INTERNATIONAL TRADE: Safmarine's Trade With Asia
Recent Western Cape Business News
SAFMARINE says the petrochemicals, automotive and garments industries are the top three export commodities for the West and Central Asian (WCA) region.
The top three importing as well as top three exporting countries in WCA - for Safmarine - are India, UAE and Pakistan. Safmarine says it has noted an increase the number of reefer products being exported from the region (mostly from India) and an increase in the volumes of perishables into the Gulf region.
Infrastructure pro-jects and development slowed during the first part of 2009 due to the global financial situation however these projects have begun to show growth recovery in 2010, particularly in the GCC countries; this thanks to the support of governmental investments. (GCC - Gulf Cooperation Council - is an economic agreement similar to the European Union and covers the Gulf states of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates.)
Volume wise, 2010 has started strongly and Safmarine’s main focus is to increase the freight rates back to a sustainable level. The signs are positive that the market will accept the increases, says Stephen Knight, Safmarine executive for WCA.
“Overall the WCA region is doing well on exports and imports and we expect the growth to continue throughout 2010. We are continually looking at how to improve our services to our core markets and are introducing a direct service from the India and the Middle East in the first quarter of 2010.”
“Our focus is on costs, our relationships with customers and the solutions we are able to offer them. While we cannot control the size and volume of the market, we can control how we deal with our customers and how we spend and deploy our resources,” Knight says.
He says the countries in the Arabian Persian Gulf have traditionally traded with Europe and USA, but the Far East has become an important market and the Intra Middle Eastern trade is also strong.
As an Africa specialist, Safmarine has also been active in growing the trade between the Arabian Persian Gulf region and Africa.
The trades to Europe, Africa and the Americas are, from a Safmarine point of view, the three most important trades for this region.
The market is fairly diversified e.g. Dubai is largely forwarder driven while the rest of the Gulf is predominantly focused on the export petrochemicals industry and the import of consumer goods.
Safmarine saw an increase in volumes to this region, despite the downturn in the global economy. Exports in many of the petrochemical countries - such as Saudi Arabia, Qatar, UAE and Iran - have increased as new production facilities come on line, a positive trend which Knight anticipates will continue for the next three to five years.
India, the largest economy in the region, is also Safmarine’s biggest market in this region and the third largest globally. The volumes of machinery, consumer goods, textiles, foodstuffs and automotive products moving from India to Africa are very encouraging. Safmarine-wise, India and Pakistan are more export-driven although these markets are generally balanced from an export/import perspective.
Knight points out that both India and Pakistan are rather diversified markets. India is essentially forwarder driven; forwarding companies export high volumes of commodities and manufactured goods.
The commodity market is strong in countries such as Bangladesh, Sri Lanka and Pakistan; the garment industry is also significant in these countries while tea is the main commodity for Sri Lanka.
“We see positive future potential for Bangladesh, where exports are growing - particularly as a result of an increased demand from retailers,” Knight says.
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