Which regions are you eyeing for expansion and what factors do you take into consideration before entering?
The two regions in which we are looking to expand are Sub-Saharan Africa (SSA) and developing Asia. These regions are emerging as the fastest growing in the world, with overall GDP growth projections over 3%, and in some countries as high as 5-7%, compared to so-called advanced markets, where the expected average growth rate is just 1-2%. Several factors are taken into consideration when we enter a new market—macroeconomic drivers, micro factors, the market opportunity, regulatory and governance frameworks, the impact the business would have on a local level, and the ease with which incoming businesses can navigate these markets. The SSA region, for example, emerged as the second-highest adopter of reforms in the World Bank's 2017 Doing Business report, indicating an improving landscape for investment. Adding to this, these economies are witnessing growing urbanization and digitization, propelled by a youth bulge and a rapidly expanding middle class, which creates real opportunities, not just in consumer sectors, but also in infrastructure, energy, construction, and financial services.
Why did Crescent Enterprises choose to expand its port management business to the US, and do you expect to see new opportunities for growth in the market?
Over the last few decades, the investment made toward upgrading US port infrastructure has been grossly inadequate. Today, not a single US container port is in the top-15 container ports globally according to the Journal of Commerce. Expanding trade has put severe pressure on the existing system, increasing congestion and threatening US economic competitiveness. The American Society of Civil Engineers in its 2017 report estimates a USD4.5 trillion investment gap over the next eight years to meet the country's infrastructure needs, which includes ports. Hence our US expansion was driven by the glaring need for modernization and upgrading of US port infrastructure. We believe there is a huge opportunity for Gulftainer, which operates some of the most productive ports in the world, to invest in building modern port infrastructure and offer increased efficiency and quick and nimble services that add value to the supply chain. In Port Canaveral, we have successfully commenced operations with a planned investment of USD100 million to revamp the terminal infrastructure, add new equipment, and develop human capital. To add to this, Gulftainer opened a 40,000-sqft. warehouse in the port last year to bolster its on-site logistical capabilities. Building on Gulftainer's success in Port Canaveral, we are keen to expand in areas that fit within our strategy of value creation and long-term development, especially in the medium-sized container terminal segment.
Do you think the region's entrepreneurial ecosystem is on the right track? What are the gaps in today's market?
It is a source of pride to see the UAE lead in the space, with the likes of Souq.com and Careem emerging as recent champions of the region's entrepreneurial ambitions. However, even as we witness rapid growth in the start-up arena, in real terms we fall behind in areas such as internationalization, start-up skills, and process innovation—aspects that differentiate global innovation hubs as sources of economic value and meaningful change. While profitability and financial returns continue to be primary drivers, we stand a better chance at long-term success by building strong global brands, generating jobs and developing essential skills, and moving from being just a solutions utilizer to a solutions provider. At Crescent Enterprises, we are channeling this approach through CE-Ventures, which is our internal incubation division that follows a social enterprise model of business, one that puts people, planet, and profits into a symbiotic framework and generates a multiplier effect on impact. The goal here is to build responsible, sustainable, and change-evoking start-ups, which are grounded in innovation, and at the same time focus on maximizing stakeholder value creation and generating sustainable opportunities for our youth.