Written by Maten Helg, business manager - logistics, GAC Qatar
The waves from the crises that have rocked the world over the past few years have had little impact on Qatar – creating just a gentle ripple against the shores of this small but economically powerful country in the Middle East. Before the global economy took a nose-dive, Qatar was enjoying the benefits of a fast-growing economy. Even now, its fiscal environment remains stable, capital is abundant, energy is available at low cost and significant investment is being ploughed into its educational infrastructure, with a special focus on research and development. These factors, together with Qatar’s strategic location within the Gulf, mid-way between Europe and Asia, make it an attractive and competitive target for business.
According to the World Economic Forum 2010 - 2011 Report, Qatar is the Arab world’s most competitive economy and ranks 17th worldwide in terms of competitiveness. Although its domestic market is relatively small with a population of just 1.5 million, it is part of the GCC common market which is home to more than 50 million people and a member of the Arab Free Trade Zone with more than 350 million people. This means that Qatar enjoys easy access to this important extended market and also has the strategic advantage of being able to export its industrial products to GCC and Arab countries free of any charges and restrictions.
Oil and gas account for about 85 per cent of Qatar’s export earnings and have made it the world’s second largest per capita income country. A major role in this success story has been played by Liquefied Natural Gas (LNG), which is considered by many to be the clean and environmentally friendly fossil fuel of the future. By 2009, the country was already the world’s largest LNG producer and exporter, with an annual production capacity of 57 million tons (mmt/a). Just four years later, further development of natural gas projects have raised that figure to over 77 mmt/a. In addition to the major Ras Laffan LNG project, the affluence that natural gas has brought to our small country has helped drive major industrial endeavours in other business sectors.
Mesaieed (Umm’Said) is home to several key downstream industries such as fertilisers (by QAFCO) and more recently, the southern industrial area has become the host for major aluminium production facilities at Qatalum. Once completed, Qatalum will be one of the largest aluminium plants ever launched, with a capacity in the first phase of 585,000 tonnes of primary aluminium, all to be shipped as value added aluminium cast house products. The country is also seeking to stimulate the private sector to develop a ‘knowledge economy’, raise its profile as a tourist destination and become the Middle East’s leading international sports venue.
For several years, Qatar has been raising its athletic profile with state-of-the-art specialist motor sports race tracks and facilities, new sporting arenas and the valuable experience it gained when it hosted the 15th Asian Games in 2006. The cherry on the sporting cake came earlier this year when it was announced that Qatar had been chosen to host the 2022 FIFA World Cup. This will mean a steady demand for imported building materials over the next five to ten years. Meanwhile, projects that had been stalled during the global financial downturn have recently re-started. According to the comprehensive Qatar National Development Strategy 2011-2016, the total gross investment expected for this five-year period will be close to US$225 billion and that means tremendous growth in import volumes.
To aid and support development and to further enhance Qatar’s competitive edge as a regional hub for both air and sea freight, construction is underway for a new airport with a passenger capacity of over 4 million, due to be ready by the middle of next year. A new seaport is also being built at Mesaieed. Logistics firms will be amongst the first to benefit from these major new additions to the country’s transportation framework. Currently, smaller ports experience problems handling incoming cargo due to their small size and the shortage or absence of bonded warehouses in a free zone. With some new ports up and running, Qatar will undoubtedly become a major regional player in the logistics hub business.
With the logistics infrastructure in place and increased demand on the shipping and freight forwarding services for both imports, but increasingly exports too, local freight forwarders and logistics providers are looking to a new era with greater demands than ever before. Not all the country’s logistics service providers will have the highly trained staff, local expertise and contacts, global resources and business vision to meet the challenges of that new era. GAC staked its claim in the country back in 1976, and we are now ready and eager to play a key driving role in its bright new future.