Agility Mulls Expansion in Asia, Wins Contract With Norway's Aker Kvaerner

Davos, Switzerland (AHN) - Agility, Middle East's largest logistics company, mulls acquisitions in China and earmarks $1 billion in India as it seeks to cut dependence on U.S. government contracts.

In a related development, Agility's Houston, Texas-based specialty unit, Agility Project Logistics and Oslo-based Aker Kvaerner ASA have signed a new multi-year agreement.

"We're very bullish on China because it's critical to our customers to have a strong China presence,'' Managing Director of the Kuwait-based logistics giant Tarek Sultan al-Essa, said Sunday in an interview with Bloomberg at the World Economic Forum in Davos, Switzerland. " In India, we feel there's a big opportunity for companies that commit to develop infrastructure.''

Agility is part of a group led by DynCorp International Inc. that won a $50 billion contract to provide cargo shipping, storage and fuel distribution services to the U.S. Army. Sales fell to 30 percent of revenue last year from 40 percent in 2006 as U.S. withdraw troops from Iraq, according to al-Essa. The U.S. plans to withdraw about 30,000 troops from Iraq by July.

Acquisitions this year will help boost Agility's annual sales in China to $1 billion in two years from about $300 million now, al-Essa said. The company operates in 36 Chinese cities and wants to expand geographically, he said, without specifying the names or size of any possible targets.

In India, the company has spent $200 million on land and now plans to spend $800 million building warehouses, transportation networks and agricultural logistics facilities upon it, al-Essa said.

In a statement sent to logisticsonline.com, Agility Project Logistics will handle freight forwarding and project shipping needs to any operating unit or company of the Aker Kvaerner, Norway's leading engineering, procurement and construction firm.

The contract runs through 2012 and covers a wide range of industries, including oil and gas, chemicals, mining and power generation.

Agility is in talks with international partners for infrastructure projects worth $10 billion in the Philippines, and last year started a Dubai-based private equity unit, Alcazar Capital Ltd., with $300 million of seed capital.

Alcazar has started investing in communications ventures and "sees a lot of opportunity in emerging market telecoms," al- Essa said. In September, the company provided Iraqi phone company Korek Telecom with a $250 million convertible loan and in November joined France Telecom SA to buy a controlling 51 percent stake in Telkom Kenya.

Agility's sales rose to about $6 billion in 2007 from $5 billion a year earlier and emerging-markets expansion will help boost sales to more than $7 billion in 2008, al-Essa said.