AD Ports, Al Fanar Gas to establish KEZAD Industrial Services company

Khalifa Economic Zones Abu Dhabi - KEZAD Group, the integrated trade, logistics, and industrial hub of Abu Dhabi, has announced the signing of an agreement to form a joint venture between its parent company AD Ports Group, and Al Fanar Gas Group, part of UAE’s leading diversified conglomerate, Ethmar Holdings. The new company, “KEZAD Industrial Services”, will oversee the enhancement of multiple offerings to industrial customers and will continually assess and develop new specialised offerings.

Headquartered in Abu Dhabi, with a range of subsidiaries across the UAE, Al Fanar Gas Group provides engineering, procurement, construction, and maintenance services for major developers, consultants, and contractors across public and private sector projects. Its parent company, Ethmar Holdings, covers a wide range of markets internationally, including the Middle East, Asia, the United States, and South America.

KEZAD Group’s integrated business ecosystem is home to more than 1,750 investors from 17 key industrial sectors. It covers 550 square kilometres, including more than 40 staff accommodation complexes under its subsidiary KEZAD Communities. The new entity will invest in developing new infrastructure and capabilities for superior management of its assets and widening the offerings being provided to customers.

Abdullah Al Hameli, Chief Executive Officer of Economic Cities & Free Zones, AD Ports Group, said, “KEZAD Group is steadfast in its commitment to providing the highest level of services to our clients, including robust infrastructure and services for manufacturing and distribution activities across the industrial and logistics ecosystem. We know this is a key differentiator for companies in strategic industries, who need to be able to scale their operations quickly.

“Launching a new business division focused on these areas raises the level of service and safety available to our clients. The establishment of ‘KEZAD Industrial Services’ with Al Fanar Group will ensure improved efficiency, access to superior services and increase overall competitiveness for all our customers.”

Moustafa Rashad, Group CEO, Al Fanar Gas Group, said, “We are proud to have a strong and long-lasting relationship with AD Ports Group and KEZAD Group. It was mutually agreed to strengthen our alliance to deliver greater services and further develop the industrial ecosystem together. We have a deep understanding of industrial customers in the UAE and across multiple international geographies that we will leverage to introduce new products and services through the Joint Venture with KEZAD Group.”

Meanwhile AD Ports Group on last week announced that it had signed an agreement to acquire an 80 per cent equity stake in Dubai-based Global Feeder Shipping (GFS), a global container shipping company.

The total purchase consideration for the 80 per cent stake amounts to Dhs2.9 billion ($800 million), implying a 100 per cent Enterprise Value of Dhs3.7 billion ($1.0 billion), with the acquisition being fully funded through a new acquisition loan.

This earnings and value-accretive strategic investment significantly broadens AD Ports Group’s global feeder shipping footprint and contributes to its long-term strategy to become one of the world’s premier short-sea and feeder shipping players.

GFS’ LTM financial performance was strong, with revenue of $1,085 million, Ebitda of $521 million (Ebitda Margin of 48 per cent), and net profit of $481 million.

The company has built one of the largest fleets of container ships globally, featuring 26 owned and operated vessels with a total capacity of 72,500 TEUs, covering the Middle East, Indian Subcontinent and Southeast Asia with services connecting the UAE to India, Pakistan, Sri Lanka, Egypt, Sudan, Djibouti, Yemen, Kingdom of Saudi Arabia, Bahrain, China, South Korea, and Vietnam, among others. AD Ports Group will look to integrate GFS into its Maritime Cluster, which already offers a comprehensive portfolio of shipping, offshore and subsea services.

Aligning GFS services with AD Ports Group companies Safeen Feeders and Transmar will make AD Ports Group the world’s largest independent feeder company by vessels owned, with an owned fleet of 35 vessels, and the third largest globally by volumes carried with a total container capacity of 100,000 TEUs.

The acquisition will boost AD Ports Group’s trade activities and connectivity to core markets and enhance its feedering business, providing significant economies of scale through an expanded route network and fleet. In addition, the acquisition will further strengthen the company’s hub and spoke model by linking core markets in the Gulf, Indian Subcontinent, Red Sea, and Turkey to its key port assets, including Khalifa Port.

GFS’ integration with Safeen Feeders’ services has the potential to generate significant operational synergies.