Arabian Supply Chain cited Mr Mohammed Al Muallem MD of DP World in the United Arab Emirates as saying that the maritime sector will emerge stronger than ever from the global economic crisis.
Mr Al Muallem said that “We are weathering the storm. I am confident that recovery is on the way and we are much better off than we were at the beginning of 2009.”
Mr HE Sheikh Daij bin Salman Al Khalifa chairman of the General Organization of Sea Ports in Bahrain stated that he was cautiously optimistic about the future. There are clear signs of economic recovery in many parts of the world and there are encouraging reports that the worst is over and there are clear trends of recovery. Both were taking part in a key debate on the impact of the global economic and trade crisis on shipping and ports in the Middle East and the prospects for recovery at the region’s premier event for senior maritime executives.
Mr Sheikh Daij said that during the boom period from 2003 to early 2008, the Middle East shipping sector had expanded significantly but had been severely affected by the downturn. He said that there had been a 19% fall in the value of orders for new ships from companies in the Middle East in 2008. In addition, ship repair yards have been suffering from a decline in business since the beginning of the year.
He added that the slowdown had impacted the ports and logistics industries of the region with many leading port operators reporting reduced volumes of business in the first half. Nevertheless, I have no doubt that healthy competition among the regional ports and provision of high quality service at competitive prices will help bring about resurgence in the shipping industry in the region.
Mr Ahmed Al Falahi CEO of Gulf Energy Maritime said that the downward trend in the shipping and tanker sector which began earlier this year does not look like it is abating and until now the market is still quite weak. Overall, he felt the shipping industry may be among the hardest hit and could even be the last to come out of the slump. He is also concerned about finance from overstretched banks.
He said that global financial institutions have indicated that approximately USD 400 billion to 500 billion is needed for ship financing between 2010 and 2012 with estimated cancellations between 10% and 20%.”
Mr Al Falahi said that “Banks will definitely think twice before they lend that amount as freely as they did until 2008. I strongly believe however, that once the global economy stabilizes this will give enough comfort for creditors to cautiously start lending again.”
Mr Christopher Hayman chairman of Seatrade who is chairing the Middle East Money & Ships conference said that this is not the first time that the shipping industry has gone through a downturn. The difference and challenge this time is that it has combined with a financial crisis. In addition, there has been a distinct shift in emphasis in industry towards the Middle East and Asia which provides a lot of opportunity as well as challenges for investors in the region.”
