Gulf Cooperation Council faces shares challenges, must diversify risk

CHAIRMAN of Asry of Bahrain, Shaikh Daij bin Salman Al Khalifa, is warning that the seafreight industry in the Gulf Cooperation Council (GCC) for the states of the Gulf region face challenges as other net importers.

"After a sustained of 12-15 per cent per annum until 2008, we are now seeing growth rates in the industry of two to three per cent, which will continue for two reasons: low tariffs and global trade barriers," he said.

Speaking at the opening of the Seatrade Middle East Maritime conference in Dubai attended by industry professionals from 67 different countries, Shaikh Daji said: "Unfortunately, changes never come alone they come in groups, especially in the maritime sector. Stagnating volumes, rising fuel prices, declining asset prices, piracy and insurance are challenges.

"Super vessels are being ordered to take advantage of the economies of scale. Everyone is ordering vessels above 10,000 TEU; there's no lay up in this sector," he said.

"This is a reflection of the optimism in the industry that we will see another upturn soon, but maybe not in 2013," he said, reported Dubai's Khaleej Times.

Key to survival, Shaikh Daji suggests, is diversification and risk management. "We must change and evolve as the business environment changes around us. We must take calculated risks to protect ourselves; we must have the bravery to expand and diversify.

"Diversification should be a natural evolution; but should also provide benefits to the core business stream. Asry is subject to the same downturns faced by the shipping industry, but since we have diversified, our new oil and gas division is now earning as much revenue as our core business."

Jamal Majid bin Thaniah, vice-chairman of DP World and group CEO of Port and Free Zones World Dubai, said he sees a "new wave of globalisation" and a totally different world since 2008.