The Kanoo Group expects the start of infrastructure projects for the Expo 2020 to present business opportunities for the Abu Dhabi-based diverse business conglomerate amid the economic slowdown.
The Expo 2020 Dubai is expected to attract 25 million visitors, about 70 per cent of them from overseas. The opening of Iran to international investors could also be a boon for business, said the company’s chairman, Mishal Kanoo.
“The only potential bright spot will be towards the end of this year, which is Dubai starting the infrastructure for 2020,” he said. “We have to see what happens with Iran because if Iran does start to open properly … Dubai will be the intermediary between international companies and the investors in Iran.”
The Kanoo Group, which owns businesses from shipping to travel, is interested in being an intermediary between international companies and businesses in Iran and is particularly focused on opportunities in the oil and gas and infrastructure business.
The UAE’s economy is to gain US$13 billion by the easing of sanctions on Iran amid rising trade between the countries, in the time frame from last year to 2018, the IMF said last year.
That is equivalent to a 1 per cent gain in real GDP growth each year over the next two years, said the IMF. In 2013, Iran accounted for 12 per cent of the UAE’s non-oil exports, valued at $12bn that year. Most of this came as re-exports traded through Dubai’s Jebel Ali Port.
Mr Kanoo expects the hospitality and logistics business to continue to grow in the UAE despite the economic slowdown.
“I don’t see travel being affected negatively because people still travel,” said Mr Kanoo. “Logistics and shipping are not going to get worse and in fact it probably will increase with the number of planes and airports and all things booming in this region. The number of hotels also will increase.”
The Institute of International Finance (IIF) expects the UAE’s growth this year to come in below IMF forecasts because of lower spending and low oil prices. The UAE economy is forecast to grow at 2.5 per cent this year, according to the IIF. The IMF, however, had UAE’s growth for this year at 2.6 per cent, compared with its October projection of 3.1 per cent growth.
The Kanoo Group is also looking to snap up distressed assets as a weaker trading environment presents good acquisition opportunities.
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