Jebel Ali Port still an investment magnet at 40
For Jebel Ali Port and its operating company DP World, the future is all about being “ahead of market expectations”. And if possible, by quite a few strides.
The Port — now marking the 40th year of operations — is one of three initiatives Dubai launched between 1979 and 1985 that then went on to establish the city’s global credentials as a place to do business. In 1985, Emirates airline took off on its first flights, and the same year Jebel Ali Free Zone helped entrench the free zone concept in the UAE and then in the wider region as well.
The Jebel Ali Port on its own contributes 26.1 per cent to Dubai’s GDP, with its terminals handling over 80 ship calls a week.
“Right from inception, we were built to react very fast,” said Sultan Bin Sulayem, Chairman and CEO at DP World Group, while opening the Dh1 billion plus logistics and distribution hub from the Landmark Group.
“What we aim in DP World is for our clients to spend their time running their business and not run after us to make changes. We will keep adapting — and if a business believes we should make changes, we are more than ready.”
Change is a constant state of mind at DP World and Jebel Ali Port, which is now in the midst of adding a fourth terminal. Once complete, it will raise the port’s capacity to 22.4 million TEUs (twenty-foot container units). The third terminal became operational as recently as 2014, with a capacity of 4 million TEU.
This at a time when the global economy runs an immediate risk of slipping into a weaker growth phase fuelled by uncertainty on trade movements. The tortuous US-China talks on trade tariffs keep promising breakthroughs, but nothing concrete is yet to materialise.
In its half-year financial statement, DP World makes a strong reference to the prevailing uncertainties — “The container trade grew by low single digits in the first-half of 2019, but concerns around the trade war continue to weigh on the outlook”.
See the bigger picture
In a statement at the time, Bin Sulayem said: “Whilst the near-term trade outlook remains uncertain with global trade disputes and regional geopolitics causing uncertainty to the container market, the strong financial performance of the first six months leaves us well placed to deliver full-year results slightly ahead of market expectations.”
For the first six months, DP World recorded revenue gains of 31.9 per cent to $3.46 billion, helped by acquisitions, while profits attributable to the owners came to $753 million, up by 26.8 per cent.
“The companies that don’t make it are those that never did see the change happening,” said Bin Sulayem at the Landmark Group event. “We are ready to cooperate with any business that comes to us — not just here in Dubai but through the other 80 facilities we have around the world.” (This year, the company would have incurred a capital expenditure of up to $1.4 billion, for expansion in Dubai, at London Gateway, and Sokhna in Egypt, among others.)
A port of call
Four decades on, the Jebel Ali port and free zone asserts an influence as a place to be for businesses. Just days after Landmark Group, the $5 billion plus retail powerhouse, launched the “mega distribution centre”, another company, AquaChemie, a chemicals distributor, confirmed investments of Dh150 million in Jebel Ali Port on a new chemical terminal facility. It will be commissioned by mid-2021.
“The new facility will directly boost DP World revenues from the port; both by increase in cargo handling, as well as lease rentals,” said Subrato Saha, Co-founder and Director of AquaChemie M.E. “The project will facilitate the manufacture and distribution mode that will see certain products being processed or manufactured regionally and sold globally.”
More than 40 years after the first ship called in at Jebel Ali Port, the destination clearly has a lot more to give. And well ahead of market expectations.
It was in 1975 that the late Sheikh Rashid Bin Saeed Al Maktoum decided Dubai needed to be “brought into a new age of trade and commerce”.
The Jebel Ali Port opened on February 26, 1979, with the British royal yacht, HMY Britannia with Queen Elizabeth II on board, dropping anchor. It was the largest man-made harbour in the world and visible to the naked eye from space.
Between 2003 and 2013, Jebel Ali Port handled 100 million TEUs (twenty-foot container units).
The Port can simultaneously handle 18 container ships, including those of 20,000 TEU capacity and above.