Egypt port to be mini Jebel Ali

(FILE)   

DP World’s entry into the Egyptian market through the $670 million (Dh2.5 billion) acquisition of Sokhna Port ended almost six years of tough negotiations with the country’s government and port operators.

The Dubai-based company plans to invest a further $1.3 billion in the Gulf of Suez facility.

Sokhna, which is expected to receive 450,000 containers this year, already accounts for a fifth of operations at Alexandria Port.

But Sultan Ahmed bin Sulayem – Chairman of DP World and its parent company, Dubai World – says it will become a “mini-Jebel Ali”.

Sokhna is the closest port to Cairo with its huge population and vast market for goods.

It is the only Red Sea port that offers container-handling services and accommodates ships with loads of up to 180,000 tonnes. It handles 80 per cent of goods coming to Egypt from Asia.

In this interview with Emirates Business, Bin Sulayem explains the background to the deal and his plans for Egypt.

We know you have been interested in Egyptian ports for some time. How did you get to Sokhna?

We have wanted a presence in Egypt for a long time, we wanted to add to our network of ports, which now numbers 43.

Six years ago Sokhna Port President Osama Al Sharif suggested we include the port in our network.

His company had just won a concession from the Egyptian Government to develop and run it.

We waited to see how things would turn out, and actually what we expected to happen has happened.

Despite its small size the port has a unique position and applies modern management systems similar to those used by DP World.

So integrating Sokhna with our ports will not be difficult.

Are you worried opponents of the deal said Egyptian assets should not be sold to foreigners?

These calls do not concern us.

The Egyptian Government has privatised many ports, including Domiat Port and some operations at the east of Suez Canal’s Port Said branch.

I do not think our acquisition of Sokhna amounts to a sale by Egypt – it is still on Egyptian land.

It seems your selection of Sokhna was prompted by the chaos at Egyptian ports?

I do not know what chaos you are talking about. We visited Alexandria and Said Ports and things there are good. Besides, in the ports sector you do not stay in business if you are chaotic.

This industry is highly disciplined – there are specific timings for the entry and exit of ships as well as the unloading and storing of goods. The international system ensures everything is well organised.

What about labour force at the port – how will you deal with it?

If you mean getting rid of them, this will not happen. We will greatly increase the number of labourers and step up operations at the port. We train our staff in all parts of the world.

Is the acquisition of the port a prelude to a larger presence in Egypt?

Sokhna in itself represents a large presence. It uses comprehensive and modern procedures to clear goods. Also we can make improvements that will boost efficiency and production. And the most important thing that drew our attention to the port was the possibility of increasing capacity.

Through our Dubai experience we have learnt that as long as capacity exists, work grows. Capacity attracts demand. Another factor is the port’s ability to handle various types of shipments, from containers to solid and liquid shipments.

This is an added benefit that puts it on the same level as Jebel Ali, though the latter is bigger.

Do you have plans to develop the port’s free zone?

We have many plans in all fields, but what we can announce now is that we have plans to expand the first shipyard that we have acquired and to add extra length to its dock. There are also plans to set up supplementary industries.

Does DP World’s huge expansion worry rival companies or even other countries?

DP World is not Dubai Ports of five years ago. Today we are the fourth largest port operator in the world and people no longer see us as a company from Dubai. We are a world company with no geographical limits and are working everywhere. They no longer look at the company owners but what it does and what it is capable of. I believe we have been largely successful in achieving this.

But the Americans still look at you in terms of your geographic position. We are businessmen and not politicians. We focus on what we are good at, which is business and ports. We prefer not to enter areas that keep us away from our focus. The Sokhna Port area has excellent tourism potential.

The area has good tourist elements – it has beautiful beaches and is close to Cairo. And we have Nakheel, tourism companies and hotels. In other visits we will send specialists to explore the area closely and recommend what action we should take.

Are you thinking of listing your share in the port on the Egyptian bourse?

Not at the moment.

What is the expected return on your investment in Sokhna Port?

The return will be satisfactory for all parties but I prefer not to disclose any figures at this stage.

Sultan Ahmed Bin Sulayem Chairman of DP World

Sultan Ahmed Bin Sulayem is one of Dubai’s captains of industry.

In addition to his position as Chairman of DP World he is Chairman of parent company Dubai World, Nakheel, Dubai Waterfront Company, the Ports, Customs and Free Zone Corporation, Tejari.com and Dubai Multi Commodities Centre (DMCC).

Dubai World’s interests include P&O, Free Zone World, Dubai Drydocks, Dubai Maritime City, Limitless and Istithmar.

He led DP World’s $6.8 billion acquisition of P&O in March 2006, developed Jebel Ali Free Zone, pioneered the DMCC and established Nakheel, Istithmar and Limitless.

He contributes to various educational, humanitarian and related initiatives and is a member of the World Economic Forum.