIRUT: Eight months after a massive blast ripped through Beirut port and nearby districts of the Lebanese capital, a host of foreign companies with different national interests are competing to rebuild it.
“Everyone has their eyes on the port: the Russians, the Chinese, the Turks, the French and now the Germans,” interim port director Bassem Al-Kaissi said.
“But for the moment these are only declarations of intent.”
The August 4 explosion of hundreds of tons of ill-stored fertilizers devastated the dockside and large swathes of the capital, killing more than 200 people.
A German delegation last Friday unveiled a spectacular $30-billion project to rebuild the port and adjacent areas, in the presence of their ambassador.
The ambitious plan, drawn up by companies including Hamburg Port Consulting, seeks to move the port east, and remodel the nearby area to include social housing, a “central park” and even beaches.
Former colonial power France has also been positioning itself to take on the port’s reconstruction.
When French President Emmanuel Macron made a second visit to Beirut in September after the monster explosion, the Lebanese-born head of French shipping giant CMA-CGM, Rodolphe Saade, was in his delegation.
During the trip, his company presented Lebanon with a three-phase project to rebuild, expand and modernize the seaside location to become a “smart port,” its regional director Joe Dakkak told AFP.
The first two phases would cost between $400 million to $600 million and the firm would fund half, while around 50 companies and international organizations had also shown interest in participating, he said.
CMA-CGM has already obtained a concession to run the container terminal in Lebanon’s second city Tripoli until 2041, and hopes to soon win a bid for container operations in Beirut.
Beyond the commercial interests, political analyst Imad Salamey says geopolitical influence is also at play.
The appeal includes ongoing “offshore gas exploration in the Mediterranean,” “Russian expansionism” in the region, and “future economic collaboration between Israel and Arab countries” in the wake of several normalization accords, he said.
In 2018, Lebanon signed its first contract for offshore oil and gas drilling in two blocks with a consortium comprising French, Italian and Russian energy giants, Total, ENI and Novatek, respectively.
And further north, Damascus ally Russia has started drilling off the coast of war-torn Syria, Salamey said.
The port is likely small fry for China, Salamey said.
But it could attract the Chinese “to strengthen their alliance with the Iranians,” who hold sway in Syria and Lebanon, where it sponsors the powerful Hezbollah movement.
The former US envoy for Near Eastern affairs, David Schenker, has warned against China winning the bid.
“Beijing’s aversion to transparency and its ambivalence toward Hezbollah would make a Chinese role in reconstruction a worst-case outcome,” he wrote.
He said Washington should work closely with whichever country wins the port bid to ensure the project is “bound to the principle of reform.”
The international community is insisting on sweeping reforms, including at the port, before pumping in foreign aid to rescue the country from its worst economic crisis in decades.
But for eight months, deeply divided politicians have failed to agree on a new cabinet to launch them.
Despite this, Kaissi said port authorities were working on an action plan to reconstruct and revamp the facility, to be submitted to any new government.
There is an obstacle to the German proposal.
Lebanese activists fear its plan for a park and beaches could spell a repeat of the Beirut center’s post-war transformation.
The neighborhood was once a historic and vibrant commercial center where people of all social and religious backgrounds mixed.
But Lebanese company Solidere privatised downtown Beirut, converting it into grandiose real estate unaffordable to the average Lebanese.
“We will not accept a new Solidere with a foreign touch,” civil society group Nahnoo has said.
Economist Jad Chaaban said that any project as huge as the port would require “national consultation.”
“Foreign companies alone should not decide. Neither should the Lebanese state.”


How the pandemic helped 3D printing became mainstream

Updated 13 May 2021

How the pandemic helped 3D printing became mainstream

  • Demand in the Kingdom is coming from critical sectors, such as oil, gas, defense, and utilities

JEDDAH: The global uncertainty created by the coronavirus disease (COVID-19) pandemic was a challenging time for many industries. However, for some, such as Zoom or Amazon, it was a blessing in disguise and a catalyst for accelerated growth.

The 3D printing sector also saw a rapid surge in demand.

Dubai-headquartered Immensa Technology Labs reported that its business grew by nearly 400 percent in 2020, as global supply chains were disrupted, and operators scrambled to find an alternative.

“The pandemic was probably one of the biggest propellers for this technology, the year of COVID-19 is the year that 3D printing grew up and became mainstream,” CEO and founder of Immensa, Fahmi Al-Shawwa, told Arab News.

“3D printing saved the day,” he said, adding: “Whether it was in the medical sector, where we started producing components for hospitals to utilize, or things as big as old refineries, where there had been components that failed, and they could not resource the spare parts, we produced them.”

As one of the biggest markets in the region, Saudi Arabia was an obvious target for expansion. In April, Immensa was the first company in the Kingdom to be awarded an additive manufacturing — or 3D printing — license by the Saudi Ministry of Investment.

Immensa launched into the Saudi market in November through its acquisition of two Saudi 3D printing startups, Shakl3D and LayLabs. Shakl3D was established in 2016 and LayLabs two years later. By combining with Immensa, the larger entity is aiming to scale globally and target opportunities in Europe and North America.

“By acquiring their existing setups and investing in what they have started, we can expedite the development of the industrial 3D-printing sector in the Kingdom and provide both teams with the international platform of Immensa,” Al-Shawwa said.

HIGHLIGHTS

● In April, Immensa was the first company in the Kingdom to be awarded an additive manufacturing — or 3D printing — license by the Saudi Ministry of Investment.

● Immensa launched into the Saudi market in November through its acquisition of two Saudi 3D printing startups, Shakl3D and LayLabs.

● The company has also acquired a 10,000 square foot industrial facility in Dammam and is planning to establish a network of other 3D printing hubs across Saudi Arabia.

The company has also acquired a 10,000 square foot industrial facility in Dammam and is planning to establish a network of other 3D printing hubs across Saudi Arabia.

3D printing is a production method in which materials such as plastic or metal are stacked in layers to create products. It is also known in the industry as additive manufacturing or rapid prototyping.

Immensa is focused on industrial 3D printing, making mechanical and functional parts for the oil and gas, utilities, power, and water treatment sectors. Al-Shawwa is planning to expand the company’s reach to other sectors and industries.

“We already have our plastics and polymer machinery up and running,” he said, adding that its “metal facility will be operating in the coming weeks.”

As part of its overall strategy, the CEO said he is planning a big investment drive in the Kingdom. “Over the next three years, I think we will be investing significantly.”

According to Statista, the global 3D printing market was valued at around $13 billion in 2020 and is forecast to grow at a rate of 26 percent per annum between 2022 and 2024.

At the same time, in its latest report issued late last year, research firm UnivDatos Market Insights said the 3D printing industry in the Middle East and North Africa was valued at $521.4 million in 2018, which is expected to rise to $1.374 billion by 2025.

“Globally, the adoption of 3D printing is growing at around 30 percent per year. I think what we are going to see in Saudi Arabia is it growing by more than four times that, of 150 to 200 percent per year,” Al-Shawwa said.

Demand in the Kingdom is coming from critical sectors, such as oil, gas, defense, and utilities. These sectors pave the way for other sectors, as other industries are slowly adopting the technology in areas like tooling and injection molding, he explained.

The company boasts eight full-time engineers in Saudi Arabia, with plans to increase that to over 20 this year. Al-Shawwa said one of the reasons for their focus on Saudi Arabia was the availability of local engineers.

“The pool of talent in Saudi Arabia is phenomenal,” Al-Shawwa said.

“One of the reasons why we are shifting to Saudi because we don’t have to rely on expat talents. You can actually rely on local talent.”

Al-Shawwa envisions Immensa eventually becoming a Saudi-American company in the next five years. Its primary base will be in the Kingdom, servicing the rest of the Gulf, which has been the company’s main focus market for the last two years. However, it has recently expanded to the US, which will focus on clients in Asia and northern Europe.


Oil industry spending cuts hammer services firm CGG

Updated 13 May 2021

Oil industry spending cuts hammer services firm CGG

  • A recent pick up in oil prices helped Europe’s major energy companies to post big increases in first quarter earnings

GDANSK: French oil services group CGG posted a 71 percent plunge in first quarter core profit on Wednesday, reflecting a year of drastic spending cuts by the oil industry in the pandemic and sending its shares sharply lower.

In a call with analysts, CEO Sophie Zurquiyah said the quarter had been slow as expected, but predicted more spending in the second half of 2021, noting a resumption of commercial business and contract awards in March and higher oil prices.

“I believe we will see the need for our clients to increase their activity to not only catch up on the work postponed from 2020, but also to compensate for the depletion of their existing reservoirs,” she told analysts in a call.

Zurquiyah confirmed the firm’s 2021 targets.

A recent pick up in oil prices helped Europe’s major energy companies to post big increases in first quarter earnings.

That could bode well for CGG, which cut jobs and sold out of businesses last year as companies such as BP, Total, and Equinor slashed spending.

The Organization of the Petroleum Exporting Countries (OPEC) on Tuesday stuck to its prediction of a strong recovery in world oil demand in 2021, as growth in China and the US counters the coronavirus crisis in India.

OPEC and its allies, known as OPEC+, agreed in April to gradually ease oil output cuts.

CGG posted a first quarter core profit of $36 million, while its multi-client business — which offers seismic data and geological studies — had just one active project in offshore Brazil. Its stock was down over 9 percent at 0725 GMT, the worst performer on France’s SBF 120 index.


SoftBank joins top earners with $37bn Vision Fund profit

Updated 13 May 2021

SoftBank joins top earners with $37bn Vision Fund profit

  • SoftBank has hiked its committed capital in the second fund to $30 billion from $10 billion

TOKYO: SoftBank Group Corp. on Wednesday reported a record fourth quarter 4.03 trillion yen ($36.99 billion) Vision Fund unit profit from an investment gain on Coupang, putting it among the world’s biggest earning firms a year after an unprecedented loss.

Group net profit was 4.99 trillion yen ($45.88 billion) in the year ended March, beating the $42.5 billion made by Warren Buffett’s Berkshire Hathaway Inc. in its last business year.

It also compares with a 962 billion yen loss a year earlier after teetering tech bets depressed the value of Softbank’s portfolio.

“It’s clearly validation of Masa’s thesis,” Navneet Govil, Vision Fund’s chief financial officer, told Reuters in an interview, referring to company founder and CEO Masayoshi Son.

Market enthusiasm for tech stocks drove the public listing of SoftBank-backed e-commerce firm Coupang and used-car trading platform Auto1 Group and the rising share price of ride-hailing firm Uber during the quarter.

To sustain Softbank’s position among the global corporate elite, Son will have to replicate that fourth quarter performance with other yet-to-list companies in the Vision fund portfolio. Son has likened that to laying golden eggs.

Candidates including ride-hailing firm Didi, TikTok owner Bytedance and truck service platform Full Truck Alliance have strong revenue growth, healthy market share and a clear path to profitability, according to Govil.

These companies are “sizeable investments with significant value to be unlocked,” he said.

Much of Vision Fund’s gain, however, is on paper with the value of the portfolio locked up in the stock market amid concern over frothy valuations and a boom in special purpose acquisition vehicles (SPACs), which has drawn regulatory scrutiny.

The total fair value of the first $100 billion Vision Fund and the smaller second fund was $154 billion at the end of March, with SoftBank distributing $22.3 billion to limited partners.

SoftBank has hiked its committed capital in the second fund to $30 billion from $10 billion, reflecting the breadth of investment opportunities, Govil said.

Two of SoftBank’s highest profile bets, space sharing firm WeWork and ride-hailing firm Grab, have outlined plans to list via SPAC mergers, with Vision Fund reportedly in talks to use its own such vehicle to list portfolio company Mapbox. The Grab deal offers further upside for the Vision Fund should the transaction go through, Govil said.

The group’s trading arm, SB Northstar, is expanding deal making this week leading a $1 billion investment in acquisitive e-commerce firm THG.

SB Northstar and the broader group recorded a 233 billion yen loss on investments in listed stocks and derivatives as efforts to work cash reserves outside the Vision Fund sputter.

SoftBank has completed a 2.5 trillion yen buyback program launched last year, which pushed the stock price to two-decade highs in March. The end of the buyback pulls support at a time when shares are sliding in line with weakness in US tech stocks.


Global demand for diamonds rebounds

Updated 13 May 2021

Global demand for diamonds rebounds

  • Sales by the state-controlled company totaled $1.6 billion for the first four months of 2021

MOSCOW: Russia's Alrosa, the world’s largest producer of rough diamonds, said on Wednesday its April sales of rough and polished stones rose by 12 percent month-on-month to $401 million after demand for diamond jewelry strengthened in the main markets.

Global demand for precious stones has been recovering from the impact of the coronavirus disease (COVID-19) pandemic since the second half of 2020.

Sales by the state-controlled company totaled $1.6 billion for the first four months of 2021. At the height of the pandemic in April 2020, Alrosa’s sales were only $15.6 million. 

They rose to $357 million in March this year.

Alrosa, which competes with Anglo American unit De Beers, is gradually restoring its production after last year's 22 percent reduction. It plans to return to its usual annual output of 36-37 million carats within 2-3 years from 31-32 million carats in 2021.

Rough diamonds account for the bulk of Alrosa’s sales, although it polishes those of rare colors or of large size for sale in auctions.

“Our April sales were well supported by the successful results delivered by auctions of high-quality large rough, as well as by strong sales of polished diamonds,” Evgeny Agureev, its deputy chief executive, said in a statement.

A 100.94 carat stone called the Alrosa Spectacle — the largest polished diamond ever cut in Russia — will be auctioned by Christie’s in Geneva on Wednesday.


Japan steps up marketing push to win back Saudi tourists

Updated 19 min 51 sec ago

Japan steps up marketing push to win back Saudi tourists

  • The number of tourists from GCC countries who have visited Japan has doubled in the last five years

RIYADH: Prior to the onset of the coronavirus disease (COVID-19) pandemic, Japan had witnessed a surge in the number of tourists from Saudi Arabia, and the country’s tourism board is keen to revitalize this once international travel resumes on May 17.

According to the Japan National Tourism Organization (JNTO), a total of 11,152 Saudi tourists visited the East Asian country in 2019, a year-on-year surge of 50.6 percent.

However, due to global travel restrictions as a result of the pandemic, Tomoko Kikuchi, executive director of the JNTO’s Dubai Preparation Office, told Arab News the numbers declined rapidly last year.

“Unfortunately, because of the pandemic, the number decreased more than 90 percent in 2020. We do not expect it to recover soon, but we hope to return to 2019 levels at the soonest,” she said.

Tomoko Kikuchi

In a bid to revive interest from visitors in the region, the JNTO has put in place a strategy to raise visitor numbers to their pre-pandemic levels.

As part of its goal to attract 60 million international visitors per year by 2030, the JNTO announced in April that it is planning to establish a regional office in Dubai and to exhibit at the Arabian Travel Market, the Middle East’s largest tourism exhibition, which starts in Dubai on May 16.

The number of tourists from Gulf Cooperation Council (GCC) countries who have visited Japan has doubled in the last five years, reaching 28,222 in 2019.

With Saudi visitors making up nearly 40 percent of GCC visitors before the pandemic, the JNTO partnered with global travel and tourism sales and marketing firm AVIAREPS Middle East to promote Japan in the Saudi market.

“Many travelers from Saudi Arabia visit Tokyo and Kyoto to enjoy the unique cityscapes that fuse traditional and contemporary culture, to try Japanese food and to do some shopping, but there are many other attractive aspects to Japan. Nature is abundant, and you can enjoy the beach in the summer and skiing in the winter. We would like to promote various Japanese tourist attractions in the Saudi market this year,” Kikuchi said.

“It is great to know that vaccinated Saudi citizens will be allowed to travel overseas from May 17. When the COVID-19 situation improves internationally and domestically in Japan, we would like to welcome tourists from Saudi Arabia,” she added.