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UAE hotel group boss sees tourism positives in new Qatar agreement

The CEO of UAE-based Rotana Hotels has said the Qatar accord will serve to accelerate the recovery of UAE’s hospitality industry as it gets back to its feet in the wake of the coronavirus pandemic.

The positive impact is likely to echo across several tourism-related sectors including aviation, retail, and hospitality, industry experts agreed.

“Following what was undoubtedly the toughest year on record for the hospitality industry, it is important to unite efforts to promote travel and tourism throughout the Middle East,” said Guy Hutchinson, CEO and vice president of Rotana Hotels.

“The restoration of ties between the UAE and Qatar will have numerous positive effects across many industries such as cross-border trade, investment, aviation, and travel & tourism sectors, accelerating the speed of recovery in 2021,” he continued.

The UAE joined Saudi Arabia, Bahrain and Egypt on Tuesday in signing an accord with Qatar during a summit of Gulf Cooperation Council (GCC) leaders, effectively ending a three-and-a-half year split between the countries.

While Dubai’s real estate sector is likely to reap the biggest benefits from the Qatar Accord in the long run, the emirate’s tourism sector could see a faster positive impact, said industry stakeholders.

“Dubai’s hospitality sector is more likely to see an immediate impact as Qatari tourists begin to return to the emirate. Whilst Qatari tourists were not so significant in terms of overall quantum of tourists visiting Dubai, accounting for 176,000 out of 14.9 million overnight visitors in 2016, their spending power and affinity towards luxury properties is likely to underpin stronger demand levels in this market segment,” said Taimur Khan, head of research at Knight Frank.

“More so, as both corporate and leisure inbound tourism increases we will also see the emirate’s retail and F&B sectors benefit from this trend,” he added.

Full recovery of Qatari tourism to Dubai, however, will be gradual given that multiple countries across the world continue to grapple with the pandemic.

“Qatar has, in the past, been a large market for the UAE. However, taking into account the new world norms, it will take time to return to the previous numbers,” said Hutchinson.

The aviation industry also stands to benefit from the restoration of ties with Qatar, with low-fare carriers Flydubai and Air Arabia expected to be among the big winners.

“The restoration of intra-Gulf links should feed through to lower fares and less flight time for travellers, providing a particular advantage to upcoming events such as Expo in 2021 and FIFA World Cup 2022, aiding to boost the overall GCC tourism sector,” explained Hutchinson.

Direct routes to and from Qatar, from Saudi Arabia, the UAE, Bahrain and Egypt, were halted as part of the country blockade implemented in June 2017. It meant passengers from the four countries travelling to or from Qatar were forced to take connecting flights, through Kuwait or Oman for example, while Qatar Airways was prevented from travelling over the respective airspaces.

That changed on Monday when Saudi Arabia lifted its ban and reopened its borders to Qatar and after the historic agreement was signed in Al Ula at the GCC summit on Tuesday, the other three countries are expected to follow suit.

Source:https://www.arabianbusiness.com/travel-hospitality/456954-uae-hotel-group-boss-sees-tourism-positives-in-new-qatar-agreement

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How the coronavirus pandemic impacted salaries in the Gulf in 2020

Salaries for the majority of professionals working in the Gulf region were unaffected or positively impacted over the past 12 months, according to recruitment major Hays.

Its 2021 Salary & Employment Report delivered largely positive data for last year despite it being a year of “unprecedented change and challenges for the global jobs market” amid the coronavirus pandemic.

The report, which was compiled from a survey of more than 3,500 employers and employees from across the region, found that while 18 percent of salaries decreased in 2020 compared to 2019, 34 percent increased and 48 percent remained the same.

“As ever, when it comes to salaries, it has been a mixed picture for professionals in the region. With the outbreak of Covid-19 and associated movement restrictions enforced on all in our personal lives, it may be easy to assume that we were all similarly impacted in our professional lives but, as our survey shows, this is just not the case,” said Chris Greaves, managing director of Hays Gulf region.

The report found that of all the different job functions, IT and tech professionals experienced the greatest number of pay increases in 2020 (38 percent), while the lowest number of salary increases were paid to those in office support and administration roles (26 percent).

“Demand and salaries for tech professionals have been relatively high as, despite the challenges Covid-19 has brought to businesses this year, the need for automation is more crucial than ever in enabling organisations to remain competitive in their respective markets. Employers are willing to pay high salaries for the top tech talent to ensure they are setup as efficiently as possible for business going forward,” said Greaves.

He added: “In contrast, demand and salaries for office support and administrative roles have decreased as the pandemic forced the closure of many offices during lockdown and this, along with the shift to more home and remote working, has made many of these roles redundant.”

When comparing different industry sectors, telecoms, pharmaceuticals and life sciences, and banking and financial services were the three most robust industries in 2020, with only 6 percent of employees experiencing a pay cut.

In contrast, the four sectors which introduced salary reductions to the highest degree were aviation, hospitality and tourism, engineering, and property, with 34 percent of employees having their salaries reduced last year.

“It is of no surprise that these industries have been most negatively impacted by the Covid-19 pandemic. Lockdowns and threats of spreading the virus reduced tourism numbers overnight in March and there are still many barriers to travelling. Demand for oil and oil prices have therefore fallen and resulted in some significant cutbacks on fiscal and monetary policies of governments whose economies are somewhat reliant on the oil and gas industry – namely those in the Gulf. This has then seen many construction projects in the region go on hold or be cancelled altogether,” said Greaves.

Looking ahead
According to Hays, salary expectations for 2021 are optimistic with nearly half of employers (47 percent) planning to increase pay rates in the next 12 months. Similarly, 47 percent of employees expect their salary to increase in 2021, most commonly by 5-10 percent.

From our own experiences in the market, business activity really picked up across all sectors towards the end of 2020 and we believe this momentum will continue over the coming months, giving rise to a larger proportion of the working population receiving salary increases in 2021 compared to 2020,” noted Greaves.

He added: “Employers will undoubtedly be more cautious with spend on hiring and remuneration of staff than they were pre-pandemic but we believe that the worst impacts of the pandemic are behind us and organisations will only add to their headcount and reward staff going forward rather than freezing pay or making further redundancies.”

Source:https://www.arabianbusiness.com/jobs/456853-how-the-coronavirus-pandemic-impacted-salaries-in-the-gulf-in-2020

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Gulf tourism losses due to coronavirus could reach $60bn

The Gulf’s travel and tourism industry may have lost up to $60 billion during 2020 due to the ongoing restrictions related to the global coronavirus pandemic.

Consultants Frost & Sullivan said in a new research report that the sector’s financial loss is expected to reach $50-50 billion, with hotels likely to account for up to $15 billion of the losses.

Frost & Sulllivan said the growth in the tourism and travel sector in the GCC region was about 10 percent during the past five years.

Based on this growth, it was expected that the entire spending on traveland tourism in the region would have reached $110 billion in 2020 but coronavirus dramatically changed things.

“As consumers step out of their homes, maybe for the first time since global lockdowns, they will still want the luxury of a hotel stay but would wish to limit their exposure to other guests beyond their families,” Frost & Sullivan said.

The consultants added: “While the industry is in the process of reinventing itself, it is prudent that the decision-makers understand the basics and ensure that it is not only done in the right areas but also with the right intent for the check-in bells to keep ringing and the footfalls to keep increasing. Understanding the consumer experience journey and innovating at every stage feasible, to make the consumer feel secure, will be the key.”

Dubai gradually reopened its tourism sector in July while Abu Dhabi delayed until last month to allow international visitors.

Saudi Arabia closed its air, land and sea borders again on December 20 following the spread of a new variant of Covid-19 and reopened on Sunday while Oman reopened on December 29

The research said the sector has seen growth in domestic tourism led by Saudi Arabia as most countries closed their borders to international visitors for long periods of the year.

It added that 65 percent of all hotels in the region are expected to adopt bio-bubbles – a safe and secure micro-environment, isolated from the outside world to minimise the risk of infection.

By design, it permits only authorised and accounted for people to enter the protected area after testing negative for the virus.

IPL T20 Tournament in UAE pioneered the bio-bubble and executed a tournament featuring 300+ participants across 24 matches in three cities with zero infections, the report noted.

Frost & Sullivan also said it expects the global cloud kitchen market to grow to $1 trillion by 2030, with operators having a strong foothold in the overhead heavy and predominantly urban GCC market.

“More people are staying home for extended periods as organisations adopt remote working to counter the virus effect. This is feeding demand for whatever industrial kitchens serve up and get F&B operators to deliver to homes around the country.

Plus, with residents less likely to visit crowded destinations, including restaurants, ordering-in has become a definitive need of the hour,” it said.

The report added: “In future, we will witness more experiments like ghost kitchens that can meet the growing demand for delivery… third-party delivery will be a trend that will replace the current staple of eating-out.”

https://www.arabianbusiness.com/travel-hospitality/456789-gulf-tourism-losses-due-to-coronavirus-could-reach-60bn

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Giving the Service Sector a Virtual Helping Hand

Scion Industrial Engineering

One of the positive points to come from the global coronavirus pandemic has been the ingenuity of some businesses to keep operations going throughout what could be described as the ultimate stress test. The need for social distancing and the resulting widespread supply chain disruption often means turning to technologies which may not have previously been deployed, out of necessity rather than choice. In fact, recent IFS research on business responses to the global pandemic found 52.5% of businesses plan to increase spending on digital transformation.

When a large proportion of revenue generated by providing direct aftermarket services to a widespread customer base comes under threat, it’s obvious that continuity is key to ensure they still receive the highest level of service possible in a difficult time. This is exactly what IFS customer Munters – a global leader in sustainable, energy-efficient air treatment solutions – realized at the very beginning of the pandemic. It strategically pinpointed remote assistance technology as the key to serving customers and supporting in-field and factory-based operations.

On-site challenges – global scope
Munters manufactures, sells and maintains specialist equipment for demanding industrial sectors where controlling temperature and humidity is mission-critical. To reduce reliance on site visits, the company looked to remote software tools and merged reality to create functionality enabling teams to interface remotely with customers and improve efficiency by being able to perform remote resolution and diagnosis—a critical step in its journey to servitization.

The company wasted no time when it realized its servitization efforts could be in danger, creating a level of urgency to make remote assistance technology operational in the shortest window of time possible.

The challenge was how to go global with the solution in such a short time window. With five production units in the United States and over 20 locations worldwide, the company’s business model relies heavily on completing on-site visits—including even before the initial installation of equipment.

A remote helping hand
The chosen technology needed to transcend location, skillset and environment. The goal was to both provide remote support to field technicians and to support a new manufacturing production line without sending experts to the site.

IFS Remote Assistance makes it possible for teams to be anywhere, instantly—this includes field technicians and third-line support using the solution on their mobile devices, as well as experts guiding the opening of the new production line using Vuzix smart glasses. It provides opportunities for remote customer support and resolution, remote diagnosis to increase first-time fix rates, better utilization of valuable resources, as well as more rapid employee training and knowledge transfer.

Merging reality to provide real business benefits
Munters technicians can now take advantage of the features and hands-free collaboration opportunities offered by merged reality environments. This means users can collaborate and interact in real-time while telestrating, freezing images, using hand gestures and even adding real objects into the merged reality environment—whether that’s technician to third-line support, technician to customer, or expert to manufacturing facility.

With modern remote assistance tools, time to value can be rapid and what minimal user training is required is extremely intuitive. In the case of Munters, a pilot was underway in just six days and training took less than two hours. The company has now extended the solution to more than 200 users globally in just two weeks.

Merged reality becomes the new normal
The example of Munters successfully adapting to unprecedented circumstances demonstrates not only how remote assistance technology can ensure business continuity during a global pandemic, but also the immense potential to further leverage the solution once business returns to a more normal state.

When considering how this technology can modernize operations, the benefits are clear to see. Efficiency gains come from the ability to perform maintenance inspections remotely, improve first-time fix rates as a result of remote diagnosis, reduce the number of technicians sent to sites and provide remote support to manufacturing facilities.

Make the jump now to future-proof service success
Although a necessity in the current global environment, transformational technologies will prove their value long into the future. Merged reality and remote assistance for example, will change the way customers interact with service providers, setting in a new bar in terms of service levels and satisfaction.

Those who stay on the side-lines may find themselves out of the game and playing catch-up for years to come. Those challengers, like Munters, who act now to differentiate their service offerings will put themselves way ahead—not just in the current climate but into the future as well.

Source:https://industrytoday.com/giving-the-service-sector-a-virtual-helping-hand/

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Brunei Oil and Gas Market, Size, Share, Outlook and Growth Opportunities Report 2020-2026

Scion Industrial Engineering Pvt. ltd.

Recovering prices, strong demand from the transportation industry and modern developments of oil and gas exploration and production activities are some of the factors driving Brunei oil and gas market growth.

Increasing exports and imports of oil and gas on the account of surged demand across the world are fuelling the market growth. Global oil demand is estimated at 104 MMbbl/d in 2025 and natural gas continues to expand its share across major markets. Oil and gas companies will need to expand their production to meet emerging demand in the foreseeable future.

The oil and gas industry is undergoing rapid transformations across the world. The innovation of new technologies has allowed unconventional drilling that enhances oil & gas production. New business models and services are rapidly evolving and assisting to reduce the cost of operations in upstream oil & gas, which in turn promoting the market growth.

Sustained growth in the consumption of natural gas, petroleum, and petrochemical products is one of the major growth drivers for oil and gas companies in Brunei. Companies operating in the industry can benefit from this opportunity through investing and participating in the oil and gas trade. The major Brunei companies are undertaking various oil and gas pipeline projects and contracts to expand their production capacities and sustain their position in the oil and gas industry.

In Brunei, future oil and gas consumption will increase due to key factors such as a strong economy, population growth, and fuel economy. The dependence on oil and gas is further expected to increase as the country’s infrastructure continues to heavily rely on petroleum-based products.

The market players are also undertaking several investment plans to cater to the increasing demand for oil and gas products. Government policies and support related to the exploration and production of oil and gas are playing a major role in the industry and encouraging the companies to boost Brunei oil and gas investments.

Brunei Oil and Gas Market research identifies that the competition continues to intensify year-on-year. The report covers the 2019 scenario and growth prospects of the Brunei Oil and Gas market for 2020-2026.

Source:https://www.businesswire.com/news/home/20191205005820/en/Brunei-Oil-Gas-Market-Size-Share-Outlook

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UNWTO and Italy look ahead as official visit marks restart of European tourism

Scion Industrial Engineering Pvt. Ltd.

The leadership of the World Tourism Organization (UNWTO) is on its first official visit to a Member State since restrictions on travel were introduced in response to COVID-19. The four-day trip to Italy (1-5 July) comes as the United Nations specialized agency for tourism guides the sector’s restart and destinations across the Schengen Zone open their borders to tourists once again.

Throughout the COVID-19 crisis, UNWTO has led tourism’s response through a series of high-level virtual meetings, uniting the sector, advocating for political and economic support and working with Member States to mitigate the impact of the pandemic and lay the foundations for recovery. Now, as borders in some parts of the world are carefully re-opening back to tourism, UNWTO Secretary-General Zurab Pololikashvili is meeting face-to-face with political and tourism leaders to change gears. The official visit to Italy marks the start of this shift, comprising a series of high-level meetings in Rome, Milan and Venice.

Italy “world tourism leader”
Secretary-General Pololikashvili said: “Italy is a world tourism leader, a strong ally of UNWTO and committed to making tourism a pillar of sustainable economic development. We must build on the determination and solidarity that characterized our joint response to the crisis to grow back stronger and better with sustainability and innovation among our most important guiding principles.”

In Rome, Mr Pololikashvili held meetings at the highest levels of government. To further strengthen the bilateral collaboration on the road ahead to reactivate tourism and its economic and social benefits, was the connecting thread of the meetings held with Prime Minister Giuseppe Conte, Ministers of Culture, Cultural Heritage and Tourism, Dario Franceschini and of Foreign Affairs Luigi Di Maio, and the city’s Mayor Virginia Elena Raggi. The UNWTO delegation also met with Cardinal Parolin of the Vatican City, building on last year’s audience with Pope Francis.

In Milan, the Secretary-General met with Mayor Guiseppe Sala – advancing the 2nd UNWTO Sports Tourism Start-Up Competition as the city prepares for the 2026 Winter Olympics – and with the President Attilio Fontana of the Lombardy region.

In addition to learning of Italy’s response to the COVID-19 pandemic, the official visit also offered the opportunity to look to the future and further UNWTO’s priorities of making tourism more sustainable, resilient and innovative. On the opening day of the trip, Rome Fiumicino Airport was presented with a special plaque as UNWTO recognized its commitment to sustainability. Furthermore, all three cities were formally invited to become part of the UNWTO League of Cities for Sustainable Tourism Initiative.

New Special Ambassadors for Responsible Tourism Appointed
The official visit also presented the opportunity for UNWTO to highlight the role gastronomy and fashion, two of Italy’s most celebrated industries, can play in growing tourism and making the sector more diverse and relevant. In recognition of their work, acclaimed chef Gino Sorbillo and fashion designer Giorgio Armani were appointed UNWTO Special Ambassadors for Responsible Tourism. In their new roles, they will use their status and influence to promote UNWTO’s work in guiding tourism in these challenging times and highlight the sector’s important role as an economic driver, leading employer and promoter of unique cultural heritage.

Source:https://www.traveldailynews.com/post/unwto-and-italy-look-ahead-as-official-visit-marks-restart-of-european-tourism

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ATF TRAVEX 2020 opens for business in Brunei Darussalam

Scion Industrial Engineering pvt. ltd.

Business activities formally begin today, the first day of ATF 2020 TRAVEX, between top travel and tourism suppliers across all 10 ASEAN destinations – Brunei Darussalam, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, Philippines, Singapore, Thailand and Viet Nam – plus India, and global buyers.

Held in conjunction with official meetings by ASEAN NTO, ministerial delegates, association boards and tourism groups that began since 12 January, TRAVEX is ATF’s 3-day Travel Exchange component. The business-led exhibition is dedicated to showcasing ASEAN destination products and services and promoting inbound and intra travel within the region, coupled with structured appointments between ASEAN sellers and buyers from 43 countries including Australia, Azerbaijan, China PR, France, Germany, Hong Kong, India, Latvia, Macedonia, South Korea, Sweden, Poland, Russia and United States.

“Visit Malaysia 2020 will be featured at ATF 2020 TRAVEX. We are eager to invite all industry players to unite and welcome 30 million tourist to Malaysia through the focus on sustainability tourism, arts and culture” commented Mr Noran Bin Ujang, Director of International Promotion – South East Asia of Tourism Malaysia.

Said Kyaw Pyay Oo, Managing Director of Asian Tour Co., Ltd., Myanmar, “Our purpose for attending ATF 2020 is to seek partnerships with adventure and incentive travel suppliers, DMCs, green product & service providers and establish connections with hotels and resorts and travel management companies.”

Among this year’s event highlights is today’s business speed-dating segment – a newly-added feature to the TRAVEX programme – provided plenty of opportunity for delegates to build their lead generation network ahead of exhibition and appointment days that commence on 15 and 16 January.

To optimise on-site efficiency, all exhibitors and buyers were able to schedule up to 100% of their appointments prior to arriving in Brunei.

Also debuting at this year’s ATF TRAVEX is Singapore Tourism Board’s (STB) Campfire Sessions focusing on Muslim Travel, taking place tomorrow morning and afternoon at the Singapore-branded Buyers Lounge within the exhibition hall. Co-Founder of Have Halal, Will Travel, Mr Mikhail Melvin Goh and Chief Executive of CrescentRating & Halaltrip, Mr Fazal Bahardeen will be touching on topics spotlighting Singapore as a Muslim-friendly travel destination, as well Muslim-Travel trends, alongside moderator Ms Dawn Ng, STB’s Area Director of Malaysia & Brunei.

Anticipated networking highlights encompass luncheons by Tourism Malaysia and Tourism Promotions Board, Philippines and reception and dinner by Ministry of Tourism, Cambodia. Host Country, Brunei Darussalam will also be leading numerous functions such as luncheons for buyers and media, as well as the Opening ceremony and welcome dinner for all delegates taking place on 14 January evening.

Complimentary pre-show tours of Brunei on 13 and 14 January provided delegates an insight into Brunei’s abode of peace. Post-TRAVEX days, the experience continues beyond the show floor with charming optional tour itineraries such as a cruise along Brunei River or outdoor adventures at the Ulu Temburong National Park from 17 January onwards.

More than 109 international and local media representatives are also in attendance to cover the latest insights and first-hand destination developments by all 10 National Tourism Organisations and ASEAN Secretariat through the media briefings starting from 14 January.

Said Minister of Primary Resources and Tourism, Brunei, Dato Seri Setia Awang Haji Ali bin Apong, “As we look towards the next decade of a more prosperous and relevant ASEAN, member states must continue to collectively innovate and seek meaningful initiatives to increase tourism growth while retaining the heritage, tradition and identity that make us unique for future generations. This 2020, with Brunei Darussalam hosting the ATF, we welcome you to explore a country where you can trek into unspoilt rainforests and experience the tranquil beauty of our lush greenery, as well as dive amongst abundant coral reefs and historic shipwrecks. Your Bruneian adventure awaits!”

SOurce:https://www.traveldailynews.com/post/atf-travex-2020-opens-for-business-in-brunei-darussalam

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More than 6 million foreign tourists visit Iran in 2017

iran tourism

Once off limits to many because of international sanctions, Iran is making a big comeback as a tourist destination.
More than 6 million people visited Iran in the year ending March 2017, up 50% on the previous year and three times the number in 2009, according to official data.

The surge in visitors follows the 2015 nuclear deal between Tehran and world powers that resulted in many sanctions being lifted early the following year.

European airlines such as British Airways and Lufthansa (DLAKY) resumed direct flights to the country, and Iranian authorities relaxed visa requirements. And as more people arrive, demand for accommodation is skyrocketing.

That’s creating opportunities for local entrepreneurs and foreign businesses.

Unlike some Western firms, who are reluctant to invest in Iran because they fear President Trump could yet torpedo the nuclear deal, international hotel chains are moving fast to meet the need for more rooms.

France’s Accor (ACCYY) was the first chain to open in Iran in 2015. It now operates two hotels there.

Spain’s Melia (SMIZF) will open its first hotel next year. Rotana of the United Arab Emirates also has one hotel in the pipeline for early next year and plans three more by 2020.

EasyHotel, a U.K.-based budget chain, is reported to have signed a deal in July to deliver 500 rooms. It did not respond to a request for comment.

And the market clearly has room for many more players. Iran wants to attract more than 20 million visitors by 2025, according to the state tourism agency.

Many of the new visitors are young backpackers from Europe and Asia, drawn by Iran’s history and culture. The most popular destinations include the ancient cities of Esfahan and Shiraz. It’s also home to Persepolis, a UNESCO World Heritage site.

Many of those travelers are looking for budget accommodation, said Jalal Rashedi, who runs five hostels across the country. He offers bed and breakfast for as little as $15 a night, including internet access.

Trump keeps scaring investors away from Iran

“During the past few years we have had a rise in the number of tourists who are young, and they’re individual travelers,” he told CNN. “They’re young, curious, adventurous people who want to discover the truth about Iran, and they mostly stay at hostels.”

A World Economic Forum report earlier this year named Iran as the world’s cheapest travel destination.

But travelers still face obstacles.

Americans, Brits and Canadians need to apply for a visa in advance, while citizens of many other Western countries can get one on arrival.

And because some sanctions remain in place, the country has few links to international banking networks and Western credit cards won’t work there.

That means it can be difficult to make payments in advance to secure reservations. To get around that, Rashedi launched a website to allow travelers to make reservations at his hostels, and those operated by others, without payments.

Source:http://money.cnn.com/2017/09/05/news/economy/iran-tourism-boom/index.html

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Iraq to offer 3 refineries for investment in Kuwait conference

Baghdad (IraqiNews.com) Iraq plans to offer three of its oil refineries to investors during an upcoming conference of Iraq donors, the government said Thursday.

Anadolu Agency quoted a statement from the state’s investment authority saying that the refineries include Faw, in the southern Basra province, with a production capacity of 300.000 barrels a day, besides another in Anbar (150.000 barrels per day) and Nasseriya, Dhi Qar province (150.000 barrels per day).

Iraq imports and estimated USD5 billion in petroleum products for local demand, most of which is used for electricity generation.

Iraq’s need for petroleum products intensified after Islamic State militants took over the Baiji refinery in Salahuddin province, which secured nearly a third of the country’s needs with a capacity of 170.000 barrels per day.

Kuwait will be hosting Iraq donors conference from 12th to 14th February. Nearly 70 participants are expected at the event which will hopefully collect USD100 billion dollars for the reconstruction of the country and repair of damage caused by the war against Islamic State militants.

The investment authority said last Tuesday that Iraq was planning to offer a total of 157 projects to investors during the conference.

Iraq’s crude oil exports for December stood at nearly 109.9 billion barrels, with revenues of nearly USD6.5 billion.

Source: https://www.iraqinews.com/business-iraqi-dinar/iraq-offer-3-refineries-investment-kuwait-conference/

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Kuwait economy diversifies with growth in non-oil sectors

kuwait

Although Kuwait’s economy is dominated by hydrocarbons, it is non-oil activity, alongside the rebound in crude prices experienced since January 2016, that is driving growth forecasts. National Bank of Kuwait estimated overall real GDP growth of 3.6% in 2016, and forecast growth of 1.7% in 2017 and 2.7% in 2018, while in the non-oil sector it anticipated growth of 3.5-4% in 2017 and 2018, driven by strong investment. The IMF bases its calculations on the calendar year, rather than the fiscal year, and estimated non-oil GDP grew by 5%, 3.5% and 3.2% in 2014, 2015 and 2016, respectively, and predicts non-oil growth of 3.5% in both 2017 and 2018, expanding to 4% in 2021.

Sector Data

The most recent public data for Kuwait’s non-oil economy is for 2015, which showed the dominant sectors were: community, social and personal services; real estate; financial intermediation; and transport and communications, accounting for 35%, 14%, 14% and 10% of non-oil GDP, respectively. All four sectors grew by 1-4% in 2015. Manufacturing, including refining, was worth 9% of non-oil GDP and had shrunk by 10%. Expanding sectors included hotels and restaurants, and utilities, up 12% each, wholesale and retail, up 6% and construction up 5%.

After several years of limited progress on government mega-projects from 2010 to 2013, there was a noticeable shift in the pace of development in 2014 and 2015. In 2014 more than KD7.5bn ($24.8bn) in projects were awarded, but the real bumper year came in 2015 when KD12bn ($39.7bn) worth of development contracts were signed across a range of sectors. In 2016 the pace dipped a little with KD5.6bn ($18.5bn) worth of awards. In February 2015 Kuwait’s National Assembly signed off on KD34bn ($112.5bn) in development projects for the five-year period between FY 2015/16 and FY 2019/20. Of the 521 projects, 421 had originally been part of the previous development plan, with 92 new schemes also approved. By early 2017 a significant number of new contracts had been awarded, but many others had been deferred, leaving the potential for a significant uptick in project activity.

Downstream

Against a backdrop of lower global oil prices, a significant proportion of the government contracts awarded in Kuwait in the three years from 2014 to 2016 were in the energy sector. Developments in the industry are driven by the desire to expand downstream refining capacity. Kuwait National Petroleum Company (KNPC), the downstream arm of state-owned Kuwait Petroleum Corporation (KPC), has billions of dinars worth of projects under construction. In 2015 KNPC awarded KD3.48bn ($11.5bn) in contracts for the country’s fourth refinery, Al Zour, which will have a capacity of 700,000-800,000 barrels per day (bpd), up from the 615,000 bpd originally planned, according to local press reports. One of the contracts, worth KD1.28bn ($4.2bn), was to develop the refinery’s industrial unit and was won by a consortium made up of Spain’s Tecnicas Reunidas, Hanwah Engineering and Construction Corporation of South Korea and China’s Sinopec. It was expected to take 45 months to complete.

In addition, two contracts worth KD1.75bn ($5.8bn) for infrastructure and support were awarded to Daewoo Engineering and Construction and Hyundai Industries Co, while a third package worth KD454m ($1.5bn) was given to a consortium including Saipem SpA and Hyundai Engineering. In March 2016 Hyundai also won the KD1.1bn ($3.6bn) contract to build the new liquefied natural gas (LNG) import and regasification terminal in the Al Zour area. Hyundai Engineering and Construction will build eight LNG storage tanks, while Hyundai Engineering will build the regasification terminal. Korea Gas Corporation will be responsible for commissioning and operational training for the clients. The project is expected to take 58 months and be complete by 2020. KNPC is also spending billions on its existing refineries, expanding Mina Abdullah and Mina Al Ahmadi and subsequently decommissioning Shuaiba. This mega-project is subdivided into a number of packages, with packages 1 and 2 for the Mina Abdullah refinery, as well as the deal for Mina Al Ahmadi refinery, awarded in 2014. In the final quarter of 2016 KD147m ($486.3m) in pipeline contracts were awarded for the new refinery at Al Zour. Kuwaiti firm Combined Group won the KD84m ($277.9m) contract for the oil pipeline, and the KD53m ($175.3m) contract for the gas pipeline also went to a local firm, Arabi Enertech. In early 2017 construction firms were waiting for the KD2.12bn ($7bn) contract to build an integrated olefins III plant for Petrochemical Industries Company, a KPC subsidiary. The plant would have the capacity to produce a 1m tonnes of polyethylene and 500,000 tonnes of polypropylene per year.

Culture

Kuwait is also making what has been described as the world’s biggest new cultural investment: a district devoted to the arts, museums and heritage. In October 2016 the Sheikh Jaber Al Ahmad Cultural Centre opened in Kuwait City. The $775m landmark facility includes a 2000-seat theatre, a music centre, libraries and a conference centre.

Adjacent to the centre, a new museum district is also being built over 13 ha. The Sheikh Abdullah Al Salem Cultural Centre will have museums devoted to science, natural history, space and Islamic history and is due to open in 2018. In June 2016 the Amiri Diwan announced that Bayan National Trading Company had been awarded a KD49m ($162.1m) contract to design and build Kuwait’s Motor Town, which is to include seven racing circuits on par with international standards, enabling Kuwait to host Formula One and MotoGP races.

Health Care

The Amiri Diwan has also led the development of new flagship medical facilities. The new Al Jahra Hospital, with 1171 beds and 20 operating theatres, is being built at a cost of KD390m ($1.3bn). Also, 40 km away, the 1168-bed Jaber Al Ahmad Al Jaber Al Sabah Hospital is being built concurrently. The KD304m ($1bn) project is planned for the Ministry of Health. In 2017 Italian firm Pizzarotti began work on t a new 600-bed maternity hospital at a cost of KD250m ($827.1m).

Airport Expansion

The need to expand Kuwait’s international airport is pressing, and the Amiri Diwan has taken control of the contract to build a passenger support terminal (PST). The contract was awarded in November 2016 so that 4.5m passengers annually can use the airport while the PST is being built. The KD52m ($172m) contract stipulates that the work must be completed in 450 days. In 2015 Turkish company Limak Holding was awarded the KD1.3bn ($4.3bn) contract to build the main terminal building at the Kuwait International Airport, tripling capacity by 2022.

Roadworks

A number of major road and bridge-building projects are also taking place in Kuwait, the most significant of which is the Sheikh Jaber Al Ahmad Al Sabah Causeway (SJSC), which spans Kuwait Bay from Kuwait City to the Subiyah area, where the Silk City development is to be built. In 2014 a KD147m ($486.3m) contract was awarded for the Doha link to the SJSC, which will cross Sulaibikhat Bay between Shuwaikh Port in Kuwait City and the Doha peninsula. New roads are also being built connecting the Saudi border to the sixth ring road (see Transport chapter).

Housing

The housing sector in Kuwait has also seen renewed impetus. In 2016 the Public Authority for Housing Welfare signed a KD288m ($952.7m) contract for an infrastructure works package for South Mutlaa City, which will be completed as a joint venture between Italy’s Salini and Turkey’s Kolin. When completed, the site will include 30,000 residential units. The Kuwait Projects Company also awarded its KD723m ($2.4bn) Hessah Al Mubarak mixed-use project to the Ahmadiah Contracting Trading Company in 2016. Then, in 2017 a contract was signed with korea Land and Housing Corporation to build South Saad Al Abdullah New City, a smart city, with construction set to get under way in 2019.

Power & Water

A significant milestone was reached in November 2016 when phase one of Kuwait’s KD2.4bn ($7.9bn) Al Zour North Independent Water and Power Plant was completed on time and on budget. This was the first construction project delivered by public-private partnership in the country and looks set to be replicated in the near future with similar schemes to be tendered, such as Al Zour North Two and Al Khiran (see analysis).

Source:https://oxfordbusinessgroup.com/analysis/branching-out-non-oil-sectors-see-flurry-new-activity