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Middle East shipping leaders voice cautious optimism about recovery

Middle East shipping leaders voice cautious optimism about recovery

Dubai: Leading figures in Middle East shipping expressed confidence that the local industry was "weathering the storm" while speaking at the Money & Ships conference here yesterday

"I am confident that recovery is on the way and we are much better off than we were at the beginning of this year," Mohammed Al Muallem, Senior Vice President and Managing Director of DP World, UAE region, told delegates in a keynote address at the Seatrade-organised conference taking place at the Grand Hyatt Hotel in Dubai. "We are weathering the storm."

HE Sheikh Daij bin Salman Al Khalifa, Ministry of Finance Under Secretary for Port Affairs and Chairman of the General Organisation of Sea Ports for Bahrain, said 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," he added

Sheikh Daij reminded how 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 added there had been a 19% fall in the value of orders for new ships from companies in the Middle East last year. In addition, ship repair yards have been suffering from a decline in business since the beginning of the year, added Sheikh Daij, who is also chairman of ASRY, one of the region's leading yards.

Addressing the impact on the regionally vital tanker trade, Ahmed Al Falahi, CEO of Gulf Energy Maritime, said 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. "Global financial institutions have indicated that approximately US$400-500 billion is needed for ship financing between 2010 and 2012 with estimated cancellations between 10 and 20%," Al Falahi added.  [08/10/09]