Identifier
Created
Classification
Origin
06KUWAIT4621
2006-12-11 14:25:00
CONFIDENTIAL//NOFORN
Embassy Kuwait
Cable title:
AMBASSADOR'S COURTESY CALL ON LOGISTICS GIANT
how-toVZCZCXRO1757 OO RUEHDE RUEHDIR DE RUEHKU #4621 3451425 ZNY CCCCC ZZH O 111425Z DEC 06 FM AMEMBASSY KUWAIT TO RUEHC/SECSTATE WASHDC IMMEDIATE 7847 INFO RUEHZM/GULF COOPERATION COUNCIL COLLECTIVE PRIORITY RUEHBJ/AMEMBASSY BEIJING PRIORITY 0468 RUEHNE/AMEMBASSY NEW DELHI PRIORITY 0372 RUEHBI/AMCONSUL MUMBAI PRIORITY 0198 RUEKJCS/SECDEF WASHINGTON DC PRIORITY
C O N F I D E N T I A L KUWAIT 004621
SIPDIS
NOFORN
SIPDIS
DEPT FOR NEA/ARP, EB
E.O. 12958: DECL: 09/12/2016
TAGS: ECON ETRD KU
SUBJECT: AMBASSADOR'S COURTESY CALL ON LOGISTICS GIANT
"AGILITY"
Classified By: Ambassador Richard LeBaron for reasons 1.4 (b) and (d)
C O N F I D E N T I A L KUWAIT 004621
SIPDIS
NOFORN
SIPDIS
DEPT FOR NEA/ARP, EB
E.O. 12958: DECL: 09/12/2016
TAGS: ECON ETRD KU
SUBJECT: AMBASSADOR'S COURTESY CALL ON LOGISTICS GIANT
"AGILITY"
Classified By: Ambassador Richard LeBaron for reasons 1.4 (b) and (d)
1. (C) On December 10, Ambassador made a long-planned
courtesy call, postponed several times previously due to
scheduling conflicts, on Tarek Sultan, Chairman and Managing
Director of Kuwait's global logistics company Agility for a
discussion of the logistics industry. (Agility, known until
recently as The Public Warehousing Company, or PWC, is among
the fifteen largest global third-party logistics providers
with revenue in 2005 of USD 4.5 billion. Agility employs
20,000 people worldwide in over 450 offices. The company has
been embroiled in a public dispute with the GOK after the
Audit Bureau, an independent entity whose chairman is
nominated and approved by parliament, terminated three
Agility contracts dating back to 1999 due to alleged
contractual violations. Agility stock plummeted in late
November, triggering a sell-off that contributed to the
Kuwait stock market's plunge to a four-month low. Agility
stock and the Kuwait Stock Exchange have since rebounded
somewhat.)
2. (C) Sultan said Agility was well-positioned to compete
and grow successfully in the long-term, particularly in
emerging markets such as India, China, and Southeast Asia.
Sultan described Agility as more "entrepreneurial" than most
logistics companies, with a "build-it-yourself" approach to
the industry. He particularly liked Agility's prospects in
India, where it is already among the leading logistics
companies, with a base in Mumbai and representation in more
than 30 cities. He said he enjoys working in India, where
the work ethic and commitment to education are strong.
Sultan said he plans to use India increasingly as a base for
outsourcing business. He commented that China, where Agility
has worked for 20 years, is an attractive but more complex
market than India, and perhaps more geared toward a model of
multiple general managers rather than a single CEO.
3. (C) Turning to Agility's confrontation with the
government over terminated contracts, Sultan said his company
was being singled out by certain members of parliament,
including the Islamist bloc, who perhaps resented Agility's
success as well as its extensive business dealings with the
USG. He admitted that Agility had not cultivated a support
base in the National Assembly. He described the Audit
Bureau's tactics as a "witch hunt without rules," as the
Audit Bureau never filed charges with the appropriate courts
before moving against Agility. There was no rhyme nor reason
to the particular contracts the Audit Bureau canceled, he
said; rather, the move was "symbolic." Sultan suggested such
actions call into question Kuwait's commitment to reform.
"The government says one thing and does something else," he
said. "We are moving backwards." Agility has appealed the
action and has been given a court date two days hence
(Comment: Unusually fast for the Kuwait legal system).
Sultan argued that there should be a standard for reviewing
contracts to minimize vendettas and government
capriciousness. He charged that the moves send a negative
signal to investors and will make banks wary of supporting
large-scale Kuwaiti infrastructure and development projects
in the future.
********************************************* *
For more reporting from Embassy Kuwait, visit:
http://www.state.sgov.gov/p/nea/kuwait/?cable s
Visit Kuwait's Classified Website:
http://www.state.sgov.gov/p/nea/kuwait/
********************************************* *
LEBARON
SIPDIS
NOFORN
SIPDIS
DEPT FOR NEA/ARP, EB
E.O. 12958: DECL: 09/12/2016
TAGS: ECON ETRD KU
SUBJECT: AMBASSADOR'S COURTESY CALL ON LOGISTICS GIANT
"AGILITY"
Classified By: Ambassador Richard LeBaron for reasons 1.4 (b) and (d)
1. (C) On December 10, Ambassador made a long-planned
courtesy call, postponed several times previously due to
scheduling conflicts, on Tarek Sultan, Chairman and Managing
Director of Kuwait's global logistics company Agility for a
discussion of the logistics industry. (Agility, known until
recently as The Public Warehousing Company, or PWC, is among
the fifteen largest global third-party logistics providers
with revenue in 2005 of USD 4.5 billion. Agility employs
20,000 people worldwide in over 450 offices. The company has
been embroiled in a public dispute with the GOK after the
Audit Bureau, an independent entity whose chairman is
nominated and approved by parliament, terminated three
Agility contracts dating back to 1999 due to alleged
contractual violations. Agility stock plummeted in late
November, triggering a sell-off that contributed to the
Kuwait stock market's plunge to a four-month low. Agility
stock and the Kuwait Stock Exchange have since rebounded
somewhat.)
2. (C) Sultan said Agility was well-positioned to compete
and grow successfully in the long-term, particularly in
emerging markets such as India, China, and Southeast Asia.
Sultan described Agility as more "entrepreneurial" than most
logistics companies, with a "build-it-yourself" approach to
the industry. He particularly liked Agility's prospects in
India, where it is already among the leading logistics
companies, with a base in Mumbai and representation in more
than 30 cities. He said he enjoys working in India, where
the work ethic and commitment to education are strong.
Sultan said he plans to use India increasingly as a base for
outsourcing business. He commented that China, where Agility
has worked for 20 years, is an attractive but more complex
market than India, and perhaps more geared toward a model of
multiple general managers rather than a single CEO.
3. (C) Turning to Agility's confrontation with the
government over terminated contracts, Sultan said his company
was being singled out by certain members of parliament,
including the Islamist bloc, who perhaps resented Agility's
success as well as its extensive business dealings with the
USG. He admitted that Agility had not cultivated a support
base in the National Assembly. He described the Audit
Bureau's tactics as a "witch hunt without rules," as the
Audit Bureau never filed charges with the appropriate courts
before moving against Agility. There was no rhyme nor reason
to the particular contracts the Audit Bureau canceled, he
said; rather, the move was "symbolic." Sultan suggested such
actions call into question Kuwait's commitment to reform.
"The government says one thing and does something else," he
said. "We are moving backwards." Agility has appealed the
action and has been given a court date two days hence
(Comment: Unusually fast for the Kuwait legal system).
Sultan argued that there should be a standard for reviewing
contracts to minimize vendettas and government
capriciousness. He charged that the moves send a negative
signal to investors and will make banks wary of supporting
large-scale Kuwaiti infrastructure and development projects
in the future.
********************************************* *
For more reporting from Embassy Kuwait, visit:
http://www.state.sgov.gov/p/nea/kuwait/?cable s
Visit Kuwait's Classified Website:
http://www.state.sgov.gov/p/nea/kuwait/
********************************************* *
LEBARON