AD Ports Group and China's Shandong to build Middle East's first tyre hub in Abu Dhabi

Emirate's economic diversification programme expected to make headway with 150,000 sq metres storage and distribution centre at Kizad

AD Ports Group and Shandong Port Group will build the 150,000-square-metre tyre hub at Kizad. Photo: AD Ports

AD Ports Group, the operator of industrial cities and free zones in the emirate, and China's Shandong Port Group signed an agreement to establish the region's first tyre storage and distribution centre, a move that will strengthen the capital's push for a diversified economy.

The 150,000-square-metre facility will be built at Khalifa Industrial Zone Abu Dhabi's industrial cities and free zone cluster, and will be a base for warehouse management, logistics, distribution and re-export services from Micco Logistics under AD Ports' logistics cluster and Safeen Feeders under the maritime cluster.

“The UAE is emerging as a principal facilitator of global trade and a fast-developing industrial destination that complements China’s Belt and Road Initiative. We are pleased to see greater level of Chinese industrial interest and investment in Abu Dhabi," Mohamed Al Shamsi, managing director and group chief executive of AD Ports Group, said on Thursday.

“Intensifying economic partnership through ports and economic free zones is a strategic imperative in our nation’s efforts towards economic diversification."

The global tyre market posted moderate growth from 2015 to 2020, but it is expected to grow at a compound annual growth rate of about 4 per cent during 2021 to 2026, mainly influenced by the effects of the Covid-19 pandemic on demand, data from iMarc Group shows.

AD Ports Group's agreement with SPG is the latest in a string of deals finalised by the operator to position Abu Dhabi as a key trade and logistics centre.

Earlier this week, Mr Al Shamsi said the group aims to explore opportunities in regional and international markets by signing international partnership agreements.

Last week, AD Ports Group signed multiple strategic partnership agreements with Jordan’s Aqaba Development Corporation that aims to develop tourism, logistics, transport and digital infrastructure.

In November, it signed an agreement with the Egyptian Group for Multipurpose Terminals to develop and operate a multipurpose terminal in Safaga Port on the Red Sea.

The AD Ports-SPG deal also highlights the growing ties between the emirate and China. Abu Dhabi's Etihad Airways and Henan Province Airport Group, the parent company of central China gateway Zhengzhou Xinzheng Airport, on Monday signed a preliminary agreement to create an "Air Silk Road" aimed at boosting air cargo operations.

In November, First Abu Dhabi Bank, the UAE's biggest lender by assets, announced that it will expand its international network with the opening of its first branch in China in the first quarter of 2022.

Li Fengli, general manager of SPG, said the partnership with AD Ports will yield opportunities for the wider port and logistics industry, as he expects the sector's outlook to remain positive as consumer demand triggers major transformations across the global supply chain.

"We are confident that our synergy with AD Ports Group will yield opportunities for the port and logistics industry. The outlook remains positive as consumer demand triggers major transformations across the global supply chain," Mr Li said.

In November, AD Ports Group reported a 22 per cent rise in revenue during the first nine months of 2021 on the back of volume growth, business diversification and new partnerships.