IEA cuts 2024 oil demand growth forecast on China slowdown

A view of the logo of the International Energy Agency in Paris, France. File/Reuters
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Updated 12 September 2024
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IEA cuts 2024 oil demand growth forecast on China slowdown

  • IEA cut its growth forecast by 70,000 bpd, or about 7.2%, to 900,000 bpd
  • It cited a slowdown in Chinese demand as main driver of weaker global demand growth

PARIS: Global oil demand grew at its slowest pace since 2020 in the first half of 2024 due to China’s economic slump, the International Energy Agency said Thursday, prompting the IEA to lower its full-year forecast.
Demand increased by 800,000 barrels per day in the first six months of 2024, compared to 2.3 million bpd over the same period in 2023, the IEA said in its monthly oil market report.
“The chief driver of this downturn is a rapidly slowing China, where consumption contracted y-o-y (year-on-year) for a fourth straight month in July,” the Paris-based agency said.
China is among the world’s top consumers and importers of oil, but the world’s second-biggest economy has struggled amid weak consumer spending, a property sector crisis and high unemployment.
The IEA also cited the country’s shift away from oil in favor of alternative energy.

Rising sales of electric vehicles are reducing demand for road fuel while the development of its vast high-speed rail network is restricting growth in domestic air travel, the IEA said.
Outside of China, it added, “oil demand is tepid at best.”
For the full year, global oil demand is forecast to grow on average by 900,000 bpd, some 70,000 bpd below the IEA’s previous estimate.
This will take total demand to almost 103 million bpd.
Oil prices have weakened this year over concerns about the global economic outlook.
This week, Brent North Sea crude, the international benchmark, fell below $70 per barrel for the first time since December 2021.
The fall in prices has prompted leading members of the OPEC+ oil cartel, including Saudi Arabia and Russia, to postpone a planned output increase and instead extend voluntary supply cuts until the end of November.
The IEA said the delay gives OPEC+ “some time to further evaluate demand prospects for next year” as well as the impact of output disruptions in Libya.
But with supply from non-OPEC+ nations rising faster than overall demand, the group “may be staring at a substantial surplus, even if its extra curbs were to remain in place.”


Top German executive sees Saudi facilities management sector doubling thanks to Vision 2030

Updated 50 sec ago
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Top German executive sees Saudi facilities management sector doubling thanks to Vision 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 $50billion 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 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

Updated 13 October 2024
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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 transshipment volume over 6 years, official says

Updated 45 min 37 sec ago
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Saudi Arabia records 55% surge in container transshipment 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.


Closing Bell: Saudi main index closes in green at 12,069

Updated 13 October 2024
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Closing Bell: Saudi main index closes in green at 12,069

  • MSCI Tadawul Index increased by 6.27 points, or 0.42%, to close at 1,510.67
  • Parallel market Nomu surged, gaining 600.43 points, or 2.45%, to close at 25,123.38

RIYADH: Saudi Arabia’s Tadawul All Share Index surged on Sunday, gaining 74.99 points, or 0.63 percent, to close at 12,069.21. 

The total trading turnover of the benchmark index was SR5.69 billion ($1.51 billion), as 189 of the listed stocks advanced, while 35 retreated.  

The MSCI Tadawul Index increased by 6.27 points, or 0.42 percent, to close at 1,510.67. 

The Kingdom’s parallel market Nomu surged, gaining 600.43 points, or 2.45 percent, to close at 25,123.38. This comes as 48 of the listed stocks advanced, while 20 retreated. 

The best-performing stock of the day was Fawaz Abdulaziz Alhokair Co., with its share price surging by 9.98 percent to SR13.44. 

Other top performers included Development Works Food Co., which saw its share price rise by 9.86 percent to SR140.40, and Batic Investments and Logistics Co., which saw a 9.38 percent increase to SR4.08. 

The worst performer of the day was Al-Baha Investment and Development Co., whose share price fell by 9.52 percent to SR0.38. 

Al Majed Oud Co. and Anaam International Holding Group also saw declines, with their shares dropping by 5.95 percent and 2.16 percent to SR158 and SR1.36, respectively. 

Saudi Advanced Industries Co. has announced its estimated financial results for the period ending on Sept. 30. ​​SAIC’s shares advanced in today’s trading session, surging by 4.95 percent to reach SR37.10.

According to a Tadawul statement, the firm recorded a net profit of SR285.53 million in the first nine months of the year, reflecting a 156.84 percent surge compared to the same period in 2023. 

The rise in net profit for the current period, compared to the same period last year, is driven by higher revenue, despite increases in general and administrative expenses, financing costs, and zakat expenses. 

The Saudi Exchange has also announced the issuance of its resolution approving Shatirah House Restaurant Co. request to transfer from Nomu to the main market, with a capital of SR35 million and 35 million shares.  

The company’s shares will continue to be traded in the parallel market until the end of the period for publishing the transfer document, accordingly, the issuer must publish the transfer document within three trading sessions following the announcement of Saudi Exchange’s approval of the transfer request. 

The transfer document will be available to the public for viewing on the websites of the issuer, Saudi Exchange and the financial adviser for a period of ten trading sessions.

Accordingly, the trading of the issuer’s shares will cease starting from the day following the end of the period for publishing the transfer document for a period not exceeding five trading sessions, and the transfer procedures will begin. 

Saudi Exchange will also announce the cease of trading the shares and the start date of listing the issuer’s shares in the main market as soon as the procedures are completed. 

Tamkeen Human Resources Co., one of Saudi Arabia’s premier providers of innovative human resources solutions, has announced the price range for its initial public and the commencement of the institutional book-building period for participating parties. 

The price range for the offering has been set between SR46 and SR50 per share. The institutional book-building period commenced Oct. 13 and will end on Oct. 17. 

The offering will also consist of a secondary offering of 7.95 million offer shares, representing 30 percent of the company’s total issued share capital. 

It’s net proceeds will be distributed to the selling shareholders. The company will not receive any part of the proceeds from the offering. 

The final price at which all subscribers in the offering will purchase shares will be determined at the end of the book-building period.


Saudi Arabia aims for global logistics hub status by 2030 with tech investments 

Updated 14 October 2024
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Saudi Arabia aims for global logistics hub status by 2030 with tech investments 

RIYADH: The King Salman International Airport Development Co., a Saudi wealth sovereign fund-owned company, announced it had signed an agreement with ewpartners, a firm specializing in private investment, strategic alliances, and asset initiatives.

The partnership with the Public Investment Fund aims to leverage Saudi Arabia’s location as a link between three continents to drive growth and enhance operational excellence in the logistics sector, reported the Saudi Press Agency.

The parties will explore establishing an economic center for e-commerce and distribution, which is one of the hubs announced by the Ministry of Transport and Logistics Services.

This initiative aims to improve supply chains and facilitate investment and trade, thereby achieving the goals of the National Transport and Logistics Strategy and the objectives of Saudi Vision 2030.

The agreement strives to establish a logistics center at King Salman International Airport, designed to strengthen distribution management ties between China and Saudi Arabia.

This will play a significant role in positioning the Kingdom as a key regional hub for air freight, as per SPA.

The center is expected to enhance the efficiency and capabilities of distribution at the regional and international level, establishing the airport as a global logistics hub and reflecting the strategic role of Saudi Arabia in global services.

Marco Mejia, the acting CEO of KSIADC, commented that this partnership represents an important step toward realizing its vision of making KSIA a primary logistics center that serves regional and global companies and supports the country’s trade expansion.

He added: “Through our collaboration with ewpartners, we aim to enhance the Kingdom’s logistical infrastructure, increase operational efficiency, and create new opportunities that contribute to economic growth in the Kingdom and the region.”

Jerry Li, founder and managing partner of ewpartners, highlighted that the strategic location of the airport, along with its extensive regional commercial capabilities, will open new avenues for growth and innovation in the logistics and e-commerce sectors in the Kingdom.

The news agency underlined that partners would work to enhance various areas, including infrastructure, digital services, advanced manufacturing, and logistics.