GULF

 

Aug 19 - 25, 2002

 

1.INTERNATIONAL

2. INDUSTRY

3. FINANCE

4. POLICY

5. TRADE

6. GULF

 

PEACE DECLARED IN SAUDI MILK WAR

Peace has been declared in a year-long price war in Saudi Arabia's bloated dairy industry, as five leading firms approach a face-saving merger.
The Azizia, Najdia, Mazra, Hana and Riyadh dairies, all threatened by cut-throat price competition, have begun merger talks with the aim of forming an 80 million litre-per-day company.

The combined firm will have a market share of 11%, big enough to compete with the market leaders.

But with milk prices continuing to fall and demand growth sluggish, the future for the sector as a whole looks bleak.

The five-way merger could help combat the crippling fragmentation within the Saudi dairy industry.

There are currently 26 major dairy producers in the Kingdom, and only two Alsafi, owned by France's Danone, and Almaira have significant market share.

The pair control more than 60% of the market, with another 25% divided between the Nadek and Nada producers.

Life for the rest has been tough, with milk prices dropping by more than one-quarter over the past 12 months in the fight for market share.

Overall, milk demand in Saudi Arabia is growing by only 4% annually way below levels seen elsewhere across the Middle East.

Late last year, it was predicted that at least half-a-dozen small firms would fold, but despite repeated talk of mergers, no real action has been taken until now.

UAE PROVIDES $9B AID IN 30 YEARS

The UAE has extended more than $9 billion in development aid to other countries over the past three decades to emerge as one of the world's biggest donors relative to the size of its economy and population, according to official figures.

The UAE provided around 10.6 per cent of the total financial assistance of nearly $110.5 billion extended by Arab oil producers since 1970 to fellow Arab League members and other third world nations, showed figures by Arab Monetary Fund (AMF).

This means the UAE's official financial aid to those countries totalled around $9.5 billion by end 2001. But it does not include the financial assistance provided by the Abu Dhabi Development Fund, the UAE's main foreign lending arm.

Saudi Arabia emerged the top Arab aid donor, extending nearly 64 per cent of the total aid, while Kuwait provided around 16.3 per cent.

In 2001 alone, Arab development aid, provided mainly by those three Gulf states, stood at around $1.4 billion, far lower than the financial help extended during the oil boom.

Gulf aid has sharply slowed down over the past few years because of a decline in oil revenues and new rules linking cash aid to economic reforms.

Gulf officials have said they want to make sure such aid will be used efficiently, including financing of privatisation and other reform programmes needed to spur economic growth.

"Gulf states are still providing aid although they themselves need assistance because of lower oil revenues and growing domestic commitments," said Kuwaiti economist, Jassim Al Saadoun.

DIFC LIKELY TO SEEK LISTING OF STATE FIRMS

The Dubai International Financial Centre (DIFC) may invite government-owned companies such as Emirates, Dubal, and entities like Dubai Electricity and Water Authority to list their shares on the securities market to be set up in the centre.

DIFC has shortlisted three financial services entities with global reputation to run the stock exchange.

The regional financial exchange, one of the five services to be offered by DIFC, is expected to start functioning next year itself.

Sources close to DIFC said the centre would also approach big family-run businesses and multinational corporations such as banks operating in the UAE to list their shares on the bourse.

EFFORTS ON TO BOOST FARM OUTPUT

The Ministry of Agriculture and Fisheries has embarked upon various projects to overcome the shortage of water in the central region and to improve the yield of crops.

Ongoing projects include the introduction of protected farming system in greenhouses, drip irrigation systems and experiments on vegetables and fruit trees suitable for local climate that require minimum water.

The projects are being conducted at the ministry's Al Dhaid Experiment and Research Centre in the Central Region.

"Some seven per cent of the farms have been deserted due to increasing salinity levels together with water shortage in the region," said Engineer Abdullah Rashid Al Moalla, Director, Ministry of Agriculture and Fisheries, Central Region.

The ground water level in the UAE is falling at an alarming rate around one metre per year. If left unchecked, the rapid depletion of underground water resources will soon render replenishment by rain too difficult, if not impossible, at a future date.

IRANIAN CARPETS REVIVE ANCIENT HERITAGE

An impressive and colourful collection of handmade Iranian carpets is on display at an exhibition in the Twin Towers.

The public also has the chance of watching a demonstration of carpet weaving by an Iranian carpet weaver.

"The exhibition revives the ancient tradition of Iranian carpets, their origins and features," said Abdul Karim Al Sanaji, director of the Al Sanaji Group, exhibition organisers.

"We display fine hand-made carpets and, through the exhibition, we aim at making the public aware of the value of this ancient art. Carpet weaving is two thousand years old in Iran and has been transmitted from generation to generation," he explained.

ISRAELI ARMY ACCUSED OF NEW KILLING

Palestinian officials have accused the Israeli army of killing a five-year-old boy in the Gaza Strip.

They said that troops opened fire on a residential area of Khan Yunis, killing Ayman Fares and wounding two relatives when they went to his rescue.

But the Israeli army denied any knowledge of the death, saying that its own men were attacked by gunmen in the area and had returned fire.

In a separate incident, an Israeli human rights group has strongly condemned the killing of a Palestinian teenager on Wednesday, after witnesses said he had been used by the Israeli army as a human shield.

NEW WILDLIFE RESERVES PLANNED: HAMDAN

Shaikh Hamdan bin Zayed Al Nahyan, Minister of State for Foreign Affairs and Deputy Chairman of the Environmental Research and Wildlife Development Agency (ERWDA), has said that a plan to set up and run a network of maritime and wildlife reserves in the Emirate of Abu Dhabi is being developed by ERWDA.

SADDAM REMOVAL ON AGENDA: RICE

The United States has no choice but to take action against Iraqi President Saddam Hussein, White House National Security Adviser Condoleezza Rice said.

But President George W. Bush had not decided "how he wants to do it" or how to "make the case for particular methods", she said. "We certainly do not have the luxury of doing nothing," Rice, a pivotal player in Bush's administration, told BBC radio. She said Saddam had twice come close to acquiring nuclear weapons.

PALESTINE MEETING US DEMAND TO REFORM FINANCE

Palestinian Finance Minister Salam Fayyad said a holding company had been formed to consolidate all Palestinian Authority funds and assets under a single umbrella, a reform that meets a key US demand.

Fayyad said in an interview with Reuters, Palestinian President Yasser Arafat gave formal approval on Wednesday night to the creation of the new Palestinian Investment Fund which would be under the finance minister's direct control. US President George W. Bush had demanded the Palestinians overhaul their finances, clean up corruption and choose leaders "not compromised by terror" before he would back the eventual creation of a provisional Palestinian state.

BAHRAIN, IRAN TO SIGN SERIES OF AGREEMENTS

Bahrain and Iran look forward to strengthening the bilateral relationship in a number of fields while aiming at ushering into a new era of further cooperation with His Majesty the King, Shaikh Hamad bin Isa Al Khalifa, paying an official visit to Teheran next week.

During this historic visit, the King will meet Iranian Supreme Leader, Ali Khamenei, and the Iranian President, Mohammed Khatami, where their talks will focus on ways to enhance bilateral ties as well as reviewing the latest regional developments, Minister for Foreign Affairs, Shaikh Mohammed bin Mubarak Al Khalifa, told in an interview with the local Press.

UAE-BAHRAIN AGREEMENT ENDORSED

His Majesty the King, Shaikh Hamad bin Isa Al Khalifa, issued a decree, endorsing the diplomatic and consular cooperation agreement between Bahrain and the UAE, which was signed in Manama on June 17, this year. The king issued a decree, endorsing an agreement on establishing the Arab Women Organisation, which was approved by the Arab League in its ordinary session, on September 16, last year.

INTERPLAST

Interplast Co. Ltd of Sharjah announced that the company has secured a Dh30 million loan from Emirates Industrial Bank (EIB).

GOLD AND DIAMOND PARK

The Gold & Diamond Park, an attraction for tourists and shoppers alike has reported an increase of 40 per cent in sales as compared to last year.

IRAQ ACCEPTS OIL-FOR-FOOD EXTENSION

Iraq has accepted an extension of the United Nations oil-for-food programme, but again rejected a new sanctions regime imposed by the Security Council.

The UN Security Council unanimously passed the sanctions resolution on Tuesday, which frees up the delivery of civilian goods to Iraq but restricts imports which could be used for military purposes.

The council also voted to extend the oil-for-food programme which has since 1996 allowed Iraq to use oil revenues to buy basic necessities for six months from 30 May.

US TO WITHHOLD EXTRA EGYPT AID

United States President George W Bush has said he will seek to withhold additional aid from Egypt to protest the prosecution of a prominent Egyptian civil rights campaigner.

University professor Saad Eddin Ibrahim, who holds a US as well as an Egyptian passport, was sentenced last month to seven years in jail after a judge found him guilty of embezzlement and "tarnishing" Egypt's image.

Egyptian diplomats in Washington were informed of the decision on Thursday.

ISRAELI NUCLEAR STRIKE ON IRAQ 'POSSIBLE'

Reports from Israel say that if the country were attacked by Iraq with chemical or biological weapons, it could respond with a nuclear strike.

The reports follow remarks by the head of the Israeli air force warning that, in the event of an Iraqi attack, Israel would not show the restraint it exercised in the Gulf War of 1991.

IRAQ TO RETURN KUWAITI LOOT

Iraq is to start returning Kuwaiti national archives looted by its army during the occupation of the Gulf emirate 12 years ago, a United Nations official has said.

UN envoy Richard Foran, in Baghdad, said he expected the operation to begin within weeks.

LOCAL FARM TO SUPPLY MORE CAMEL MILK

A UAE dairy company is planning to boost supply of camel milk to the local market to meet the growing consumption and turn the country into the world's third biggest market producer of the product, owners said.

Al Ain Dairy Company, one of the main milk and cheese producers in the UAE, said it started marketing camel milk at a daily supply rate of 300 litres in September last year and today the production has swelled to nearly 1,000 litres a day.

DISCOMFORT INDEX HITS TWO-YEAR HIGH

The UAE experienced its most uncomfortable day in recent memory.

The Discomfort Index hit a two-year high of Six, the maximum it has reached since the index was first formulated, a spokesman for the Meteorology Office at Dubai International Airport explained last evening.

DH183M SYNDICATED LOAN FOR NBF

A Dh183.5 million ($50 million) syndicated term loan for National Bank of Fujairah has been concluded by sole mandated lead arranger Dresdner Kleinwort Wasserstein, acting through Dresdner Bank Luxembourg.

Significantly, it is believed the first international syndicated loan facility for this region after the events of September 2001.

UAE SET TO SIGN LAND TRANSIT DEALS

To increase trade across the region, the UAE is going to sign land transit agreements with Iran and Tunisia in a few weeks, said a senior government official.

These agreements will also help to increase passenger movement on these road networks.

E-VISION WIRELESS DEAL

MDS of France has won the mandate to install a "wireless" cable transmission solution for Etisalat's E-Vision subsidiary. Work on the contract, awarded in July, has already started in Al Ain and should be completed in the third quarter itself, confirmed a top official.

AL SHIRAWI AWARDS CONTRACT TO FUJAIRAH FIRM

Al Shirawi Group of Companies has recently awarded a Dh20 million contract to Fujairah National Construction Co. (FNC) for the construction of their new industrial unit.