Interview: Agility’s Tarek Sultan on the company’s expansion strategy and sustainability goals

Global supply chain services, aviation and infrastructure company Agility achieved a number of milestones in 2022.

The Kuwait-headquartered group, which employs over 45,000 people across six continents, acquired Menzies and merged it with NAS, creating the world’s largest aviation services company by countries served. The company operates in about 70 countries across six continents.

Last year, the group’s Tristar unit acquired a majority stake in HPG Storage, which meant a major expansion of its fuel storage capacity and distribution capability in 29 countries. In 2022, it also announced a $163m investment in building a new logistics park outside of Jeddah, Saudia Arabia, alongside existing warehousing complexes in Riyadh and Dammam.

In H1 2023, the company’s net profit rose 2.3 per cent reaching KWD29.48m.

Tarek Sultan, vice chairman of Agility, who is also a key member of the World Trade Organisation’s Business Advisory Group, shares the company’s sustainability goals, key global trends impacting the logistics and supply chain sector and the importance of supporting SMEs and fair trade, which he strongly advocates.

Here are excerpts of the interview with the Agility VC

What is the key strategy driving Agility’s growth, expansion, and diversification?
Agility is a different business than it was two years ago. Today, we have two parts to our business. First, the businesses we own and operate. This includes the world’s largest aviation services company (Menzies Aviation), a global fuel logistics business (Tristar), a logistics parks developer and operator in the GCC, Africa, and South Asia, and customs digitisation, remote-site services, and digital logistics businesses.

Second, our investments; minority stakes in listed and non-listed companies. This includes being the second largest shareholder in DSV, the world’s third-largest logistics and freight forwarding company, along with a growing number of venture investments in technology companies innovating in clean transport, alternative energy, e-commerce enablement, and more.
Our focus is on accelerating growth across our operating businesses, with each business following its own roadmap. Agility has a strong track record of building and scaling both global and emerging market businesses, deep expertise in supply chain services, and a commitment to strengthen the building blocks of global trade.

What are the key trends influencing the supply chain, logistics, and transportation industry?
The forces reshaping supply chains are profound. They include: Geopolitics – US-China friction, Brexit, the crisis in Ukraine and parts of Africa and the Middle East – is giving rise to renewed trade protectionism and a desire to shield supply chains by moving or diversifying production.

Sustainability – including both regulatory and technological changes – is a key factor for the industry. Broadening recognition of the dangers posed by climate change is having both negative and positive effects on supply chains. On the one hand, we’re experiencing climate- and weather-related events that are enormously disruptive and, in the most extreme cases, threatening lives as well as trade and commercial activity. On the other hand, those threats are driving a consensus for change that will revolutionise energy production, transportation, and building materials. They are forcing us to rethink our use of precious resources such as water, and to make changes in what and how much we waste. Hopefully, we are on a path toward a cleaner, safer planet.

Consumption patterns and consumer preferences have been permanently reshaped by both technology and the pandemic. That’s why we’ll see continued acceleration of cross-border e-commerce. Lastly, the world’s continued digital transformation, the proliferation of data, and the use of artificial intelligence (AI) are going to change the nature of work, product-development cycles, production – virtually every element of the supply chain.

What are the steps that can be taken to support fair trade, SMEs and women-led businesses?
We believe that in order to make trade more fair and open to smaller businesses, women-led businesses and enterprises rooted in emerging markets, it’s important to build the ecosystem for more inclusive trade – including investing in infrastructure and technology.

Agility supports this vision through its businesses. Our Shipa businesses were built to serve small and medium-sized companies that needed tools to manage their own logistics. The company’s digital tools give these businesses virtual scale and level the playing field for them when they compete with larger competitors.

The same SME focus has guided our investments in e-commerce enablement; companies such as Zid and ShipRocket help smaller enterprises build online businesses and grow their online sales. And e-commerce often creates new opportunities for women as well, including in the MENA region, where the World Economic Forum says one out of three digital businesses are founded by a woman.

Our Agility Logistics Parks (ALP) have developed small, affordable, move-in-ready units for small, local companies that need world-class industrial infrastructure to process, assemble, store and ship. At Reem Mall in Abu Dhabi, we’re setting aside space for smaller companies, as well. In Kuwait, our home base, we have mentored smaller companies, and built the infrastructure and network that helps them bring their ideas and products to market.

We’re proud of the fact that Agility itself has emerging market roots. Our business started in Kuwait, and we’ve built ourselves into a global company that now operates in six continents.

How would you describe responsible leadership and is Agility reflecting these values?
We started almost 20 years ago, so nothing about our approach to sustainability – our ‘term’ for responsible leadership – is new. The three areas that we focused on most in those early years were fair labour, community contributions, and humanitarian response.

At a time when companies in the Middle East and Africa were under intense scrutiny on labour issues, we were developing standards, training, monitoring programmes, and practices intended to safeguard workers’ rights. We were deepening our involvement in the communities where we operate by making targeted contributions in training and education. And we were part of a small number of global companies responding to natural disasters and conflict with expertise and assets intended to speed the delivery of humanitarian assistance. Today, we remain focused on those areas, but we have also increased our investment in innovations aimed at addressing climate change and other ESG issues.

Tell us about Agility’s sustainability targets and the progress made on them.
Our biggest business, Menzies Aviation, has set science-based targets to achieve net zero across all three scopes by 2045. This includes taking an electric-first approach to the procurement of new group support equipment, which includes a lot of the ground vehicles you would see at airports. Menzies is also contributing to industry partnerships to help accelerate the adoption of sustainable aviation fuels and push them to 10 per cent of global fuel supply by 2030 (currently 1 per cent).

The Tristar liquid logistics business is looking to be net zero in line with the UAE’s 2050 target. It expects to introduce biodiesel or alternative sustainable fuels in 2023, and to commission its first hybrid-fuelled coastal barge in 2024. Tristar is also a founding member of the First Movers Coalition, an initiative to decarbonise heavy industry. One of the coalition’s goals is to have at least 5 per cent of deep-sea shipping powered by zero-emissions fuels by 2030.

The ALP business is building new warehousing complexes with sustainability features. The warehouse in Riyadh was the first facility in the GCC to be EDGE Advanced certified, which means it is at least 40 per cent more energy efficient than others in the market. Further EDGE certification for Agility facilities is in progress in India and Côte d’Ivoire.

In Kuwait, a new planned project features a cooling system that aims to reduce electricity consumption from air conditioning by 40 per cent and to implement 100 per cent treatment and reuse of wastewater for cooling and irrigation.
 
Any advice for young leaders in the industry?
My advice would be to look over the horizon constantly, and always be willing and eager to learn. Leaders should be the most curious people in the room, and the most willing to try new ideas. Move fast. Stay close to technology changes, and don’t lose sight of people – those on your team and those you serve.