Velocity Investments and Logistics Services is based in Abu Dhabi, and was recently established to act as
an asset manager for opportunistic investments related to logistics, warehousing and cargo
transportation industry in the Middle East and Africa region. Velocity Investments and Logistics Services
LLC is wholly owned by SinoGulf Real Estate Investments LLC.
Velocity is a multi-faceted management company with industry specific skills in industrial warehousing,
real estate asset management, company turnaround acquisitions and mergers within the logistics
industry, specifically within the Middle East and Africa Region. The Velocity team is made up of
seasoned professionals and headed up by a 20 year veteran of the logistics and transportation industry.
The Logistics Industry
The worldwide contract logistics industry grew by nine per cent to just over $140bn in 2007, according
to new figures published in Transport Intelligence's latest benchmark report, Global Contract Logistics
2008. The logistics sector was helped in Europe by strong low double-digit growth in the UK, Europe's
largest market. Finland, benefitting from its strategic location as a gateway to Russia, was also one of
the fastest-growing markets.
All the markets in the Central and Eastern European region expanded significantly faster than their
western counterparts, as foreign investment in manufacturing facilities and the trend towards 'near-
sourcing' continued. Growth rates in Germany and France were solid as the manufacturing and retailing
sectors in both countries held up well.
So far, the slowdown seems only to have affected the US market to any degree. That country's contract
logistics market grew by just under seven per cent in 2007 which represents a significant drop from its
10 per cent plus growth in 2006.
The logistics and transportation industry in the Middle East and Africa region is poised for amazing
growth, despite a global economic downturn. quot;The world economy might be struggling but huge
volumes in the region will continue to drive growth in the Middle East's logistics Industry,quot; Bengt
Ekstrond, CEO of Gulf Agency Company (GAC). He went on to say: quot;With increasing cargo volumes and
strategic location between the West and Far East, regional economies are developing world-unique
transportation logistics infrastructure, which will eventually impact global economy in terms of trade
The Market Opportunity
According to regional analysts, investments in the regional logistics industry will reach $60bn (Dh220bn)
in the next five years as new international companies set up offices and existing companies embark on
aggressive expansions of their operations. Investments in warehouses alone, a key element in the
logistics industry are expected to reach $50bn in the next two years as a result of both private and
government funded developments.
The market will be significantly impacted if the rumoured change in the Agency law happens in the UAE,
which will then logically be introduced in surrounding markets. It may well be that the change in the
UAE legislation will come initially through an amendment which will remove the exclusivity of agencies.
This would have almost the same effect as legislation making it easier to change agents.
When this change occurs, it will have a dramatic effect on the logistics industry in this region. Principle
manufacturers will no longer have exclusive distributors in each emirate will to hold and finance stock
and aftermarket parts inventories. When distributors are forced to compete, prices will be hit and
distributors will demand the manufactures hold a central stock and parts storage for the country, and
provide items on a JIT basis based on actual sales. As a result, all of the small redundant inventories
being managed by small niche logistics players will disappear. Only the medium to large logistics players
with regional networks will be in a position to hold and distribute inventories for the primary
Market Opportunity: Private Equity
The major area of opportunity within the Logistics and Transport industry in this region is Private Equity
investments. Considering the number of logistics and transportation companies that exist today within
the Middle East and Africa region, and the anticipated growth the logistics and transport industry
combined with the subsequent growth of companies coming to the region, competition will be
increased and margins will be hit. Typically, this is the prelude to consolidation with-in the industry.
Private equity investments will be focused on companies that when combined, become a regional
network that allows for linking the regional markets with the rest of the world.
Our vision of this network has the following nodes:
Targeted Port Cities in the GCC:
• Abu Dhabi
**Note: These chosen operating locations are based on transport and logistics positioning that allows
for rapid distribution to all large population centers in the region. The Kingdom of Saudi Arabia will be
handled by a Logistics Partner Company.
Container Freight Services (CFS)
Trade Finance – Shariah compliant
• Sea Freight/Shipping Services
• Air Freight
• Express Delivery – Just In Time
• Aircraft Charter
• Exhibition Services
• Climate Controlled
• Cold Storage
• Hazardous Materials
• Material Handling
• Packing, Marking, Labeling
Supply Chain Management
• Warehouse Logistics
• Logistics Optimization
• Service Improvement
• quot;Parts Bankquot; Multi-User Inventory management
• Inventory Planning
• Freight Forwarding
• Freight Cost Reduction
• Freight Cost Benchmarking
Inbound Shipment Management
Velocity is well positioned to find opportunistic private equity investments because of the team’s
experience. The Velocity tem will look for and identify Logistics and Transport companies that are either
in need of turnaround and expansion value creation, or the potential to acquire and merge smaller
companies into a larger whole, creating value through economies of scale and larger capacity.
Vision of our future
Velocity will focus on making strategic acquisition investments in logistics companies in order to create
value through a regional network of warehousing and distribution points, backed by a full set of services.
The final network and asset package will become an integrated regional network and a major
international logistics entity.
Principal investment objective
The principal investment objective of the Company is to make opportunistic private equity investments
focused in the UAE, but with opportunistic investments in MEA locations with the goals of: (i)
maximising total returns from a combination of income and capital appreciation, (ii) the generation of
long-run, contract backed, sustainable revenue streams that can easily be securitised and (iii) evaluating
possible partial Exit Opportunities via either a conversion to a Public Joint Stock Company, the partial
securitisation of established revenue streams or partial private sale.
The Velocity Team:
David is a twenty year veteran of logistics and transportation industry in this region, with a large portion
of his career at FedEx. He was the Managing Director and Chief Operating Officer for FedEx Logistics in
Dubai. In this capacity he was responsible for the start-up of the regions first FedEx Logistics subsidiary,
which is responsible for third party management of customers supply chains. Other services included
third party warehousing, inventory management and visibility, warehouse management, and
Prior to that David was the Managing Director of Regional Sales for FedEx Express in the Middle East,
Indian Subcontinent and Sub Sahara Africa. In this position he was responsible for the sales activities and
development of 8 District Sales Managers and 85 Sales Professionals across the Middle East, India and
Robert Waugh BSc MBA
Robert joined SinoGulf in 2006 from PwC Advisory Services in Abu Dhabi where he worked as a manager
in the corporate finance team. Previously Robert spent 7 years in operations as a Senior Supply Chain
Manager at Unilever South Africa.
While at Unilever he gained extensive industrial experience in operations & logistics management,
procurement & inbound supply chain, capital projects, engineering & maintenance, change
management and organisational restructuring.
Hussain S F Al Awlaqi BSc
Hussain is one of the founders of SinoGulf; he was previously a partner with The International Investor
(TII) where he concentrated on capital formation, real estate Islamic securitisation and technology
opportunities in the MENA region. Before joining TII Hussain worked for Abu Dhabi Investment
Company where he specialised in Islamic investments, IPOs and mergers & acquisitions. Hussain has also
held managerial positions at Abu Dhabi Gas Liquefaction Company and the Emirates Centre for Strategic
Studies and Research.
Andrew Clout BSc
Andrew is one of the founders of SinoGulf; he originally moved to the Gulf in 1992 to join the newly
formed The International Investor (TII) based in Kuwait, where he held several senior positions within
the Product Development and Structured Finance groups. In 2000 Andrew transferred to TII’s UAE
office, holding responsibility for its technology and e-commerce transactions within the region. In 2002
Andrew left TII to become the General Partner for Innoventure Partners.
Chris Orrell BSc Eng MBA CFA
Chris is an experienced Board-level advisor and financial analyst with extensive leadership experience in
managing large professional teams. Chris is skilled in managing organizational operations by directing
and coordinating activities consistent with established goals, objectives and policies. Chris has many
years experience working in financially regulated and ISO self regulated organisation including 7 years
with Pricewaterhouse Coopers (PwC) in London and the UAE.
Velocity will at first focus on deal procurement, specifically in:
Private Equity Mergers and Acquisitions in the Logistics and Transport Industry
Once private equity deals are secured, Velocity will concentrate on value creation through the use of
staff experience in business turnaround processes and by targeting and acquiring other complementary
companies for the purpose of creating a larger company with greater value than the sum of its parts.
Initial investment analysis
The initial investment process is a relatively detailed analysis performed by all relevant in-house
SinoGulf parties, including financial analysts, Velocity management, and legal consultants. The depth of
the analysis will be dependent on the time available prior to having to secure the investment. SinoGulf
has the in-house knowledge and expertise to provide a sufficient level of analysis to enable decision
making, on most asset types, within two working days.
This initial investment analysis involves:
• Ensuring the investment opportunity is consistent with the agreed strategy of the Company;
• A top down review of the investment against current market conditions to understand the relative
attractiveness of the opportunity to other assets held;
• Review of the legal, development and operational conditions of the investment;
• High-level discussion and documentation of the inherent risks of the investment;
• A bottom-up financial model that captures the principal drivers of the investment opportunity and
enables the key risks to be evaluated and more fully understood;
• Discussion on the possible structuring of the investment to enhance the Company’s potential return;
• A brief report on the investment opportunity stating a recommendation as to whether the asset
should be secured.