Impact of global economic crisis on shipping and ports in region and prospects for recovery under spotlight at Middle East Money & Ships conference
Confidence was voiced today (Wednesday 7 October 2009) that the Middle East shipping and port industries, battered by the global trade slowdown and economic turmoil, will “emerge stronger than ever” from the crisis.
“We are weathering the storm,” Mohammed Al Muallem, Senior Vice President and Managing Director of DP World, United Arab Emirates region, told delegates in a keynote address at the Middle East Money & Ships conference taking place at the Grand Hyatt Hotel in Dubai. “I am confident that recovery is on the way and we are much better off than we were at the beginning of this year.”
HE Sheikh Daij bin Salman Al Khalifa, Ministry of Finance Under Secretary for Port Affairs and Chairman of the General Organisation of Sea Ports for Bahrain, said he was “cautiously optimistic” about the future. “There are clear signs of economic recovery in many parts of the world and there are encouraging reports…that the worst is over and there are clear trends of recovery,” he added
Both were taking part in a key debate on the impact of the global economic and trade crisis on shipping and ports in the Middle East and the prospects for recovery at the region’s premier event for senior maritime executives.
Giving an outline of the impact, Sheikh Daij said during the boom period from 2003 to early 2008, the Middle East shipping sector had expanded significantly but had been severely affected by the downturn. He added there had been a 19% fall in the value of orders for new ships from companies in the Middle East last year. In addition, ship repair yards have been suffering from a decline in business since the beginning of the year.
The slowdown had impacted the ports and logistics industries of the region with many leading port operators reporting reduced volumes of business in the first half. Nevertheless, he added: “I have no doubt that healthy competition among the regional ports and provision of high quality service at competitive prices will help bring about resurgence in the shipping industry in the region.”
Addressing the impact on the regionally vital tanker trade, Ahmed Al Falahi, CEO of Gulf Energy Maritime, said the downward trend in the shipping and tanker sector which began earlier this year “does not look like it is abating and, until now, the market is still quite weak.”
Overall, he felt the shipping industry may be among the hardest hit and could even be the last to come out of the slump. He is also concerned about finance from overstretched banks. “Global financial institutions have indicated that approximately US$400-500 billion is needed for ship financing between 2010 and 2012 with estimated cancellations between 10 and 20%,” Al Falahi added.
“Banks will definitely think twice before they lend that amount as freely as they did until 2008. I strongly believe, however, that once the global economy stabilises, this will give enough comfort for creditors to cautiously start lending again.”
Seatrade Chairman Christopher Hayman, who is chairing the Middle East Money & Ships conference, said this is not the first time that the shipping industry has gone through a downturn. “The difference and challenge this time is that it has combined with a financial crisis,” he added. “In addition, there has been a distinct shift in emphasis in industry towards the Middle East and Asia which provides a lot of opportunity as well as challenges for investors in the region.”
Principal sponsor of Middle East Money & Ships is the National Iranian Tanker Company, a private company with one of the world’s most modern fleets of double-hulled tankers. Other sponsors are DNV, an independent foundation with the purpose of safeguarding life, property and the environment; DP World, one of the largest marine terminal operators in the world; Eships, equally owned by Invest AD and Mubadala; the Islamic P&I Club, affiliated to the Organisation of Islamic Conference; Lloyd's Register, which assesses and certifies ships, systems and facilities; and Tufton Oceanic Finance Group, a fund management firm focused on maritime and energy sectors. Supporting organisations are the Baltic and International Maritime Council; the Dubai Maritime City Authority; the Organisations of Islamic Shipowners Association; and the UAE Shipowners Association.
The 2009 Seatrade Middle East & Indian Subcontinent annual regional awards, recognising maritime safety and environment, ship and port operations and security, plus port and shipping business efficiency, will follow this year’s Money & Ships conference. The award’s Gala Presentation Dinner will be staged at Madinat Jumeirah, Dubai, on the night of Thursday 8 October 2009. The gala event is expected to be attended by around 800 senior executives from the region’s maritime industry.
© 2000 - 2019 Al Bawaba (www.albawaba.com)