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2014 Media Kit
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Dubai Ports acquisition gains terminal leaders’ interest

By: | at 07:00 PM | Breakbulk & Projects  

By Paul Scott Abbott, AJOT

The acquisition of P&O Ports by a Dubai government entity will give the port terminal industry a boost by inspiring competition, according to some attendees of the TOC 2005 Americas terminal operations conference and exhibition.

As leaders of the port terminal industry gathered for the conference, news was breaking that Britain’s Peninsular & Oriental Steam Navigation Co. (P&O), which includes operations of 29 container terminals throughout the world, had accepted a $5.76 billion acquisition bid by DP Ports World, an entity created in September through the merger of the Dubai Ports Authority and Dubai Ports International Terminals. The acquisition, combined with the February 2005 takeover for $1.15 billion of CSX World Terminals and its nine terminals, will make the Dubai entity the world’s third-largest ports company.

“The market is growing and growing, and we’re not afraid of anything,” said Agustin J. Arroyo, executive coordinator of business development for Central and South America for Hutchison Port Holdings (HPH), which will remain the No. 1 global ports firm. Singapore government investment agency Temasek Holdings remains in the No. 2 spot.

“Competition is good because it makes you work harder,” continued Arroyo, who works out of the Veracruz, Mexico, office of Hong Kong-based HPH. “This is going to kick us and encourage us to do better things, definitely.”

Yvo Saanen, managing director of TBA Nederland, a Netherlands-based consultant with terminal operator clients throughout the world, commented, “It will put a lot of pressure on the other big terminal operators, because P&O Ports owns a lot of strategic locations, especially in Europe and Australia.”

Al McDougall, Kalmar Industries Corp.‘s ports division sales manager for the Americas, noting that P&O Ports is a major client of his materials handling equipment firm, said, “We hope that relationship will continue.”

McDougall said the logic behind the acquisition is simple: “Dubai has money and P&O has facilities.”

Mikko Vuojolainen, vice president of Kalmar’s ports division, called the deal, “a logical continuation of the consolidation of stevedoring companies that we have seen in the past.” Both Kalmar officials concurred in the opinion that the Dubai entity has clearly become the most aggressive player in the world ports marketplace.

Armed with oil money, the Dubai entity expanded beyond the United Arab Emirates into elsewhere in the Middle East plus Africa, Europe and India even before the CSX World Terminals acquisition gave it a strong presence in Asia. It also has operations in Australia, Germany, the Dominican Republic and Venezuela.

Wade Elliott, senior director of the marketing division of the Tampa Port Authority, commented, “P&O is a first-class operation, and it seems to be a very good fit with DP Ports.”

Bob Histon, general manager for North America for Gottwald Port Technology, noted that his firm has sold cranes to both P&O Ports and the Dubai entity and said, “I guess this makes for one less sales call, and I would assume it’s good for the industry.”

James R. Brennan, partner in the Norbridge transportation consulting firm, citing the $5.76 billion purchase price, said, “I wish I were a terminal operator who had attractive properties.”

After an additional moment of thought, Brennan added, “I guess the right comment would be, I wish I had that kind of money.”