Anham replaces Agility as US military supplier

Dubai-based Anham has won a $2.2 billion (Dh8.08bn) contract to provide food and support services to the US military in Kuwait, Iraq and Jordan after Kuwait-based logistics firm Agility was replaced as the main supplier following indictments for overcharging.

Anham, an investment holding and services company, is a leading contractor in the Middle East, North Africa, Central Asia and Europe including Iraq, Afghanistan, Russia and Libya. "It is with great gratitude and a compelling sense of duty that all at Anham welcome the award to expand our support for those serving in the Middle East.

"We have a long track record of meeting and exceeding the contract requirements and expectations of our clients, the United States Government, and all stakeholders. Our capable team will continue to build upon its legacy of delivering the best services at the best value to American taxpayers and the United States Government. We look forward to a continued partnership with the Department of Defense," said a company statement.

Anham contracts with local companies to structure ventures in emerging markets and has backing from Saudi Arabia, Jordan and a Virginia, US company. The announcement follows a decision announced this week by the US Defense Logistics Agency (DLA) to replace Kuwait's Agility as the main supplier to the US military in the Gulf.

That decision followed a new indictment on Monday accusing Agility of fraud in $8.5bn worth of contracts first signed in 2003 to supply the US Army in the Gulf. The DLA has suspended the firm, formerly Public Warehousing Company, from bidding on new contracts and Agility is in talks with the US Department of Justice to settle the case.

The firm said in a bourse statement on Thursday the US DLA has appointed a new company as the main supplier in the area, but that Agility will continue to supply the US military for six months "to guarantee continuity of supplies".

"This will affect them in the short-term with the contracts they lost, but they had diversified activities three to four years ago," said independent economic analyst Mustafa Behbehani.

He said Agility's deferred profits and operational revenues will help it overcome difficult times. However, Behbehani said the firm would now have to cut expenses.

On Sunday, Agility said its profits for 2009 rose 11 per cent and declared a surprise cash dividend. Agility's first indictment was in November. On Monday, US authorities extended the charges to include two company affiliates: US-based Agility DGS Holdings and Agility DGS Logistics Services, which is based in Kuwait.

If convicted under the False Claims Act, prosecutors say the company faces probation and a fine of up to twice the gain it realised or twice the loss to the US. The company says the original indictment was invalid because it was served against the US subsidiary rather than the parent company it named. The bourse statement did not mention Agility's contracts in Jordan.

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