KHALED AL KHAWALDEH (ABU DHABI)
Etihad Credit Insurance (ECI), the UAE Federal export credit company, in collaboration with Abu Dhabi Exports Office (ADEX), signed an agreement with Trafigura, a global leader in global commodities industry, aimed at streamlining and advancing the export of aluminium and other non-hydrocarbon exports from the UAE.
The agreement which involved several financial institutions in the UAE, including First Abu Dhabi Bank (FAB), and Natixis Corporate and Investment Banking (Natixis CIB), will see Trafigura receive a $150 million revolving credit facility for two years to finance its acquisitions of non-hydrocarbon commodities originating from the UAE.
The idea is that Trafigura will acquire the commodities, with the intention of exporting and re-exporting, thus cementing the UAE’s position as a vital hub in global trade networks.
“The UAE is a very strategic market for traffic and it is a market that we’ve been operating in for many years, and that we have a lot of prospects for the future in terms of being able to grow further,” Suresh Mistry, the head of Non-Banking Distribution and Structured Finance at Trifugura told Aletihad at the signing ceremony held at Abu Dhabi’s Rixos Marina Hotel.
“I think the facility is a very strategic tool for Trafigura. It brings together and emphasises the partnerships that we have within the region. It is critical to get the financial industry on board.”
Mistry explained that due to the volatility of the commodity prices, getting proper financing was crucial to utilising the UAE as an export base. He said whilst the firm would initially focus on aluminium, he saw potential for the export base to grow substantially in the future.
“If I look at the UAE, and the Middle East in general, I think it’s going to become, if not already, one of the largest markets we have globally. I think there’s a very strong ethos in the region to grow and to be a dominant player in global supply chains,” he said.
“You can definitely feel that and see that in terms of the investments that are coming into the region itself. And I think a region that was once at the forefront of hydrocarbons, we’re certainly now starting to see a diversification. So, you’re seeing a lot more sustainability orientated projects and a real drive.”
As part of its overarching economic vision, the UAE has sought to diversify its industrial base, hoping to become both a logistics and industrial hub. This has seen major investments made into manufacturing and logistics infrastructure including the enormous specialised industrial zone known as Khalifa Economic Zones Abu Dhabi (KEZAD).
At the Hili Forum held in Abu Dhabi on Monday, UAE Minister of State for Foreign Trade, Dr. Thani bin Ahmed Al Zeyoudi, said the UAE was intentionally positioning itself as a hub where global traders and manufacturers could take advantage of its extensive network of ports and free trade agreements.
“The agreement is a continuation of our effort to expand the scope of partnerships, so that we can further unify our initiatives to support and develop national exports by providing flexible and reliable financing. This partnership with national and international banks and other financial institutions aligns with UAE economic diversification goals and underscores our belief that united efforts lead to transformative success,” Khalil Al Mansoori, Director General of ADEX said.