Sohar port. The company manages the port in northern Oman in partnership with the Port of Rotterdam. Alamy
Sohar port. The company manages the port in northern Oman in partnership with the Port of Rotterdam. Alamy
Sohar port. The company manages the port in northern Oman in partnership with the Port of Rotterdam. Alamy
Sohar port. The company manages the port in northern Oman in partnership with the Port of Rotterdam. Alamy

Oman's Asyad Group says Red Sea risks require balancing with growth strategies


  • English
  • Arabic

The Red Sea attacks on commercial vessels have disrupted global trade and dented shipping volumes but the chaos has created opportunities, making it imperative for logistics operators to balance industry risks with growth strategies, a senior executive at Oman's Asyad Group has said.

While the attacks by Yemen's Houthis on cargo ship have stoked geopolitical tension, affected supply chains and raised shipping costs, higher container freight rates are helping logistics operators to offset the impact of lower trade, Muhsin Al Rustom, the chief financial officer of Asyad Group, told The National in an interview.

Backed by the Oman Investment Authority, the sultanate's sovereign wealth fund, the company manages Sohar port in northern Oman in partnership with the Port of Rotterdam, as well as Duqm port in partnership with Antwerp Port and Salalah port facilities in collaboration with Maersk.

The business is “very much stable and diversified” and while the Red Sea disruptions have posed challenges at some ports, “you would find an upside when it comes to container freight rates and other tanker market freight services as well”, Mr Al Rustom said.

“It very much balances itself out.”

The group manages $4 billion in assets and owns a shipping subsidiary that operates close to 100 vessels.

Many shipping companies have been forced to reroute their vessels around the Cape of Good Hope in South Africa to avoid the risk of missiles attacks in the Red Sea, resulting in longer travel times and higher costs that are being passed on to consumers.

The extended transit time has led to shortages and port congestion as shippers avoid the Suez Canal, a critical waterway connecting the Mediterranean Sea to the Red Sea.

The narrow shipping lane handles about 12 per cent of global trade, including commodities such as oil and natural gas.

Houthi attacks on cargo ships in the Red Sea have caused a 90 per cent slump in container shipping through the area between December and February, US intelligence officials were as quoted as saying by Bloomberg in June.

Though Asyad has fared relatively well despite the unprecedented crisis, the company has not been “immune” to continuing volatility, Mr Al Rustom said.

“I won't say we've encountered something of this magnitude and for this prolonged time before,” he said.

Earlier this year, Salalah port warned that the Red Sea attacks could lower container throughput volumes by up to a quarter for the remainder of this year.

“The disruptions in the Red Sea are having a significant impact on global container transport and, consequently, our operations in Salalah are also being affected,” the port operator said in its earnings report in May.

Salalah port has also launched a multimodal service connecting to the Saudi port of Jeddah as an alternative to rerouting via the Cape of Good Hope.

This means that goods can be transported by lorries from the Omani port to Jeddah, which is a safer location in the middle of the Red Sea.

The overland route takes about four to five days, after which goods can be shipped from Jeddah by container vessels through the Suez Canal to Europe or the US east coast.

“We've been helping other ports in the region … there are some lessons that we learnt as well from these crises where you can bring more of land, logistics [and] innovative solutions that also helped us revive the business,” Mr Al Rustom said.

“The location of Oman is advantageous but I think, geographically, once you expand, you will be more and more exposed to potential economical or social or political situations where you will have to be agile and innovative when it comes to your logistics solutions.”

M&A push

The group is countering risks with push for growth and is keen to acquire stakes in ports located in the Far East, East Africa and the Indian subcontinent, Mr Al Rustom said.

The move is part of efforts to bolster its shipping business and expand its footprint beyond the Middle East.

Asyad aims to secure controlling stakes but is willing to settle for smaller shareholding.

“It could be a minority [stake] … but we prefer a majority controlling stake where we can bundle our integrated logistics offerings,” Mr Al Rustom said.

“We're very much open to having partners, either international or local into the geographies where we're venturing into.”

Muhsin Al Rustom, group chief financial officer at Asyad Group. Photo: Asyad Group
Muhsin Al Rustom, group chief financial officer at Asyad Group. Photo: Asyad Group

Potential acquisition targets include ports, freight-forwarding platforms and logistics companies, Mr Al Rustom said, without giving further details on the timing or the value of potential deals.

Last week, Asyad announced the acquisition of UAE-based Skybridge Freight Solution.

The deal, Asyad's first international transaction in the logistics sector, will help to expand the company’s presence in key trade centres such as China, India, the US and the six-member GCC, it said at the time.

Asyad’s expansion plans come at a time when Oman is looking to position itself as a global trading centre.

The country aims to diversify its economy, which is largely reliant on oil export revenue, amid a push to become one of the top 10 global logistics centres by 2040.

Oman is investing heavily in modernising and expanding its ports, including Sohar and Duqm, to handle increased trade volumes.

The refinery in Duqm, Oman. Photo: OQ8
The refinery in Duqm, Oman. Photo: OQ8

Listing plans

As part of its broader growth plans, the company is looking to unlock value in its portfolio companies.

It plans to list its subsidiary Asyad Shipping on the Muscat bourse. The public offering is expected to finalised before the end of this year or early 2025, with the parent company retaining a majority stake, Mr Al Rustom said.

“You recycle your matured assets and then you go and invest in more organic and inorganic assets to expand your business and then diversify further,” he said.

Asyad's shipping unit has robust growth prospects, especially in the dry bulk market, aided by Oman's extensive mineral wealth.

“Oman is one of the largest exporters of some of the minerals [such as] gypsum and limestone and a lot of that gets carried with our … vessels,” Mr Al Rustom said.

The demand for transport in the petrochemicals and refined products sector has also grown since the launch of a refinery in Duqm in February, he said.

The refinery, known as OQ8, is a joint venture between Kuwait Petroleum International and Oman’s state-run energy company OQ.

It has a production capacity of 230,000 barrels per day and serves markets in East Africa and the Indian subcontinent.

“Given the geopolitical tension in the West, primarily what's happening in Russia and Ukraine, there's a huge demand for natural gas out of Europe [and] the US,” Mr Al Rustom said.

“Our liquefied natural gas vessels are also positioned very well for the future.”

The company will expand its shipping fleet to replace older vessels and to meet an expected rise in green hydrogen exports, Mr Al Rustom said.

“For us, if we don't expand, we are not standing still, we're actually diminishing in size because the fleet is not getting any younger,” he added.

“Now, the expansion for the country itself; when it comes to green ammonia and green hydrogen, that's just the cherry on top.”

The sultanate is developing several large green hydrogen projects that aim to decarbonise its industries and export low-carbon ammonia to other markets.

The International Energy Agency expects the Gulf country to become the sixth-largest exporter of hydrogen globally and the largest in the Middle East by 2030.

Kathryn Hawkes of House of Hawkes on being a good guest (because we’ve all had bad ones)

  • Arrive with a thank you gift, or make sure you have one for your host by the time you leave. 
  • Offer to buy groceries, cook them a meal or take your hosts out for dinner.
  • Help out around the house.
  • Entertain yourself so that your hosts don’t feel that they constantly need to.
  • Leave no trace of your stay – if you’ve borrowed a book, return it to where you found it.
  • Offer to strip the bed before you go.
Results
%3Cp%3E%3Cstrong%3EStage%207%3A%3C%2Fstrong%3E%3Cbr%3E1.%20Adam%20Yates%20(GBR)%20UAE%20Team%20Emirates%20%E2%80%93%203hrs%2029min%2042ses%3Cbr%3E2.%20Remco%20Evenepoel%20(BEL)%20Soudal%20Quick-Step%20%E2%80%93%2010sec%3Cbr%3E3.%20Geoffrey%20Bouchard%20(FRA)%20AG2R%20Citroen%20Team%20%E2%80%93%2042sec%3Cbr%3E%3Cstrong%3EGeneral%20Classification%3A%3C%2Fstrong%3E%3Cbr%3E1.%20Remco%20Evenepoel%20(BEL)%20Soudal%20Quick-Step%3Cbr%3E2.%20Lucas%20Plapp%20(AUS)%20Ineos%20Grenaders%20%E2%80%93%2059se%3Cbr%3E3.%20Adam%20Yates%20(GBR)%20UAE%20Team%20Emirates%20%E2%80%9360sec%3Cbr%3ERed%20Jersey%20(General%20Classification)%3A%20Remco%20Evenepoel%20(BEL)%20Soudal%20Quick-Step%3Cbr%3EGreen%20Jersey%20(Points%20Classification)%3A%20Tim%20Merlier%20(BEL)%20Soudal%20Quick-Step%3Cbr%3EWhite%20Jersey%20(Young%20Rider%20Classification)%3A%20Remco%20Evenepoel%20(BEL)%20Soudal%20Quick-Step%3Cbr%3EBlack%20Jersey%20(Intermediate%20Sprint%20Classification)%3A%20Edward%20Planckaert%20(FRA)%20Alpecin-Deceuninck%3C%2Fp%3E%0A
Three tips from La Perle's performers

1 The kind of water athletes drink is important. Gwilym Hooson, a 28-year-old British performer who is currently recovering from knee surgery, found that out when the company was still in Studio City, training for 12 hours a day. “The physio team was like: ‘Why is everyone getting cramps?’ And then they realised we had to add salt and sugar to the water,” he says.

2 A little chocolate is a good thing. “It’s emergency energy,” says Craig Paul Smith, La Perle’s head coach and former Cirque du Soleil performer, gesturing to an almost-empty open box of mini chocolate bars on his desk backstage.

3 Take chances, says Young, who has worked all over the world, including most recently at Dragone’s show in China. “Every time we go out of our comfort zone, we learn a lot about ourselves,” she says.

Opening Rugby Championship fixtures:Games can be watched on OSN Sports
Saturday: Australia v New Zealand, Sydney, 1pm (UAE)
Sunday: South Africa v Argentina, Port Elizabeth, 11pm (UAE)

BlacKkKlansman

Director: Spike Lee

Starring: John David Washington; Adam Driver 

Five stars

Volvo ES90 Specs

Engine: Electric single motor (96kW), twin motor (106kW) and twin motor performance (106kW)

Power: 333hp, 449hp, 680hp

Torque: 480Nm, 670Nm, 870Nm

On sale: Later in 2025 or early 2026, depending on region

Price: Exact regional pricing TBA

UPI facts

More than 2.2 million Indian tourists arrived in UAE in 2023
More than 3.5 million Indians reside in UAE
Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems
Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions

Global state-owned investor ranking by size

1.

United States

2.

China

3.

UAE

4.

Japan

5

Norway

6.

Canada

7.

Singapore

8.

Australia

9.

Saudi Arabia

10.

South Korea

What%20is%20Dungeons%20%26%20Dragons%3F%20
%3Cp%3EDungeons%20%26amp%3B%20Dragons%20began%20as%20an%20interactive%20game%20which%20would%20be%20set%20up%20on%20a%20table%20in%201974.%20One%20player%20takes%20on%20the%20role%20of%20dungeon%20master%2C%20who%20directs%20the%20game%2C%20while%20the%20other%20players%20each%20portray%20a%20character%2C%20determining%20its%20species%2C%20occupation%20and%20moral%20and%20ethical%20outlook.%20They%20can%20choose%20the%20character%E2%80%99s%20abilities%2C%20such%20as%20strength%2C%20constitution%2C%20dexterity%2C%20intelligence%2C%20wisdom%20and%20charisma.%20In%20layman%E2%80%99s%20terms%2C%20the%20winner%20is%20the%20one%20who%20amasses%20the%20highest%20score.%3C%2Fp%3E%0A

Babumoshai Bandookbaaz

Director: Kushan Nandy

Starring: Nawazuddin Siddiqui, Bidita Bag, Jatin Goswami

Three stars

The specs

AT4 Ultimate, as tested

Engine: 6.2-litre V8

Power: 420hp

Torque: 623Nm

Transmission: 10-speed automatic

Price: From Dh330,800 (Elevation: Dh236,400; AT4: Dh286,800; Denali: Dh345,800)

On sale: Now

Key facilities
  • Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
  • Premier League-standard football pitch
  • 400m Olympic running track
  • NBA-spec basketball court with auditorium
  • 600-seat auditorium
  • Spaces for historical and cultural exploration
  • An elevated football field that doubles as a helipad
  • Specialist robotics and science laboratories
  • AR and VR-enabled learning centres
  • Disruption Lab and Research Centre for developing entrepreneurial skills
Updated: July 29, 2024, 11:53 AM`