Adnoc Distribution opens three service stations in Egypt in expansion push

Adnoc Distribution, the UAE’s largest fuel and convenience retailer, has opened three service stations in Greater Cairo and plans to launch another six in Egypt by the end of 2023 as part of its international expansion plans.

This is the first time the company has opened its Adnoc branded service stations in Egypt.

The move comes after Adnoc Distribution bought a 50 per cent stake in TotalEnergies Marketing Egypt earlier this year.

“Today marks an important milestone in our international expansion journey as we launch Adnoc service stations in Egypt,” said Bader Al Lamki, chief executive of Adnoc Distribution.

“As a future-focused business, we continue … to address the needs of our customers and look forward to bringing more of our innovative and digitally-backed services to the Egyptian market and to exploring further opportunities to grow our portfolio.”

The joint venture with TotalEnergies finalised in February this year, includes a diversified portfolio of 240 fuel retail stations, more than 100 convenience stores, 250 lube changing stations, car washes, lubricants, wholesale and aviation fuel operations.

The joint venture has already expanded its corporate portfolio in the aviation fuels business by securing the right to supply Etihad Airways flights fuelled in Cairo. The partnership is developing the infrastructure and logistical framework to launch Adnoc Voyager, its automotive lubricants brand.

Attendees at the launch at the Adnoc service station in Degla Maadi included (fourth from left) Alaa El Batal, president of the Egyptian General Petroleum Corporation, (fifth from left) Bader Al Lamki, chief executive of Adnoc Distribution, (sixth from left) Tarek El Molla, Egypt’s Minister of Petroleum and Mineral Resources, and (seventh from left) Maryam Al Kaabi, UAE ambassador to Egypt. Photo: Adnoc

The newly opened Adnoc service stations in Egypt are in Degla Maadi, Obour City and on the Suez Ring Road. They offer a full range of vehicle services including car washes, lubricant and tyre changing with maintenance services available at the Degla Maadi and Obour City sites.

All three sites feature an Adnoc Oasis convenience store, selling a wide range of food and drinks, according to the statement.

Adnoc Distribution opened its first service station outside the UAE in 2018 by expanding into Saudi Arabia. It has more than 570 service stations including 511 in the UAE and 64 in Saudi Arabia as of June 30. It also sells lubricants in 32 countries across the world via distributors.

The company's first-half earnings and revenue jumped on the back of higher fuel volumes and improvements in efficiency.

R evenue in the January-June period rose 4.9 per cent on an annual basis to Dh16.13 billion ($4.4 billion). The company's underlying earnings before interest, taxes, depreciation and amortisation surged 9 per cent year-on-year to Dh1.57 billion.

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Company Profile

Name: Thndr
Started: 2019
Co-founders: Ahmad Hammouda and Seif Amr
Sector: FinTech
Headquarters: Egypt
UAE base: Hub71, Abu Dhabi
Current number of staff: More than 150
Funds raised: $22 million

Real estate tokenisation project

Dubai launched the pilot phase of its real estate tokenisation project last month.

The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.

Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

WRESTLING HIGHLIGHTS

THE SPECS

Engine: 1.5-litre turbocharged four-cylinder

Transmission: Constant Variable (CVT)

Power: 141bhp

Torque: 250Nm

Price: Dh64,500

On sale: Now