Sub-Saharan Africa and potentially Iran key targets for investments
Agility Logistics is pursuing all expansion and investment plans it had put in place for 2016 despite the regional economic slowdown and instability threats.
We have not scaled down or held back on our plans, Bassel El-Dabbagh, Agility CEO for Abu Dhabi, tells MEED.
Most of the planned investments are focused in the Sub-Saharan Africa, and potentially in Iran, where the company sees strong demand growth for logistics services.
El-Dabbagh tells MEED they are prepared to enter the Irani market subject to the lifting of all EU and US sanctions, and to any potential GCC sanctions.
Unlike most of its multinational rivals, Agility said it can take on more calculated risks associated in entering emerging and frontier markets like the Sub-Saharan region. As a company originating from an emerging region, we can take more calculated risks because we know how to mitigate them, he explains. We need not wait for the regulatory framework to be fully developed before we start investing in a new market or region.
A 150,000 square-metre distribution centre based in Ghana, catering to the Sub-Saharan region - a frontier market characterised by underdeveloped infrastructure - is an example of Agilitys latest investments.
However, the main focus for Agility will remain the top emerging markets namely China, the UAE and India. These countries were rated as the most attractive emerging markets for the logistics industry, according the firms 2016 Emerging Markets Logistics Index.
Now on its seventh year, the index ranks 45 emerging economies using parameters that include their economic size and growth, compatibility and connectedness or transport infrastructure, to determine their attractiveness relative to logistics investments.
The UAE ranked second on the overall index, but first on the market connectedness and compatibility sub-indices, each of which accounts for 25 per cent of the overall index compared to 50 per cent allocated for an individual countrys economic size and growth.
The UAEs impressive performance in the index is underpinned by the states regulatory framework that encourages foreign direct investment, specifically through its 34 free trade zones, and the efficiency of its transport infrastructure. The Jebel Ali free zone and port, for example, is located only 15 kilometres away from the Al-Maktoum International airport making for a seamless transport of goods and cargoes, says El-Dabbagh.
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