Kuwait’s Agility, one of the world’s largest logistics firms, plans to invest up to US$100 million on expanding its business, particularly in Africa.
“We are committed to growing our business in various markets and investments,” said Essa Al Saleh, the president and chief executive.
Agility, which operates in 100 countries, wants to expand its footprint in Africa, particularly in Angola, Nigeria, Mozambique and Ghana, said Mr Al Saleh. All four are oil-producing states.
“Africa is a growing market and it is one of our last frontiers,” said Mr Al Saleh.
“We see a lot of opportunities in terms of oil and gas. We see a lot of opportunities in relation to growing economic development and wealth in Africa.”
Most of the investments made this year will be for organic growth rather than acquisitions, he said.
The Middle East and Africa continues to be Agility’s fastest growing region, followed by Asia, Latin America, the United States and Europe.
Agility plans to grow its profits despite the oil price rout, during which Brent prices have almost halved since June.
Oil-producing countries in the Arabian Gulf region and Africa will be affected in the short term by falling oil prices, but in the long term they provide ample growth opportunities, he said.
“They [African countries] may slow down things in the short term, but they will invest and that will have a positive economic development, not only on the oil and gas industry, but even for the wealth of people who live there,” said Mr Al Saleh.
The oil price drop has translated into savings for Agility, but only in single digits – mainly because of airlines’ pricing mechanisms. But savings may increase over time.
“Before they [airlines] would give us a price for shipping cost and for the fuel index,” said Mr Al Saleh. “A lot of airlines are shifting to a single price, which kind of blurs the fuel cost and this is one of the challenges.”
Agility posted an 8 per cent increase in third quarter net profit to 13.4 million Kuwaiti dinars (Dh166.4m) compared with the year-earlier period, mainly driven by its infrastructure business, which grew 16 per cent.
Its global logistics unit contracted by 4 per cent in the third quarter owing to the winding down of major project contracts.
Agility shares on the Dubai Financial Market closed up 11.4 per cent to Dh14.1 yesterday.
Separately, Agility ranks the UAE sixth in its Emerging Markets Logistics Index, which ranks 45 emerging markets states.
Size and growth attractiveness constitutes 50 per cent of the overall assessment. Compatibility and connectedness each account for 25 per cent of the overall score.
“The UAE is doing things that will put it on a trajectory to move up the ranking,” said Mr Saleh.
Such measures include investment in infrastructure, ease of doing business and facilitation of trade.
China ranked first in the index, followed by Saudi Arabia and Brazil.
dalsaadi@thenational.ae
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