DP World, the world's third biggest container terminal operator, yesterday announced a Dh3.12 billion ($850 million) investment to increase its capacity at the Jebel Ali port by 4 million twenty-foot-equivalent units (TEUs).
This will result in capacity at Jebel Ali reaching 19 million TEU by 2014, reinforcing its position as the biggest transshipment hub in the Middle East.
"DP World will be investing around $850 million over three years adapting 1,860 metres of quayside and 70 hectares of yard from an existing general cargo berth into a new container terminal within the existing container port. The investment will be financed with existing cash resources and cashflow," a statement said.
The new terminal, which will operate with the largest, most efficient quay cranes and have a draft of 17 metres, will be able to handle the world's largest container vessels planned for the future.
The move will also help DP World to handle the future demand of commodities trade, especially with the new airport in Jebel Ali picking up cargo throughput that will create the region's biggest sea-to-air cargo facility in Jebel Ali.
Mohammad Sharaf, Chief Executive DP World, said: "The UAE has seen remarkable growth this year and the terminal is currently operating at very high levels of utilisation reflecting its strong position as a hub for the fast growing regions of the Middle East, Indian subcontinent and Africa.
"With GDP forecasts reflecting a continuation of growth across the region and container shipping lines ordering larger vessels, this expansion will ensure our customers will have the additional capacity required and a continuation of the high levels of efficiency they have come to expect from DP World."
The GCC countries have 35 ports and some are currently undergoing expansion to meet the increasing demand. Volumes have witnessed robust growth: increasing by an estimated 8 per cent six-year CAGR to 25 million TEUs in 2010.
"There is some catch-up to do in terms of port development. Last year, the UAE accounted for 59 per cent of the GCC's throughput. There is a robust growth in investments on seaports to increase capacity. So far, the highest investments have come from Dubai and Abu Dhabi. The other GCC countries are also all set to improve their ports," said an analyst with Kuwait Finance Centre.
The Gulf countries have almost 38 per cent of the world's reserves of crude oil and approximately 22 per cent of global natural gas reserves. The large volume of hydrocarbon exports by sea has ensured the development of ports in all these countries.
Gulf countries are spending $15.3 billion in developing and expanding port infrastructure to handle future demand in trade. These projects are all due for completion from mid-2011 to mid-2016.
A recent report from global analysts EC Harris has ranked the GCC as the most attractive region in the world for investment in port developments.
Sultan Ahmad Bin Sul-ayem, Chairman, DP World said: "Further investing in Jebel Ali, building a new container terminal as well as expanding the existing terminal, as we announced recently, will support the continued growth of Dubai and the UAE and enhance the country's status as the trade centre of the Middle East. We remain steadfastly committed to continuing to meet the needs of the region's markets."
In October DP World announced record container volumes in the UAE this year, with growth of 11 per cent so far this year and over a million TEU per month being handled in the port.
"The development of this new capacity at Jebel Ali will ensure we continue to meet the growth in demand from our customers who look to DP World to provide a first class service right across the portfolio."
DP World operates more than 60 terminals on six continents, with container handling generating around 80 per cent of its revenue.
In addition, the company currently has 10 new developments and major expansions underway in 10 countries.
Mohammad Al Mu'allem, Senior Vice President and Managing Director, DP World, UAE region said: "We have listened to our customers, who have told us that Jebel Ali continues to be both a gateway for cargo and a vital hub for facilitating trade growth throughout the region... we are also creating around 1000 jobs directly at the new terminal."