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PUBLICATIONLICENSED BY IMPZ

ISSUE 15 | MARCH 2013

www.tradeandexportme.comBUSINESS INTELLIGENCE FOR INTERNATIONAL TRADE


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EDITORS LETTE

Aparna Shivpuri Arya,Senior Editor, Trade and Export Middle East

Talk to us:

E-mail: [email protected] Twitter:@TradeNExportME

Facebook: www.facebook.com/tradeandexportme LinkedIn group: tradeandexportme

If youd like to receive a free copy of Trade and Export Middle East every month,

e-mail [email protected] requesting a subscription.

We a knw that feeing when we can nay breathe after

a majr event f ur ife has been dne and srted. S yu

know how I must be feeling after the inaugural Trade and

Export Middle East Excellence Awards. The Awards were

held on the 25thf February at the Habtr Grand and since

I can bw my wn trumpet withut being interrupted

the event was a huge success with close to 200 people in

attendance with the presence f a the tp payers in the

ed f gistics, nance, ega, free znes and business

support services.

We also honoured Dubai Trade and United Arab Bank for their support to us and the

trading cmmunity. It was a prud mment fr me since the magazine and the event

was appreciated by a. Yu see the winners and sme snapshts f the Awardswhen yu turn the pages.

I had as mentined in my previus editria abut my trip t Paris. I was there in

February and even thugh it was freezing, I cudnt hep but fa in ve with the

city. What made it a the mre interesting were the pepe we interviewed. They a

had very interesting stries t te abut hw they are wrking n buiding the trade

and investment reatins with the Midde East whether thrugh the gvernment r

thrugh the private sectr. S dnt frget t read the cuntry fcus n France!

February as witnessed anther big event- the Gufd and s we decided t take

anther k at the fd sectr and tak t the different stakehders. I am sure yu

enjy reading what they had t say.

March as prmises t be a busy mnth as I head t Qatar t cver the World Cargo

Symposiumand then to Abu Dhabi for the World Port Summit. Next month, we focusn Canada, a very imprtant trading partner fr the regin.

As aways, I k frward t hearing frm yu and wrking ut ways t invve yu

with the magazine. S dnt hesitate t drp me a ine.

Till then..

A sigh of relief...Publisher

Dominic De Sousa

Chief Operating OfficerNadeem Hood

Managing DirectorRichard Judd

[email protected] +971 4 440 9126

EDITORIAL

Senior EditorAparna Shivpuri Arya


Contributing EditorsMike Byrne


Tamara [email protected] +971 4 440 9130

Jenny [email protected] +971 4 440 9116

ADVERTISING

Nigel [email protected] +971 4 440 9124

PRODUCTION AND DESIGN

Production ManagerJames P Tharian


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Head of DesignFahed Sabbagh


DesignerFroilan A. Cosgafa IV


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DIGITAL SERVICESwww.tradeandexportme.com

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[email protected]+971 4 440 9100

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Copyright 2013 CPIAll rights reserved

While the publishers have made every effort to ensure theaccuracy of all information in this magazine, they will not

be held responsible for any errors therein.

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tradeta

lk

up

dates NEWS:International news and trends with

domestic trading relevance.

EVENTS CALENDAR: A snapshot of exhibitions

and conferences around the region, which can

help you spend less time planning and more time

attending.

ABOUT TOWN: We bring you coverage from theevents that took place in the month of February.

EXPERT COLUMN: In his column, Raed Safadi,

Deputy Director of the Trade and Agriculture

Directorate, OECD, discusses pressing trade

issues with us, every month.

06

09

10

12

14

18

22

30

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INTERNATIONAL TRADE:Dubai Trade gives us an update about Dubais status

as the trading hub and doles out some interesting bits.

FINANCE: Western Union Business Solution looks at how small and medium-sizedenterprises (SMEs) can protect against foreign exchange uctuations when making

cross-border transactions.

TRADE AND EXPORT EXCELLENCE AWARDS: We hosted our rst Trade and

Export Middle East Excellence Awards 2013to honour the best in the eld of trade.

We bring you the winners and some snapshots of the very successful event.

SECTOR WATCH: Since the Gulfood was the talk of the region, we decided to

take a more in-depth look into the food sector. We bring you the ndings.

ISSUE 15 MARCH 2013

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CONTENTS

30

COUNTRY FOCUS: FRANCE

INVEST IN FRANCE AGENCY:Created in 2001,

the IFA is responsible for promoting international

investments in France. Aparna Shivpuri Arya spoke

to David Appia, Chairman to get his expert opinion.

TOTAL:Aparna Shivpuri Arya met Arnaud

Breuillac, Exploration and Production, President

Middle East, Total, in their Paris headquarters

to get all the interesting details about this fth

largest publicly-traded integrated international oi

and gas company in the world

GREATER PARIS: Greater Paris, is a topic

that has been going on for over a century in

France. The rst greater Paris project started in

1920. As part of a press trip to Paris, Aparna

Shivpuri Arya caught up with Alexandre Missoffe

Director of the Cabinet, Socit du Grand Paris

to get a better understanding of the project.

CDC: CDC Enterprises was set up to develop

and support SMEs and industrial services, based

on a stable and long term strategy. Aparna

Shivpuri Arya met Philippe Braidy, President, CDC

Entreprises, to get to know the details about their

work and mission.

VINCI: We caught up with Alain Bonnot,

Chairman of Vinci Construction Grand Project,to know about their operations in the Middle East

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46

48

46

trade

talk

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Exploring investment

opportunities

UPDATES

GloBAl WATCH

The two-day 2013 Global Financial Markets Forum(GFMF) attracted

1,300 delegates. Michael Tomalin, the Group Chief Executive

of National Bank of Abu Dhabi (NBAD) outlined the economic

strengths and prospects of the UAE for investors. Mr. Tomalin said

Abu investment to diversifying its economy and transition the

contribution of petroleum from 60% of Emirates GDP to 40% offers

substantial opportunities to investors. He said Abu Dhabi Vision

2030 would develop Abu Dhabi to a global inancial.

Abu Dhabi is an enormous opportunity for all, said Mr. Tomalin.

Abu Dhabi is a city that is open to investors, open to you.

Following Mr. Tomalins speech, James A. Baker III, former

US Secretary of Treasury and State and a global statesman,

analysed the global economy.

World economy is recovering from the global recession, said

Mr. Baker. The United States, he said, is growing, however, at a slow

rate. At current growth rate, it will take (the US) years to achieve

full employment.

Mr. Baker called the United States a ticking bomb. The US is

broke, if we didnt have the dollar, we would be Greece, Mr. Baker

said. To bring the debt under control, the US political parties must

agree on a grand bargain on taxes and spending cuts. The economic

and political dysfunction has prevented achieving the grand

bargain, he added.

Noting that Europe has deeper economic dificulties than the US,

Mr. Baker said, Emerging economies are the bright spots.

Leading bankers and economists participated in panel discussions

on inancial markets and banking.

The vast continent of Africa will take centre

stage at the 2013 World Ports & Trade

Summit, which takes place in Abu Dhabi

frm 19-20 March, with a specia fcus

sessin n day tw f the event t examine

opportunities in the region for both trade

and infrastructure development.

Grwth in seabrne trade between

China and Africa is aready beneting UAEprts, as the wrds third argest ecnmy

and the emerging African cntinent rey

n the Emirates trading gateway status,

further bsted by grwth in biatera trade

between South Africa and the UAE, which

was valued at almost USD 2 billion in 2011.

In the rst decade f the miennium,

trade between African countries and the

GCC jumped by 270% t reach mre

than USD 18 billion per annum, and this

shows no sign of slowing down with

added impetus particuary frm the UAE

- generated by gvernment and private

sector investment interest in West and

Centra Africa, fwing successfu frays

into East, South and North Africa, said

Chris Hayman, Chairman f Seatrade.

Regins prts vita cnduit fr Africa-Asiatrade development

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A rise in the number of pilgrims

visiting the Kingdm fr Hajj and

Umrah, are boosting domestic

tourism growth, with Saudi

residents making 22.5 million

overnight trips per annum.Tourism receipts for Hajj

and Umrah currenty accunt

fr arund 3% f GDP and,

accrding t turism fcias,

the cuntry gained a reprted

USD16.5 billion from tourism

in 2012, representing a 10%

increase n the previus year.

The argest hspitaity market

in the GCC, Saudi Arabia

also accounts for the bulk of

international tourist arrivals, at

46% accrding t an octber

2012 GCC Hospitality Industry

Report from Alpen Capital,

representing a 50% year-n-year increase against 2011

gures.

Hte rm suppy in the

Kingdm is expected t increase

at a CAGR f 1.5% between

2011 and 2016, increasing

from 243,117 rooms in 2011

to 262,049 in 2016, with 69

prpert ies currenty in the

planning or construction phase.

UPDATES

REGIoNAl TAlK

PPPs the way forward forGCCs health sector

AIG launchesits trade credit

product in theUAE

In the years to come, growing healthcare

spending will impose a hefty burden on Gulf

Cooperation Council (GCC)Governments. As we

enter 2013, healthcare costs continue to increase

in the region partly due to the high prevalence

of chronic diseases. Today, thanks to systemic

transformation, strategic planning, and population

screening programs, GCC governments recognise

that the current model in which the state

shoulders most of the direct healthcare costs is

unsustainable over the long term. In light of this,

management consulting irm Booz & Company

found that these governments must use a Public-

Private Partnership (PPP) approach in order to

tame expenditure, improve quality of service, and

provide further access to expertise.

While expenditure is currently below

international benchmarks when compared

to developed countries on a per capita basis,

this will undoubtedly change, explained Jad

Bitar, a Principal with Booz & Company. As a

result, governments will logically seek more

private-sector participation, but this must be

introduced in a controlled manner.

A healthcare sector model indicates that

the public sector is responsible for regulation,

licensing, and monitoring. In turn, the private

sector can provide services with commercial value

such as cardiac surgeries and medical equipment

manufacturing.

Services that are the furthest from patient

contact and with the greatest commercial value

are well suited for PPPs. Services with mostly

social value, such as health education for the

population, should be retained in the public

sector.

AIG, has launched its trade

credit product in the UAE.

AIG has been underwriting

this class of business globally

for over 40 years. AIGs

product suite goes well

beyond conventional credit

insurance and offers a range

of solutions for companies

of various sizes. The UAE is

seen as the ideal launch pad

for Trade Credit insurance

in the Middle East due to

its accelerated GDP growth,

its perfect geographical

positioning making it a

thriving export market, its

reasonably stable economy

and political environment.

Additionally, the existing

local AIG entity, in operation

for several years, offers theright infrastructure and

support to the organisations

growing trade credit

footprint.Saudi hspitaity sectr wrthUSD 18.1 biin by 2016

$16 .5BILLION

revenue for KSA from tourism in 2012

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COMMUNITY

EVENTS CALENDA

Save the date!We knw that yu are a busy trader with a demanding events diary. Therefre, we are prviding yu with a snapsht fexhibitins and cnferences in the regin and arund the wrd, s yu spend ess time panning and mre time attending.

Date Event Location

March

2 - 5 Seminar - Cnvert Natura Gas Doha

4 Guf Exp-Qatar Doha

5 - 7 Paperworld Middle East Dubai International Exhibition & Convention Centre

10 - 13 MEoS-Midde East oi and Gas Shw and Cnference Bahrain International Exhibition Centre, Manama, Bahrain

13 - 14 Midde East Gespatia Frum 2013 Qatar Natina Cnventin Center

17 - 21 Secnd Turbine Machines Midde East Sympsium Doha

31- 04 Apri Saudi Travel and Tourism Market Riyadh Internatina Exhibitin Centre, Riyadh

31 March - 2 Apri Wrd luxury Exp Dha Doha

Date Event Location

April

1-4 Kingdm Airprts, Aviatin and lgistics Summit Riyadh

2 - 4 Dha Carbn and Energy Frum 2013 Doha

1 - 6 Qatar Career Fair 2013 Doha

15 - 16 Business and Investment Frum in Qatar - Berin (TBC) Doha

22 - 25 ICC WCF 8thWorld Chambers Congress Doha

3 - 6 GITEX Shpper 2013 Dubai

16 -17 The Internet Show 2013 Dubai

30 - 03 May Arabian Travel Market 2013 Dubai

May

May Cnference and Exhibit in, Qitcm 2013 Doha

6 - 8 Airport Show 2013 Dubai

6 - 9 Energy Qatar Doha

6 - 9 Makinat Qatar Doha

6 - 9 Prject Qatar Doha

6 - 9 Qatar StneTech Doha

6 - 9 Heavy Max Doha

8 - 9 Workshop Customer Services Doha

14 - 16 QITCoM Cnference And Exhibitin Doha

15 - 17 The Hotel Show Dubai

26 - 29 Saudi Energy Riyadh

27 - 29 Cityscape Qatar Doha

June

4 - 6 CHRVI Qatar Doha

11 - 13 Automechanika Middle East Dubai

13 - 14 34thSession of the Ministerial Council for OPEC Fund for Internat ional Doha

18 - 23 Ind ia Prperty Shw Dubai

18 - 23 Ind ia Prperty Shw Dubai

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Exporta, the global inancial services information provider, returned toDubai for the 10thsuccessive year to hold itsAnnual Middle East Trade& Export Finance Conference, which took place at the Jumeirah EmiratesTowers Hotel as part of the Middle East Trade Finance Week. We bring you asynopsis of the discussions.

Discussions centred on a range of

topics, including growth forecasts

for corporates and banks alike,

the changing political risk environment

post-Arab Spring, ongoing challenges in

maintaining liquidity and optimising working

capital, infrastructure and project inancing

requirements, as well as considering the

overarching question as to whether the

regions global inluence is still determinedby its role as a commodity exporter.

One of the key issues identiied over the

course of this event is the tremendous will

and appetite for doing business, establishing

the GCC as a global commodity hub and

increasing business lows with thriving

markets such as Asia and Africa, whilst

still maintaining close ties with traditional

trading partners such as Europe and the

US, says Jeff Ando, Head of Conference

Production for Exporta Events. One of the

overriding impressions we believe delegates

will have taken away is the desire to drive

things forward, to explore the various

inancing options available for maximising

the regions potential.

The reiterated commitment to Asia

and Africa was a central theme, with

continued focus on Dubai as a hub from

which commodities dominate trade lows,while sanctions were identiied as being a

major concern for a banking sector keen to

avoid falling foul of compliance regulations.

Meanwhile, although it was noted that local

banks are illing some of the gaps left by

European banks leaving the region, further

funding options for the corporate sector are

still required.

One of the core beneits of hosting

such a well established event is the long

standing relationships enjoyed with senior

market leaders, with many of the most

established and internationally recognised

multinationals in regular attendance,

said Peter Gubbins, Managing Director

of Exporta. This combined with the

outstanding support provided by the Dubai

Multi-Commodities Centre (DMCC) and

Dubai Trade (part of Dubai World) further

demonstrates the calibre of support this

event enjoys.

As a Government of Dubai authority

established to drive forward the competitive

advantages Dubai enjoys as a global trading

hub, the DMCC has been particularly

successful with its mandate to stimulate

commodity lows, most recently through its

central registry of commodity ownership,

DMCC Tradelow. Our goal is to ensure

sustainable regional inancial and commodity

markets that are both transparent and

liquid. The focus is now on fostering the

development and growth of trade for those

expanding into new markets, said Malcolm

Wall Morris, Chief Executive Oficer of

DMCC. Dubai is perfectly positioned at the

crossroads of these markets.

The event concluded with the oficial

launch of the ICC Regional MENA BankingCommission on the afternoon of Tuesday

February 19, a joint venture between the

International Chamber of Commerce and

the Dubai Chamber of Commerce & Industry,

established to extend the reach of the ICC

Banking Commission within the MENA

region. Key speakers included H. E Hamad

Buamin, Director General, Dubai Chamber

of Commerce & Industry and Kah-Chye Tan,

Chairman, ICC Banking Commission.

Lets talk inance

ABOUT TOWN

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Gulfood 2013 was held from the 25th-28thFebruary in Dubai and provided an

excellent platform for countries to highlight their food products and explorebusiness opportunities in the region. We bring you a synopsis of the event.

Gulfood Exhibition and Conferences

2013 (Gulfood 2013) was

inaugurated on 25thFebruary 2013

by H.H. Sheikh Hamdan Bin Rashid Al Maktoum,

Deputy Ruler of Dubai and UAE Minister of

Finance, in the presence of H.E. Sheikha Lubna

bint Khalid Al Qasimi, UAE Minister for Foreign

Trade, country ministers, ambassadors and

dignitaries from around the world, highlighting

the importance of the worlds largest annual

food and hospitality trade event.

Spanning over 100,000 square meters of

space, the Gulfood 2013saw the participation

of 4,200 exhibitors with the biggest European

showcase and the largest South American

presence. More than 110 foreign country

pavilions were set up at the Dubai World

Trade Centre. All of them exhibited different

varieties of food items, beverages, restaurant

supplies, hospitality services and other

related food equipments.

The Gulfood 2013 Conferences, a series

of four key summits, commenced also on

25th February 2013 with H.E. Sheikha Lubna

addressing senior executives of global food

and beverages companies, dignitaries and

trade professionals at the Global Food Leaders

Summit. The forums organised during the

rest of the conferences days included Food

Packaging & Processing Forum, Food Inspection

Conference and Franchising Workshop.

The whole exhibition was attended by over

60,000 qualiied business visitors. Attendees

could also participate in the Baking andPastry Guild Competition as well as attend

the corporate award ceremonies. In addition,

many professional chefs used this opportunity

to highlight their skills to a large audience.

At a press conference organised prior to

the Gulfood, H.E. Hamad Buamim, Director

General, Dubai Chamber of Commerce and

Industry (DCCI) stressed the importance of

the food and beverage sector for the growth

and development of UAEs economy. With

the value of food consumption in the UAE

expected to have reached AED 28.2 billion in

2012, he said this was forecasted to increase

to AED 32.6 billion in 2013.

Adding to this, Rashid Ahmed Al Teneiji,

Director of Government Communications at

the UAE Ministry of Foreign Trade said, The

UAEs food exports, which totaled AED 15.8billion in 2010 increased by 10% to reach

AED 17.5 billion in 2011. Gulfood contributes

signiicantly to this growth by not only

providing promising business opportunities to

the global food industry but also proving to be

an excellent platform for UAE companies to do

business abroad. The presence of a dedicated

UAE pavilion for the irst time at the show is an

indication of the countrys development in the

F&B industry as it moves up the value chain.

When we asked some of the countries, abou

the importance of an event such as the Gu

Food, Nawal Benzaid, Agriculture and Agri-foo

Counselor, MENA region, Trade Commission o

Canada, said Gulfood is important for ou

Canadian companies which are interested i

the Middle East and North Africa market an

want access to South Asia market. The fooopportunities are growing in this part of th

world and with the large expat community

the demand for sophisticated and diversiie

products is increasing. It is a region that is ver

dependent on food import and Canada export

over 70% of its agriculture and agri-food. Th

opportunities are huge from commodities t

specialty gourmet products.

The event was a huge success and we hop

it will come back bigger and better next year.

The different lavours

H E Hamad Buamim Director General Dubai Chamber of Commerce

and Industry speaks at the Gulfood 2013 Press Conference

AED 32.6 billionvalue of food consumption in 2013

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The Arab region needs to identify new andsustainable sources of growth, create moreand higher-paying jobs, and absorb increasing

numbers of university graduates into thelabor market. Raed Safadi,OECD, speaks tous about how trade can be used for creating

jobs in the Arab region.

The earlier development

paradigm that had insulated

national economies from

world markets has failed to achieve

the qualitative and quantitative

growth expected by the population.

Harnessing the forces of international

trade and investment is a key medium

to long term policy lever available

to policymakers to decisively and

sustainably respond to the joblessness

problem, especially among the youth.

Integration into world markets for

goods, services and ideas has provento be a potent recipe contributing

to growth and better employment

outcomes in developed, developing

and emerging economies alike.

Trade promotes production eficiency

via specialisation, exploitation of

economies of scale, and technology

transfer, as well as enhanced competition.

Openness helps economies to compete

by not only offering new opportunities

for sales (i.e. exports), but also making

available to producers the widest range

of inputs at the highest quality and

lowest prices (i.e. imports). According to

the World Bank, in the 1990s per capita

real income grew more than three times

faster for those developing countries

that lowered trade barriers (5.0% per

year) than for other developing countries

(1.4% per year). Turkey too managed

to create more than three million jobs

through a process regulatory reform and

free trade agreement with the European

Union.Productivity growth is at the heart

of economic progress. At the sectoral

level, more productive irms expand

as trade drives more resources

towards them; at the same time,

relatively unproductive irms contract

or exit from the market altogether.

Increased competitive pressures

induce organisational change and

production upgrading, which in turn

Harnessing trade forjobs in the Arab region

EXPERT ColUMN

TRADE TALK

12 MARCH 2013


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boost within-irm productivity. Overall, the

long-term evidence from a broad sample of

countries indicates that an increase of 10%

in trade exposure (trade as a percentage of

GDP) was associated with a 4% increase

in output per working-age person. To the

extent that wages are linked to productivity

growth, greater openness also means a rising

standard of living.

The opportunities for creating more and

better jobs in the Arab appear to be large

,not least, given the fact that the region

is the least integrated with the world

economy. The region receives only one-

third of the FDI expected for a developing

region of comparable size, and most is

concentrated in a handful of countries.

Global inancial integration also lags behind

that of other developing countries. Portfolio

investment is virtually nonexistent because

of the poor state of equity markets. The

number of Arab countries adhering to IMF

Article VIII provisions, which generally

signiies full current account liberalisation,

is proportionally lower, at one-third of the

total, than in other regions.

Overall, inancial markets in the Arab

region remain fragmented and dominated

by traditional banking activity. In many

cases, banking systems remain under publicownership or control with considerable

exposure to government debt, weak

regulatory and enforcement capacity, and

insigniicant links to international capital

markets. With minor exceptions, equity and

debt markets, insurance, leasing, and long-

term inancing remain weak and de-linked

from the international market.

The Arab regions trade performance

is also below that of other regions: oil

exports continue to dominate the total

from the region, while non-oil exports,

on the whole, grew at a slower rate than

for all developing countries. As a result,

the Arab regions share in world export

markets fell by more than half in the 20-

year period between 1990 and 2010; the

regions total exports in 2010 amounted to

USD 826 billion (of which 72% is oil and

gas), an amount comparable to the combined

exports of the Netherlands and the UK.

It is also the case that intra-regional

trade and investment lows have been

very limited, at 6% or less of their total

trade. Similar igures for the European

Union are 60-65%, and, in Asia, about 60%.

Furthermore, although the geographicaldistribution of FDI lows among Arab

countries is not well documented, it appears

that most of regional investment outlows

go outside the area.

While openness to trade and investment

impacts employment positively, those

beneits do not necessarily materialise

immediately and tend not to be distributed

evenly. This makes it necessary to manage

the adjustment costs associated with trade

liberalisation, a point that is especially tru

for workers, households, and communitie

that are unable to harness marke

opportunities because entry costs ar

prohibitively high. A major factor to tak

advantage of the opportunities from trade i

education. Globalisation and technologica

progress continue to shift labour deman

towards adaptable workers with a hig

general level of education and the abilit

to continue learning throughout thei

professional life. This requires investmen

and strategies for education and ski

policies that take into account the changin

labor needs of the world economy.

Smooth adjustment requires that a

economy have several components in place

Infrastructure needs to be of suficientl

high quality to ensure that the growth o

existing and start-up businesses is no

thwarted by bottlenecks in transportatio

and communications. Competition polic

and eficient markets are needed to preven

large irms from abusing their marke

power or obtaining special treatmen

from the state. Financial markets need t

be suficiently developed to fund new an

expanding businesses, and to deal wit

the high rate of failure among start-upand small businesses. Regulations shoul

provide appropriate oversight withou

imposing onerous time and resource cost

either entry or exit. The legal system has t

function so that property rights are well

established and bankruptcy and busines

failure can be accommodated. The rule of law

must ensure that graft, corruption, and othe

forms of criminal activity dont disadvantag

the businesses that play by the rules.

ABOUTRaed Safadi is the Deputy Director of the Trade andAgriculture Directorate of the OECD. Prior to assuminghis current position in 2009, he was the Chief Economist

for the Government of Dubai.Dr. Raed specialises in the empirical and policy analysisof international trade. Dr. Raed has previously workedfor the World Bank and as a consultant for numerousgovernments, regional development banks and UNagencies.

$826millionregions total export in 2010

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Dubais vast growth and developments have lead to welcoming global trade intoits shores due to its unique geographical location, outstanding infrastructureand seamless processes. Dubai Trade gives us an update about Dubais status asthe trading hub and doles out some interesting bits.

Dubai Trade fore sought the need

for trade process simpliicationthrough re-engineering the end-to-

end trade supply chain and application of

technology. It has taken the responsibility

of facilitating the trade and logistics

operations in Dubai in an effort to become

the worlds best practice model and present

Dubai as their irst choice for doing business

across the globe.

In 2006, Dubai Trade was launched as

an independent department under Dubai

World and remarkably evolved into an

independent Dubai Free Zone company.This marked the beginning of Dubai Trades

transformation from an online service

provider to becoming a trade facilitation

entity aiming to streamline the trade

processes in Dubai.

The foundation of Dubai Trade was

built upon the need of trade facilitation to

enhance trade processes for the beneit of all

stakeholders. It aims to give visibility to trace

the trade logistics chain, link all stakeholders

under a single window to achieve end-to-end

trade integration as well as continuouslyinnovative e-transformation initiatives.

Dubai Trades stated vision is to

transform the trade supply chain and make

trade faster, easier and more cost effective.

After the introduction of e-Services, Dubai

Trade Portal paved the way to improve

the day-to-day business transactions.

The migration from paperwork to online

channels has revolutionized processes,

eliminated physical visits and contributed

Talk to the expert

INTERNATIONAL TRADE

TRADE TALK

14 MARCH 2013


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towards a greener environment.

Furthermore, the improvement in the

adaption of e-services built upon the

application of the latest technologies on

Dubai Trade Portal is proof of the steadfast

execution of the vision of the leader H.

H. Sheikh Mohammed Bin Rashid Al

Maktoum, Prime Minister and Ruler of

Dubai, of a paperless future for government

transactions.

The Dubai Trade Portal is the single

window for trade and cargo movement in

Dubai and has been on a continuous growth

curve and currently provides services for

traders, shipping lines and agents, clearing

and forwarding agents, hauliers, and free

zone licensees. The portal offers over

750 e-Services that span all key activities

ranging from marine services, manifest and

cargo handling services, cargo clearance

and haulage services to invoicing and

payment services and Free Zone services.

In 2012 alone, Dubai Trade has welcomed

over 21,000 new companies to its fold.

The Portal now caters to facilitating the

daily operations of over 72,000 registered

companies, providing a streamlined low of

online services designed around customer

needs and targeted at simpliication of trade

processes.

Rosoom, the highly secure, lexible and

innovative payment gateway, complements

Dubai Trades e-Services platform, which

allows importers and exporters, shipping

agents, freight forwarders, clearing agents

and haulers to initiate and complete online

all the procedures and processes, including

payment, for the various services and

facilities offered by DP World, Jafza and

DMCC. This is done via a single window

which is shared between users and all

concerned authorities, allowing for swift,trouble-free and cost effective operations

for both clients and authorities.

Rosoom offers users multiple online

payment options, covering credit, debit and

prepaid cards such as e-Dirham, to facilitate

payments in a safe and secure environment.

Dubai Trade has also integrated Rosoom

with the online payment systems of several

key banks internationally and locally,

making it easier and more secure for trading

clients of these banks to use the solution.

Additionally, Dubai Trade has recently

developed a highly innovative online

payment solution that combines the

convenience and ease of use of payment

cards with higher security and real-time

management of payments. The new,

customisable Rosoom Wallet, which will

be launched soon, will offer managers a

high degree of lexibility and security in the

management and control of payments.

Rosoom became a major success for

Ports and JAFZA customers followed

by the increased adoption of many key

services. Recording over AED 1 billion in

online payment collections across 1 million

transactions conducted via the payment

gateway.

The time-saving eficiency of the

e-Services developed by Dubai Trade and its

stakeholders, is leading to billions of dollars

in annual savings for the entire trading

community and the economy as a whole.

According to a recent independent study

carried out by the Emirates Competitivenes

Council(ECC) these process re-engineerin

initiatives have potentially led to tota

savings of AED 148 billion (more than USD

40 billion) over ive years ending 2011

which accounts about 17% of the UAE

2009 GDP.

Not only has Dubai Trade saved billion

of dollars in the past ive years, but it ha

also climbed up with rankings of The Worl

Banks Doing Businessreports. Accordin

to the Doing Business report 2008, th

UAE was ranked the 24th Trading Acros

Borders topic. In 2013 the UAE ranked 5t

and has maintained its global ranking i

the top ten in the past four years. As UA

continues to be a world leader in facilitatin

trade, despite stiff competition from othe

world economies, the UAE retains it

position as number one in the MENA region

Rendering a recent report by CNN

Dubai has transformed trading in the UA

through the construction and expansion o

the Rashid and Jebel Ali ports. Dubai ha

ABOUTDubai Trade FZE has set an important benchmark for excellence in trading for theregion as a whole, with its online portal www.dubaitrade.ae offering seamless tradeflow for Dubais vast trading community. More than 800 e-services of DP World,

Economic Zones World, Dubai Customs and Dubai Multi Commodities Centre, inaddition to several leading banks are integrated under the Dubai Trade umbrella.For more information, please contact [email protected]

15MARCH 2013


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leaped up the rankings of the worlds busiest

container ports by volume. In 2007, Dubai

ports handled a ground-breaking 10 million

TEU within a single year and upgraded JebelAlis port to handle a capacity of up to 14

million TEU.

Moreover, with the immense growth of

the trading community, one of Dubai Trades

initiatives was to offer training from the

experts themselves. The training initiatives

cover two distinct areas. One of which is

e-Services, where Dubai Trade offers speciic

training for its customers and users about the

services offered by its partners through the

portal. And certiication courses, the highly

popular CTLP (Certiied Trade and Logistics

Professional) programme. All training sessions

are accredited by the Knowledge and HumanDevelopment Authority (KHDA).

CTLP is the regions irst comprehensive

vocational training program, endorsed

by The Chartered Institute of Logistics &

Transport (CILT) that covers the end-to-end

process of import and export in the UAE and

the region. It is a professional development

certiication course that explains in detail

the business concepts and processes related

to all stakeholders involved. Traders,

TRADE TALK

Shipping Agents and other companies and

entities have successfully completed the

programme with over 200 graduates in

2012.

Dubai Trade aims to bridge a knowledge

gap of trade and logistics by providing

training programmes that compass

practical awareness and the skill required

for companies involved in the trade supply

chain in the UAE and the region. And with

the great success that followed CLTP, Dubai

Trade introduces the Certiied Customs

Broker (CCB), a professional development

course that covers the Customs laws and

procedures that will allow the learners

to be conversant in the Customs laws,paperwork and practices which will help

them with the import and export processes.

With the pace of growth of Dubai as

a driver, Dubai Trade will always be on

the fast-lane paving towards its vision

and continuously dedicating efforts

to advancing trade facilitation and

streamlining processes in its aim to

establish Dubai as the leading trade and

logistics hub of the world.

AED 1 BILLIONonline payment collections across1 million transactions conducted via the

payment gateway

Sources: DP World; Britannica; Dubai Trade; Dubai Statistics; World Shipping Council and CNN.

INTERNATIONAL TRADE

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Western Union Business Solutions, looks at how

small and medium-sized enterprises (SMEs) canprotect against foreign exchange luctuations

when making cross-border transactions.

FINANCE

TRADE TALK

Currency volatility is a big concern

for businesses that need to make

international payments, whether

for imports/exports, payroll or logistics. A

sudden shift in an exchange rate can hit the

value of a proitable deal or even in extreme

cases turn it into a loss-maker. Attempting

to understand and constantly monitor

currency markets can be a real headache

for business owners; but knowing how to

properly manage currency risk without

the headache is a real asset, any not as

dificult as one might think.

The importance of managing currency

fluctuation can be seen just by looking at

the Euro-Dirham exchange rates since the

start of 2012. In this period, the exchangerate has varied from a low of AED 4.43

and a high of AED 4.94 to the Euro. These

currency fluctuations can have a significant

impact on a companys profit margins. It

is for this reason that, after several years

of austerity in an increasingly globalised

market, businesses and SMEs have had

to become savvier in order to minimise

costs and remain competitive against their

peers.

So, the question stands, what can you do

to hedge against currency risk?

There are a number of cost-effective tools

and new techniques available for SME that

wish to manage their currency risk. By

implementing some of these tools, small

business owners can build an effective

international payments strategy that will

help to protect their companys inances

in what looks to be an uncertain market in

2013.

FORWARD CONTRACTS

A forward contract is one of the simplest

and most effective tools available for SMEs.

It is a very straightforward product that

allows you to buy or sell a foreign currencyat todays market price, delaying the

settlement of the contract to some future, or

forward, point in time. It means that SMEs

can lock-in a particular foreign exchange

rate for an extended period of time (e.g.

12 months) and settle upon delivery at

an agreed date. A forward contract is no

different than a standard currency trade,

other than the fact that the settlement date is

pushed forward into the future. The forward

Dealing withcurrency risk

18 MARCH 2013


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rate is also adjusted slightly to account for

the interest rate differential between the

two currencies in question.

The ability to set a budget in advance is

a key beneit of using forward contracts.

Moreover, if you see an attractive exchange

rate that is better than what has been

budgeted for, there is the opportunity to

lock-in that rate for a 12 month period,

which means there could be an unbudgeted

foreign exchange gain a great bonus for

any business.

There is one obvious downside to

using a forward contract. On the day of

settlement, you are obligated to settle at

the predetermined price. This means that

there is a chance that the market rate on the

day of settlement is more favourable than

the predetermined forward rate. Whether

or not that risk is worth taking is of course

up to individual choice and circumstance.

With todays volatile market showing no

signs of abating, however, many businesses

are opting for some level of exchange rate

certainty to protect against a sudden and

damaging luctuation.

The bottom line is that ixing an exchange

rate in advance eliminates exposure to

volatility. Whether or not that will bevaluable is of course something for each

business to determine for itself.

STOP-LOSSES

A stop-loss is a tool for an SME that knows

what their worst-case-scenario exchange

rate would be for a specific payment,

and allows them to protect against it. By

employing a stop-loss on a particular

payment, SMEs can place an order on the

market which is fixed at the worst-case-

scenario price. The chosen payments

service will monitor the exchange rate and

can automatically sell when the foreign

exchange rate hits that price. This will help

to ensure that the businesss bottom line is

protected, as it will have already budgeted

for the least-favourable price.

The advantage of a stop-loss is that it allows

for some degree of lexibility while insulating

against the worst effects of a negative rate

movement. It is a product worth considering

for SMEs that would prefer to monitor the

market as it allows them to do so with what is

basically a inancial safety net that will keep

them from hitting the loor should a currency

begin a downward run.

FUTURE PAYMENTSCash is king in the current inancial markets

and with credit availability scarce and SMEs

need to be aware of alternative sources of

cash for when they need it. This is where

future payments come into play as another

useful FX tool.

A future payment is rather similar to a

short-term forward contract, except it is more

payment-speciic. For example, by setting

up a future payment, an SME can receive a

short-term cash injection. This is then set a

an agreed exchange rate and settled within

90-day period. The big advantage of a futur

payment is that it both protects agains

currency luctuation and boosts cash low

making it a strong tool for businesses tha

need access to funds while waiting for stoc

that they know will be delivered.

Making use of some or all of thes

tools will allow treasurers to develop an

execute a robust currency risk managemen

strategy that reduces exposure to currenc

luctuations. The three examples outline

above are tools our clients use to manag

costs and protect proit margins two issue

with which business leaders will of course b

familiar. Some are probably also familiar wit

at least some of the products mentioned her

and may have been using these and simila

tools to manage currency risk for a numbe

of years. The nature of market volatility ha

not changed, but the suddenness and degre

of that volatility has certainly become mor

pronounced since the credit crunch and star

of the global inancial crisis. The busines

world has become more globalised and tha

does not look set to change. By mitigating an

minimising their exposure to currency risk

SMEs will help to ensure that they remai

competitive.

*This article has been prepared solel

for informational purposes and does no

purport to provide any financial, investmen

or professional advice. It does not in any way

create binding obligations on Western Unio

Business Solutions, a Western Union Company

Western Union Business Solutions makes n

representation, warranty or condition of any

kind, expressed or implied, in this article.

A forward contract is one of the simplest and most effectivetools available for SMEs. It is a very straightforward product

that allows you to buy or sell a foreign currency at today'smarket price, delaying the settlement of the contract to somefuture, or forward, point in time.

ABOUTWestern Union Business Solutions enables companies of all sizes to send and receiveinternational payments and manage foreign exchange, creating unique solutionstailored to suit their FX needs. Western Union is a leading nonbank provider ofbusiness payments, operating its Business Solutions services through locally licensedaffiliates and partners in 29 countries. Supported by a network of trading offices,strategic banking relationships and a proprietary global clearing network, businessescan send cross-border payments in more than 135 currencies.

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AWARDS

TRADE TALK

Trade is the cornerstone of this region and makes

a very large contribution to the GDP of these

economies. With the motto ofStrive, Achieve and

Inspire the awards were our attempt to recognise and

honour those who work towards making trade simpler andfaster. It is about those organisations that strive to be the

best, achieve it and inspire others through their work.

There were 18 awards given in ive major categories-

inance, free zones, legal, business support services and

warehouse and logistics.

The event opened with a welcome speech by the Senior

Editor of the magazine, Aparna Shivpuri Arya. Speaking

about the magazine, she said, There has been a lot of

interest generated through our country focus events that

we started last year and we are looking forward to a packed

year ahead. It has given us the opportunity and the privilege

to present these countries to potential and existing tradingpartners & businesses in the region.

The opening remarks were given by Nigel Rodrigues

who is the COO of CPI. He highlighted the importance

of trade in the region and the roadmap ahead for the

magazine. H. E Saed Al Awadi, CEO, Dubai Exports, gave

the keynote address and spoke about the importance of

trade in the region.

The inaugural Trade Middle East Awardswere held on the 25th f February

at Habtr Grand, t recgnise and hnur the best in the ed f trade.We bring yu the winners wh did us a prud that evening.

HONOURING

EXCELLENCE IN TRADE

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Al Futtaim Logistics

Established in the 1930s, Al-Futtaim operates collectively over 85 companies

bearing the Al-Futtaim name and encompasses such sectors as commerce,

industry and services across the UAE, Bahrain, Kuwait, Qatar, Oman, Saudi Arabia,

Syria, Pakistan, Sri Lanka, Singapore, Malaysia and Europe.

Emirates SkyCargo

Emirates SkyCargos leet includes ten freighters (one Boeing 747-400F, two

747-400ERF and seven 777Fs) that now serves 129 destinations in 75 countries

on six continents.

In December 2012 Emirates SkyCargo took delivery of its seventh Boeing 777F.

Scheduled freighters now operate to 39 destinations.

Air cargo servicesprovider of the year

Warehouse and material handlingcompany of the year

WAREHOUSING AND LOGISTICS

DP World

DP World operates over 60 terminals across six continents, with container

handling generating around 80% of its revenue. In addition, the company currentlyhas 11 new developments and major expansions underway in 9 countries.

DP World aims to enhance customers supply chain eficiency by effectively

managing container, bulk and other terminal cargo. Its dedicated, experienced and

professional team of more than 30,000 people serves customers in some of the

most dynamic economies in the world.

Sea port of the year

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The Links Group

The Links Group, established in 2002, is a premier company formation

specialist that advises corporations and individuals how to best establish a legal

commercial presence in the Middle East. With more than 40 combined years of

experience in the region, A Dubai SME 100 company, The Links Group is also the

only corporation of its kind to be associated with the Foreign Investment Ofice

(FDI) of the Dubai Economic Department.

DHL

Founded in San Francisco more than 40 years ago by 3 budding entrepreneurs

- Adrian Dalsey, Larry Hillblom and Robert Lynn - DHL has continued to expand

at a phenomenal rate. Today, it stands tall as the global market leader of the

international express and logistics industry.

A global network composed of more than 220 countries and territories and

about 275,000 employees worldwide offers customers superior service quality

and local knowledge to satisfy their supply chain requirements.

Euromonitor

Euromonitor International has established a strong presence in the Middle East

over the past 5 years. Their robust research methodology, supported by 800

researchers and in-country analysts across 80 countries has distinguished them

as the world leader in strategy research for consumer markets. Their passion for

client support combined with the unique capabilities they offer has developed a

high proile client base in the region.

Logistics best practicefirm of the year

Online trade/marketinformation portal of the year

Company formation firm of theyear & Consulting firm of the year

WAREHOUSING AND LOGISTICS

BUSINESS SUPPORT SERVICES

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BUSINESS SUPPORT SERVICES

FINANCE

Regus

Regus is the worlds largest provider of workplace solutions, offering the widest

range of products and services that allow individuals and companies to work

however, wherever, and whenever they need to. Regus operates over 1200

Business centres across 550 cities in 95 countries. Products and services include

fully equipped ofices, world-class business support services, meeting conference

and the largest network of public videoconference rooms.

Western Union

Western Union Business Solutions enables companies of all sizes to send and

receive international payments and manage foreign exchange, creating unique

solutions tailored to suit their FX needs. Western Union Business Solutions is

a leading nonbank provider of business payments that offers services in 30

countries around the world. Supported by a network of trading ofices, strategic

banking relationships and a proprietary global clearing network, businesses can

send cross-border payments in more than 135 currencies.

Foreign exchange house of the year

Office set up firm of the year

Abu Dhabi Commercial Bank (ADCB)

ADCB has increased their market share in UAE in the Local Corporates and SME

segment focusing on UAE and India Trade lows. Their innovative approach

to Trade Finance requirements in terms of product offering covering both

Documentary Credit and Open Account provides Clients a complete solution for

their working capital requirements.

ADCB continues to provide innovative trade products along with their online

Trade platform ProTrade as a complete trade partner to support their clients.

Trade finance bank of the year

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Euler Hermes GCC

They are the worlds leading provider of credit insurance solutions. With over 100

years of experience they have earned trust of their clients around the world.

Credit Insurance protects your business from non-payment of commercial dept.

It makes sure that your invoices will be paid and allows you to reliably manage

commercial and political risk of trade.

Trade credit insuranceprovider of the year

FINANCE

Noor Islamic Bank

Established in 2008 in Dubai, Noor Islamic Bank is a full service bank delivering

the broadest range of products for its customers, with an emphasis on unique and

personalized services. Noor Islamic Banks products and services are governed by

a Sharia Board, comprising leading Islamic scholars with extensive experience and

expertise in legal, inancial and banking-related matters.

Zurich

At Zurich we have over 140 years experience of protecting our customersagainst the unexpected and we pride ourselves on providing high quality

insurance solutions to customers in more than 170 countries. Zurich has been

serving customers in the Middle East for over 25 years. Our commitment to the

region has seen us expand our business and we now provide General Insurance

solutions to customers in Oman, Kuwait, Lebanon, Bahrain and the UAE.

Marine cargo insuranceprovider of the year

Islamic finance bank of the year

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Jebel Ali Free Zone (JAFZA)

Jebel Ali Free Zone (Jafza) is one of the worlds leading free

zones. Established in 1985, Jafza is today home to over 6,900

companies, including over 100 of the Global Fortune 500

enterprises. It is a leading driver of the burgeoning UAE

economy contributing over 40% of Dubais net FDI. Jafza is

the regions most eficient logistics hub and the only one in the

world located between a top container terminal (Jebel Ali Port)and a top international airport (Al Maktoum International

Airport), enabling the best multi-modal connectivity.

Ras Al Khaimah Free Zone(RAK)

RAK FTZ is a gateway to emerging markets with 6,000

companies from 106 countries. The easy and simple

procedures have made RAK FTZ the irst choice by SMEs

from around the globe. Since 2000 RAK FTZ has grown

and they continue to improve our products and services

and strengthen their positioning as a business hub geared

at helping SMEs connect to emerging economies. Opening

their UAE and international ofices was another step for us

to facilitate ease of doing business for their clients. They no

longer have to travel to Ras Al Khaimah to get information

or register a company; they come to them to save them time

and money.

Free zone for attractingmaximum investment

Free zone for ease ofdoing business

FREE ZONES

FREE ZONES

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United Arab Bank

Incorporated in 1975, United Arab Bank (UAB) is a serious

player in a competitive market where more than 50 lenders

compete for about 7 million customers.

Based in Sharjah and operating with 20 ofices and branches

throughout the UAE, the Bank offers its clients tailor-made

inancial services in both corporate and retail banking, and

has mainly established itself as a leading solutions providerfor a growing commercial and industrial base across the seven

emirates. Through the provision of a comprehensive range

of Corporate Banking, Retail Banking, Trade Finance, SME

Banking and Treasury services, UAB is the Bank of choice

among major corporate clientele segments in the UAE.

Editors choice awardfor contributing to

trade finance

Dubai Trade

Dubai Trade is the premier trade facilitation entity that offers

integrated electronic services from various trade and logistics

service providers in Dubai under a single window. It underlines

Dubais position as the ideal base for trading across borders

with its unique geographical location, excellent infrastructure

and seamless processes across the private sector and

government agencies.

It is a subsidiary of Dubai World through the intermediary

company, Port & Free Zone World FZE and is incorporated

under the laws of the Jebel Ali Free Zone Authority in Dubai,

United Arab Emirates. It integrates the major stakeholders

in the trade and logistics operations including DP World,

Dubai Customs, Economic Zones World, and Dubai Multi

Commodities Centre.

Editors choice awardfor promoting trade

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Gulfood 2013, which concluded on 28thFebruary, gave us an insight into the potential

and magnitude of the trade and investmentopportunities in the food sector. We bring youan overview of this sector and talk to some of

the big trade partners about their opinion.

Beyond oil the complex and vitally important

trade and investment relationship the

GCC has with the world is not that well

known. New markets are being sought around the

world for a growing range of non-oil goods and

services, while, on the investment side, both the

well-capitalised sovereign wealth funds and an

increasing range of private investors have built up

wide-ranging investment portfolios. And one such

non-oil sector is the food sector.

The global food and beverage production

industry is one of the fastest growing sectors

worldwide, valued at AED 20.6 trillion in 2013. With

demand in the GCC expected to rise signiicantly fuelled by population growth, higher per capita

income, and increasing tourism numbers food

imports to the region will increase by as much as

100% to AED 194 billion by 2020.

At a press conference organised prior to the

Gulfood, H.E. Hamad Buamim, Director General,

Dubai Chamber of Commerce and Industry (DCCI)

stressed the importance of the food and beverage

sector for the growth and development of UAEs

economy. With the value of food consumption in

the UAE expected to have reached AED 28.2 billion

in 2012, he said this was forecasted to increase to

AED 32.6 billion in 2013.

When we asked some of the countries, about the

importance of an event such as the Gulfood, Nawal

Benzaid, Agriculture and Agri-food Counsellor,

MENA region, Trade Commission of Canada, said

Gulfood is important for our Canadian companies

which are interested in the Middle East and North

Africa market and want access to South Asia market.

The food opportunities are growing in this part of

the world and with the large expat community, the

demand for sophisticated and diversiied products

is increasing. It is a region that is very dependenton food import and Canada exports over 70% of

its agriculture and agri-food. The opportunities

are huge from commodities to specialty gourmet

products.

Gerard Seeber, Trade Commissioner and Consul

General, Trade Commission of Australia, Dubai

further added to it, Australia has a long-standing

relationship with the UAE as a consistent supplier

of quality foodstuffs and beverages. In addition to

achieving international reputation for producing

for thoughtFood

SECTOR WATCH

TRADE TALK

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food from a natural environment, Australia

has established high levels of food safety and

sophisticated food processing systems. All

the top 10 multinational food companies have

invested in the ideal production environment

that Australia has to offer. Australia has also

won increasing recognition for its world-

class organic, specialty and innovative foods.

Gulfood is a great opportunity to see and

network with some of Australias best.

For Singapore, Gulfood is the largest

launch platform for Singaporean F&B

manufacturers looking to bring their latest

products to the region. This year, more than

40 Singaporean companies participated at

Gulfood and 30 launched new products, said

Lester Lu, Regional Director, IE Singapore.

BACKGROUND

The GCC countries, with a total population of

40 million, are amongst the worlds richest in

terms of oil and gas reserves and per capita

wealth. However, when it comes to food

suficiency, due to water shortage and lack

of arable land (less than 2%) on an average,

these countries need to import almost 90%

of their food requirements. This backdrop

makes the growth and outlook of the food

sector a very important issue for the GCC

countries.

The numbers mean that the region will

continue to import from 85% to 90% of its

foodstuffs annually.

Saudi Arabia would continue to play a

key role in terms of volume, accounting for

around 64% of GCCs total food consumption

in 2015. Consumption in Qatar, Oman and

the UAE is likely to grow at a relatively higher

rate as population in these countries is

expected to expand at 4.0%, 3.2% and 3.0%,

respectively, on an average during 201115.

Due to the scarcity of arable land and anarid climate, agriculutural food production in

the GCC region has been minimal. According

to the FAO, of the total area, the land suitable

for cultivation is just 1.7% in Saudi Arabia and

3.0% in the UAE compared to 18.4% in the US,

23.7% in the UK, 16.3% in China and 51.6%

in India. Nonetheless, Saudi Arabia, which

produces cereals (mainly wheat), vegetables,

fruits, meat (poultry) and dairy products,

leads GCC countries in food production.

TRENDS

So what food products does the region

import from countries such as Brazil, Canada

and Australia?

Talking about these trends, Michel Alaby,

CEO, ABCC said, The GCC countries top ive

food group of products imports range from

cereals, meat, dairy products, fruits and

vegetable/animal fats/oils. National food

industry generally are for food processing,

so food products in that line are also always

in the import demands. When analysing

country by country foodstuff products, the

top ive according to the last available data

from INTRACEN in 2011 are:

1 Saudi Arabia USD 12,68 billion

2 United Arab Emirates USD 10,74 billion

3 Kuwait USD 2,28 billion

4 Bahrain USD 1,47 billion

5 Oman USD 1,26 billion

6 Qatar USD 992,27

To this, Nawal added, UAE is our top export

market in the GCC followed by Saudi Arabia.Last year, our total agriculture and agri-food

exports valued USD 704 million. Our main

exports are canola seeds, pulses (lentils)

and wheat. We also export some value added

products such as Canadian lobster, Canadian

beef, ice cream, and more

Australias main exports would be mostly

agricultural products meat, wheat/

oilseeds and horticulture. For processed

foods major exports include dairy, wine,

cereals, beverages, processed fruits an

vegetables.

Gerard also highlighted the trade relation

between the UAE and Australia. Australi

is now the UAEs third-largest supplier o

food for local consumption as well as fo

re-exports to other GCC countries, wit

food imports mainly focused on Australia

meat. In 2011, the UAE replaced Egypt a

Australias number one beef and lamb expor

market in the Middle East, with red mea

imports reaching 28,804 tonnes, accordin

to statistics provided by Meat and Livestoc

Australia. The trend has continued into 2012

with the UAE overtaking Saudi Arabia as th

largest importer of red meat products.

According to Lester Lu, Regional Directo

IE Singapore, Singapore exports its product

all around the world, with the GCC being th

sixth largest market for Singaporean food an

beverage exports. Singapores F&B export

to the GCC have grown signiicantly from

USD 57.04 million in 2001 to USD 256 millio

in 2012. Among Singapores top exports to th

region are milk and cream products, cookinsauces, seasoning mixes and edible oil

Beyond these traditionally strong export

Singaporean F&B manufacturers are als

eyeing growth opportunities in the health an

wellness, convenience and Halal food sectors

OPPORTUNITIES FOR BILATERAL

TRADE AND INVESTMENT

So what does this mean for food exporters? T

this, Gerard stated that Dubais position as

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trading hub in food will increase in importance

and commodity products will remain in high

demand.

For Australian exporters trade opportunities

in the GCC exist in most food categories.

However, the market is highly competitive

given the regions open trade policies. In

some instances consumption is small, so

opportunities exist for consolidators of mixed

consignments.

Further exploring opportunities, the one

industry within the food sector that offers

opportunities is the Halal industry. The

Halal food market which accounts for

12% of global trade in agri-food products

is estimated at USD 560 billion. The high

concentration of wealth in the area, along

with rapid infrastructure growth, facilitates

international trade, making it highly attractive

for business.

With increasing demand from 1.8 billion

Muslims worldwide, GCC companies are now

positioning themselves as major suppliers

of the halal food industry, which has been

estimated to generate between USD 632 billion

and USD 2.1 trillion annually.

The GCC, which imports around 80% of its

food, will look to Latin America as a vital food

source, with investment in land acquisitions

likely to increase. Brazil is one of the worlds

leading food exporters, with around 11% of

food-related exports sold to the Middle East,according to the Arab-Brazilian Chamber

of Commerce. Around one-third of Brazils

poultry exports go to the Middle East and it

is a signiicant exporter of Halal products to

the region .

Government support and inancial

incentives in the GCC have encouraged

private participation in the agriculture

sector. The Saudi government has simpliied

the bureaucratic process of investment for

private domestic and foreign players and is

offering inancial incentives. The government

is also building infrastructure to boost the

attractiveness of the sector. In its 2010 budget,

KSA allocated USD 12.3 billion, up 30.9%

from the 2009 allocation, to the agriculture

and water sectors with an aim to develop the

required infrastructure for agriculture in the

form electricity, irrigation, transportation

systems, and mills.

The UAE has also been working on vertical

farms, a concept farming technique in which

crops are sowed vertically on different levels

compared to horizontally in traditional farming,

to produce vegetables, fruits and grains indoors

by using limited quantities of seawater.

CHALLENGES

Talking about the challenges, we asked Michel

what he thought of it, since Brazil is a major

trade partner of the region when it comes to

food products. To this he said, Mercosur-

GCC Free Trade Agreement may ease trade

lows between regions. Regarding logistics,

maritime lines are increasing routes, but

some companies request more frequent lines.

Referring to airlines for passengers and cargo,

we have today, two companies: Emirates

Airlines, (daily lights to So Paulo and Rio de

Janeiro) and Qatar Airways, (daily light to So

Paulo). Eithad Airways will open a daily light

beginning June, 2013.Nawal reiterated the same sentiment

and said the distance coupled with high

transportation costs make it dificult to trade.

As it must be evident by now, while

there are challenges there are also a lot of

opportunities that this sector offers.

We also spoke to Frank Courtney from

Barloworld Logistics, to know what are the

logistical challenges. According to Barloworld

Logistics food security & visibility are the top

challenges for the food logistics industry.

Looking at the current horse-meat scandal

in Europe; lack of security and visibility are

at the root of the scandal. Consumers and all

parties involved in a food supply chain need

to have greater visibility in order to be able

verify the authenticity of the products they

make and sell. Greater standards & scrutiny

by government agencies is more pertinent to

ensure food security, however this can only

be effective if the visibility and security is in

place and enforced

Barloworld Logistics recently concluded

a supply chain study with 500 senior

management professionals from various

industries in the GCC. The greatest challenges

faced by the companies surveyed, are related

to interpretations of rules & regulations

within the country and cross boarder

transportation. There is a sizable component

of the companies surveyed that form part of

the food industry. The challenges mentioned

above are more critical when it comes to

perishable cargo.

However, over the last two decades GCC

countries have made substantial investments

into infrastructure and facilities speciically

for the importation of food into the region.

The continual development and investment

by governments and private companies has

resulted in a robust modern infrastructure

availing a myriad of solutions for companies

wanting to export to GCC countries.

In country infrastructural investments,

such as Dubai Flower Centre is an example of

an infrastructural investment by government

wherein multiple tenants beneit from the

cold storage facilities that allows for an

unbroken cold chain. There are also a large

number of logistics companies with facilities

and infrastructure to assist companies

wanting to enter this market.Government bodies responsible for food

security can ensure the standardisation,

reinforcement and communication of

rules and regulations to ensure better

understanding and compliance which will

eliminate many problems faced by companies

in this region.

We hope our review of the food sector in the

region will help you identify some interesting

opportunities.

AED 20.6 trillionvalue of global food & beverage production

SECTOR WATCH

TRADE TALK

32 MARCH 2013


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focus

FRANCE BILATERAL TRADE INDUSTRY WATCH INTERVIEW

Country

FRANCE

33MARCH 2013


34/52

David started the discussion byhighlighting two important issues

simplification and stabilisation

of the legal and regulatory environment.

Simplification has always been an

important objective. Making it easier for

companies to operate and do business in

France is the motto, so much remains to

be done, was Davids honest opinion.

First the notion of stabil ising the

environment that is important, particularly,

in the tax ield. It is often said by internationaland French companies that the environment

and regulation is too heavy and complex.

The tax code is really huge and thick and

streamlining the whole thing is important.

But more than simpliication, stabilisation is

important because in France they like new

measures and keep changing the laws. So the

government for the irst time committed itself

not to change a number of tax regimes and

they chose ive important tax schemes and

INVEST IN FRANCE AGENCY

COUNTRY FOCUS

Created in 2001, the Invest in France Agency (IFA) is responsible for promoting,prospecting and facilitating international investment in France, and for theeconomic attractiveness and image of the country. Aparna Shivpuri Arya spoketo David Appia,Chairman of Invest In France Agency, to get his expert opinionon the attractiveness of France as an investment destination.

Courting suitors

procedures beneitting the companies andannounced publicly that these ive tax regimes

will not be modiied during the governments

ive year tenure. Thats really very impressive

quite an innovation here. Its a tricky issue

because the parliament is likely to change

the law but the parliament is supporting the

government and the government announced

that these ive things will not be changed.

So its fair to assume that there will be no

change, and that the government and the

34 MARCH 2013


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parliament are working together. So thats an

interesting point, introducing more stability

in the business environment, opined David.

This is a part of the national pact for

growth, competitiveness and employment.

Number one measure remains in his view the

tax credit to reduce the cost of labour and,

as important, probably the stabilisation and

simpliication of the business environment.

Last September, the government convened

a large conference on the issue of the way the

labour market is organised and the labour

laws in general. All stakeholders were invited

and joined the conference, and it was decided

to ask the representatives of the business

community, the professional trade union, and

the trade unions representing the employees

to discuss together. They were asked to enter

into a negotiation to improve the state of play

and the existing rules and laws governing the

labour market; with two primary objectives

introducing more lexibility into the whole

system to make it easier for companies

to adjust when confronted with dificult

economic environment , more lexibility and

for the beneit of workers and employees to

introduce more security in the work market

or work place.

By doing this, David said that companies

will gain lexibility and employees will gain

more security, in terms of training, in terms

of the possibility to go from one company to

another without losing anything in terms of

rights and experience. So last September the

negotiations started , the government gave

the roadmap or four different points that

had to be covered and this was accepted as

a starting point or basis of negotiations by all

participants and they were left on their own

they negotiated on their own. They started

in October, and the negotiation had to bebrought to an end by January 11ththat was

the decision of the government. They were

informed by the government that in the event

that they were not able to reach a decision by

January 11th, the government would take it as

their responsibility and introduce a bill into

the parliament.

Everyone expected success, and they

managed to come to an agreement on January

the 11th. And I am very conident that the new

law will respect this very carefully drafted

balance and that the French labour laws will

be amended and improved as decided upon

by the stakeholders. This is to be achieved

by next probably April or May. And this is

something very important because as you

must have heard, that France was considered

as a country where the labour market was too

rigid, pointed David.

I should add one word, as an agency we

are very actively involved in attracting foreign

companies, one more important step taken

in January, was that the government adopted

a communication strategy to improve the

attractiveness of the country. It was irst

reiterated by the government that France

is keen to welcome new companies, foreign

companies, is an open country and wants to

remain open to foreign investment. Thats

the irst element in the strategy and it has to

be reiterated in every occasion. Second its

a matter of interest to all members of the

government because the attractiveness of a

country relies on a large range of elements

education, transportation, tax regime and

more, David highlighted.

According to the David, the third initiative

by the Government is to ask all stake holders

and owners to join their forces and unite

and work together to improve the conditions

offered by France. That is the third elementin the environment which is of great value to

them. And they are currently in the process of

computing all results for 2012 and they work

together with the regions in France.

We get in touch with the head quarters of

the companies, we verify and check whether

their decision is solid and whether the

investment will take place soon and then we

compute and include in the new report and

we will very soon, David proudly stated.

Since all European countries are workin

hard on being more attractive to investors

we asked David, for a GCC potentia

investor, what will be the advantage

of investing in France? David, who wa

quite amused with our question, said

that recently the Government decide

to launch an internal work and it asked

group of ive personalities to work on th

idea or notion of a national brand mark

brand name mark de France and it wa

felt necessary to look at that in more deta

because we have deinitely sort of an imag

abroad which may vary from one countrto another for sure but of course the nam

France means something to everyone

positive or less positive, related to history

to culture to gastronomy and so forth. An

it was asked to these experts to try and

ind some sort of a brand which migh

encapsulate all positive elements of th

image of France abroad.

Im starting with this to let you know

that we are currently engaged in thi

David Appia,Chairman of Invest In France Agency

We have the most supportive research tax credit inEurope- its a 30 % rebate in all expenditures in R&D.Its absolutely unparalleled and it benefits almost 2000

companies in France, was Davids answer.

35MARCH 2013


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discussion and this report is to be translated

next may ( 1stof May) so Im not sure what

the results are but they are working on

that, remarked David.

We have excellent infrastructure, roads

and IT infrastructure, but is it really what

makes France different? Well lets say its

clearly an asset. Its a positive element

in the whole picture. Then we do have a

central location in Europe at the heart of

the European market. If I go to the Website

of my sister agencies in Europe, most of

them argue that their countries are in the

heart of the European market, but its true

that as far as France is concerned we are

at the heart of the market. Geographically

we are in the centre of Europe, is it whatmakes France different? Thats debatable.

What makes it different that as a country

we can offer a lot of elements to make

it interesting for a foreign investor? In

other words the attractiveness is quite

coherent and large and substantial. We can

offer a lot good location, infrastructure,

good people, high level of technology,

very creative workforce, an excellent

en viron men t in terms of R&D an d

universities. We have the most supportive

research tax credit in Europe- its a 30

% rebate in all expenditures in R&D. Its

absolutely unparalleled and it beneits

almost 2000 companies in France, was

Davids answer.

France also has 71 technological clusters

in the country a sort of open eco-systems,

in which public and private companies,

universities work together and support and

develop collaborative.

Moving along, David said that in the last

two or three years they have been in contact

with an increasing number of foreign

companies, especially from Asia, which

are keen on reaching the Gulf and Africa

and they take France as a base. It relates tothe historical link that France shares with

African countries.

He also brought to fore a very interesting

aspect- that of demography. He said that

the demography of a country tells you

about the economy of tomorrow and France

is well positioned as far as demography

is concerned. Companies do include

demographics in their benchmarks.

He also added that more and more

companies tell them that they value the

position of the country in terms of carbon

footprints. It is not only the companies,

but also the country which is involved.

Without trust and conidence, no money

will come in since money is put in for long-

term and unless there is conidence that

wont happen. That is why we would like to

reafirm that we want foreign investment

and well work towards making your

life easier. We are eager to welcome you,

remarked David.

We then moved on to our last point the

EU-GCC FTA. Talks have been going on a

long time and we wanted to know whether

there will an impact of that agreement on

trade and investment? David was quite surewhen he said, Yes, certainly so, though its

dificult to calculate right now since these

sort of agreements promote trade and

investment by offering mutual concessions.

It will deinitely offer a more favourable

environment.

It was impressive to know the work that

IFA is doing to promote France as the

investment destination. And there is no

denying that it has done a good job!

Change in the number of job-creating foreigninvestment projects in France (

3+teme+march2013_issuu

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