Ramesh Shivakumaran: More Valuable Principles on Port Management

We continue with our review of the essential principles involved in managing ports and trade transport with a discussion of some vital considerations investors, consultants and managers must seriously face:

1. Understanding the different types of ports and access to ports (natural, man-made, river, estuary) and the diversity of specialist port operations

The type and purpose of the port facilities will determine one’s level of financial exposure and managerial approach. Ports dedicated to dry bulk will have a different configuration to those designed for liquid cargoes. Some countries might prevent the use of certain natural waterways for transporting such products as crude oil or natural gas. Hence, if inland sources of such products are only available by land, it will mean providing for port facilities that will cater only to land transportation. Conversely, using only barges to ferry products will entail another set of support facilities.

2. Understanding the highlighted role of ports in a through-transport context – hub ports, feeder/transhipment ports, intermodal interfaces

Specialist port facilities consist of facilities that support the overall port system through auxiliary services, for instance, hub ports that serve as intermediary access-points to other major facilities or provide linkages for other parts of the entire system. These intermodal ports allow movement of products and goods through various modes of transport (land-to- water interface, water-to-land interface or air-to-land interface, etc.) until the final delivery or transfer of goods to their port of destination is accomplished. Movement of materials or goods must follow strategic routes that comply with financial, technical and time constraints to achieve efficient and profitable results.

3. Being aware of the role of national and regional local government institutions in port design, management and operations

Recognizing the primary role of national and regional government agencies play in the construction and operations of part facilities will give a company the advantage of acquiring a thorough understanding of one’s corresponding role and duties. Various taxes and fees are required throughout the process of acquiring a license to operate, using and developing of real estate, practicing one’s profession and obtaining environmental requirements, for example, will involve coordinating with officials who grant the necessary permits and approvals. The upkeep of infrastructure as well as its day-to-day operations will fall under the legal supervision of these agencies tasked to ensure safety, legality, tax compliance and other technical and administrative standards provided for by law.

4. Understanding the different forms of the ownership structure of ports and of port services; that is, public or private, landlord only, full or part-service provider, including terminal facilities within ports

Various conditions will determine and even complicate the form of ownership of port facilities and the kind of services that will be provided. Leasing the land upon which the port is located will be the best option compared to owning it. Some country will not allow full ownership and will require a local partner to own majority of the land as well as the improvements (usually 60%). How the arrangement will end up will determine the total investment required for the port terminal as well as how it will be operated. For those who have local partners already engaged in some aspects of the operations, one might provide auxiliary or support services that will reduce one’s level of investment.

5. Appreciating the use of Free Port/Free Trade Zones as an economics tool

Countries have gained the benefits of opening up Free Ports and Free Trade Zones to allow foreign investors to establish operations in regions where labor and raw materials are cheap and readily available. This has allowed port operators to take advantage of such ports and zones while enjoying the tax relief afforded them as well as their manufacturing partners. Commonly, these zones, however, have a short or limited life expectancy as many companies that use up their tax-holiday contract period move to other regions or eventually pay required customs, thus, losing their advantage over their competitors. A long-term view of entering into such an arrangement is needed to assure that port facilities will have a long duration of operation and continuing profitability.

Ever since Gulftainer Company Limited started its port facilities in Sharjah, UAE, in 1976, with Ramesh Shivakumaran, Group Director Business Services – it has grown into a well-oiled and strong company that can deliver services according to the specifications of its clients. With 8 terminals now in Saudi Arabia, it prides itself of its accomplishments which it has achieved through applying these and other primary principles in port management.

GULFTAINER COMPANY LIMITED HEAD OFFICE HAS GONE INTO PARTNERSHIP WITH THE SHARJAH BASED BEE’AH

Gulftainer’s recent efforts to increase its recycling efficiency have been rewarded as senior management welcomed a delegation from Bee’ah, who presented a certificate to recognize the Company’s ongoing commitment to improving the environment.

Bee’ah is the Middle East’s largest and award winning waste management company, also based in Sharjah, and their team, Saif Abdulla Al Sharif, Director of the Recycle Business & Collection, Muhammad Musa and Hasim Kathiri, met with Gulftainer’s Managing Director, Peter Richards, Director of Business Services, Ramesh Shivakumaran and Group QHSE Manager, Magimairaj Bose, to present the award and discuss further initiatives.

Some of the initiatives now in place within the Gulftainer workplace include: recycling paper, plastic, e-wastes in the offices and oils, batteries and tyres in the engineering departments to name just a few. The company no longer disposes of any of its wastes into landfill.

Peter Richards, Gulftainer managing director said: “We are delighted to accept this certificate from Bee’ah and to be able to play our part in making the Emirate of Sharjah a greener environment. As a company we believe it is our responsibility to lead by example and to increase awareness of the impact of using the 3 R’s (reduce, re-use, recycle) in the work place and beyond.  We hope that these initiatives will highlight just how easy it is to make a difference.”

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Gulftainer Company Limited Launches Operations At Port Canaveral, Florida

Gulftainer’s new Canaveral Cargo Terminal at Port Canaveral in Florida, USA, officially opened for business with a major launch ceremony attended by more than 300 local, state, and national public officials, alongside leaders of business and trade across the Florida region.

The new cargo terminal opening comes one year after Canaveral Port Authority signed a 35-year agreement with GT USA, the US arm of UAE-based global ports and logistics company Gulftainer, to operate and further develop the container and multipurpose cargo terminal. GT USA, which has established its headquarters at the Canaveral Port Authority offices, expects to contribute more than US$630 million to the local economy, creating 2,000 direct and indirect jobs when fully developed.

The ceremony was attended by HE Yousef Al Otaiba, Ambassador of the United Arab Emirates to the United States of America; HE Lana Nusseibeh, Permanent Representative of the United Arab Emirates to the United Nations; Ambassador Vinai Thummalapally‎, Executive Director of the International Trade Administration of the U.S. Department of Commerce; and Richard Biter, Secretary of the Florida Department of Transportation.

Canaveral Port Authority Commission Chairman Jerry Allender, opened the ceremony by saying, “the United Arab Emirates and the United States have fostered great partnerships in trade, culture, and education. Today represents one example of our nations’ great partnership.”

In his opening remarks, HE Yousef Al Otaiba highlighted the growing trade between the UAE and the US, commenting: “Bilateral trade between the UAE and US has grown almost 80 percent since 2005. In fact, last year the US benefitted from a US$19 billion trade surplus with the UAE, and was the largest market for US goods and services in the region.”

Al Otaiba added: “Now we’re here to celebrate another milestone in the UAE’s expanding trade and commercial relationship with Florida. And I am proud to count the Gulftainer and Port Canaveral venture among the finest examples of the UAE-US relationship.”

GT USA is part of Gulftainer’s strategic vision to triple its global cargo capacity in the next ten years across five continents. The Company is a subsidiary of UAE-headquartered multinational Crescent Enterprises, which is also active in a number of other industry sectors.

Badr Jafar, CEO of Crescent Enterprises and Chairman of Gulftainer’s Executive Board, added: “Container shipping is a US$6 trillion industry that touches 95 percent of the world’s manufactured goods, and we are determined to bring much more of that business to Port Canaveral in the months and years to come. What our experience has shown us, time and time again, is that a well-run port can be a huge catalyst for economic growth and development, and we look forward to working with the Canaveral Port Authority and the local community to ensure that this facility becomes an indispensable part of global supply chains.”

The unveiling of new terminal and first container movements included the maiden call of the ‘CMA CGM Jamaica’, a 264-metre container vessel with a capacity of 4,298 TEUs (twenty-foot equivalent units) that berthed at the port, as the deepest vessel to ever call at Canaveral in its 60 year history, before resuming her voyage across the Atlantic and to Europe. A long-time business partner of Gulftainer, CMA CGM is one of the world’s leading shipping companies and is associated with Gulftainer at several locations around the world. Earlier this month, Gulftainer welcomed CMA CGM’s largest container vessel at its Khorfakkan Container Terminal in Sharjah, the ‘CMA CGM Kerguelen,’ with a total capacity of 17,722 TEUs.

Peter Richards, GT USA Chief Executive Officer and Managing Director of Gulftainer Group, said: “This new state-of-the-art facility is ready to get to work with two berths, two cranes and 20 acres of land already developed. In Gulftainer’s partnership with the Canaveral Port Authority, it is our policy to partner with the entire community and we hope to make this a world-class container terminal servicing the Florida region, the nation and beyond.”

The Canaveral Cargo Terminal, which begins operations with a TEU cargo capacity of 200,000 TEUs, has ambitious plans to triple capacity to 750,000 TEUs. An ideal gateway for container shipping to the central Florida market and beyond, the new terminal provides an excellent connection to central Florida’s bustling consumption centres and growing number of distribution centres. The terminal is able to turn around cargo imported into Port Canaveral to the Orlando area within one hours, the fastest transit time when compared to other container terminals in the State.

Peter Richards Gulftainer Company Limited Keeps On Breaking Records

OPERATOR’S EFFICIENT SERVICE DRIVES CONTINUED GROWTH.

Gulftainer Company Limited (GTL), the largest privately owned ports operator in the world, based in Sharjah, have announced that throughput at their Sharjah terminals – Khorfakkan Container Terminal (KCT) and Sharjah Container Terminal (SCT) – has increased by over 23% from January 2012 to July 2012 compared with the corresponding period last year and are estimated to exceed 3.5 million TEUS in 2012.

This remarkable performance, forecast to continue throughout the rest of the year, means that Gulftainer will continue to break its own records despite the global economy going through yet another difficult year. The accomplishment, according to published industry figures, means that Gulftainer’s Middle East ports have been the fastest growing ports in the region over the last 4 years. While many regional players posted results of below 10%, Gulftainer has continued to show double-digit growth.

Gulftainer Group Managing Director, Peter Richards, commented, “Gulftainer continues to work closely with our customers in order to continue this good work. We are absolutely delighted to have achieved such successful results for the year to date. The volume increases in KCT and SCT are an obvious reflection of the trust that customers place in us.”

“These records set by Gulftainer demonstrate the increased volume of trade in the area and we remain very optimistic about prospects for the whole region in the coming years. As we continue through 2012, with the help and support of the Sharjah Ports Authority, we can look forward to a prosperous year ahead as we improve our facilities and increase equipment levels to deliver consistent operational performance to all our stakeholders,” he added

Gulftainer management put this sustained consistency down to the ability to be flexible and swift to act. “Gulftainer goes the extra mile to ensure that we are in contact with all customers on a regular basis, we listen to what they have to say and act on what we hear. This means that we pick up market information and detail early and because we are agile in our decision making, we can react quickly in order to satisfy the demands of our customers and the market,” Richards commented.

An increase in export volume from the Middle East countries has also resulted in additional full volumes through Gulftainer’s facilities, requiring terminal layouts to be reviewed and revised. The co-operation of shipping lines together on services has resulted in the need for increased dialogue and co-ordination between the terminal operators and the Lines.

Gulftainer Group has been operating in the UAE and around the world for over 35 years. In the UAE it operates three main UAE ports: two on behalf of the Sharjah Port Authority – Sharjah Container Terminal (SCT) and Khorfakkan Container Terminal (KCT); and one in Ruwais, Abu Dhabi, on behalf of the international plastics solutions company, Borouge.

Gulftainer has been able to maintain a strong position in the UAE through its ports at Sharjah and Khorfakkan, and KCT was named ‘Shipping Port of the Year’ at the Annual Supply Chain and Transport Awards (SCATA 2011) in Dubai. In recent years Gulftainer has also invested in Iraq, Russia and now Brazil, with the company recently welcoming the first vessel into its Recife Port facility.

Peter Richards Gulftainer Company Limited Sees 24% Increase In 2012 Trade Volumes

Gulftainer, one of the world’s largest privately owned port management and logistics companies has recorded a 24 per cent overall increase on trade volumes in 2012 when compared with 2011.

Its Sharjah ports saw the greatest volumes throughout the year, with Khorfakkan Container Terminal seeing growth of 28 per cent on its 2011 figures with a staggering throughput of over 3.3m TEU. The consistent organic growth of Gulftainer is the largest of any Middle East port operator, with trade volumes more than tripling in the past decade.

The company’s portfolio covers three UAE operations, Khorfakkan, Sharjah and Ruwais, as well as in Iraq at Umm Qasr, Recife in Brazil, and the recently acquired Tripoli Port in Lebanon, with further plans across the Middle East and international territories for 2013.

“The past year has seen growth across a number of our operations, as well as expansion of current and new locations,” says Peter Richards, group managing director, Gulftainer. “Khorfakkan Container Terminal accounted for a majority share of trade volume and continues to see phenomenal throughput with 28 per cent growth in 2012 in its own right.”

For 2013, Gulftainer has already moved forward with further expansion plans within existing operations to allow for greater capacity and the increasing size of vessels now requiring access to the ports.

“Our figures are indicative of the UAE’s growing influence as an import and export hub, and even more so of the east coast’s popularity for containership operators,” continues Richards. “This is an exciting time for the company, as we increase our footprint both locally and globally, and we anticipate similar double digit growth again in 2013.”

Peter Richards Gulftainer Company Limited Hosts Inaugural Port Finance International

Sharjah-based international ports management company Gulftainer played host –and sponsor– to the inaugural Port Finance International Middle East Conference, which was held from 6 to 7 December 2011 at the headquarters of the Sharjah Chamber of Commerce and Industry (SCCI).

The opening keynote speech for the conference was delivered by HE Abdullah Al Saleh, Undersecretary of the Ministry of Foreign Trade for the UAE, and a variety of presentations were delivered on the finance, investment, and port and logistics environments in the region and beyond, including one by Gulftainer Group Commercial Manager, Keith Nuttall.

Building on the success of PFI events around the world (recently held in London, Istanbul, Singapore, Mumbai, and Copenhagen) the inaugural Port Finance International Middle East Conference highlighted current trends and challenges in financing port infrastructure development, and investigated, analysed and provided guidance on the latest developments, investments and future plans in the strategically positioned Middle East region.

Over two days this conference brought together key industry experts from the Port and Terminal industry and from the Banking and Legal world to provide delegates with an in-depth understanding of innovative financing solutions and practical advice. It also provided an excellent opportunity to meet potential equity and business partners, as well as senior executives from port authorities, port and terminal operators and the legal and banking industries to discuss finance options and development requirements.

Speaking of the importance of the event, Gulftainer Group Managing Director, Peter Richards, said, “The ports, terminals and shipping industries are undergoing major changes as they seek to move forward in a straitened financial climate and with revenues under pressure and costs rising. This event presented highly qualified speakers showcasing the latest shipping, port and investment developments, at a time when the world’s economies are facing unparalleled challenges. As the inaugural Port Finance International Middle East Conference, the event was a resounding success, and the participants look forward eagerly to the next event in the region”.

Helping participants in the conference to get a clearer picture of rapidly changing events were, amongst others, Gulftainer, the National Bank of Abu Dhabi, Merrill Lynch, IFC, RSGT, Port of Salalah, Qatar Ports, Clarksons, and Abu Dhabi Terminals.

Gulftainer Group has 35 years experience operating in the UAE and around the world. In addition to operating three UAE ports: two on behalf of the Sharjah Port Authority – Sharjah Container Terminal (SCT) and Khorfakkan Container Terminal (KCT); and one in Ruwais, Abu Dhabi, on behalf of the international plastics company, Borouge, Gulftainer also operates and manages a number of projects and investments in several countries, including Iraq, Pakistan, Russia, Brazil, Africa and Turkey, with other ventures worldwide currently being evaluated. Gulftainer’s logistics subsidiary, Momentum Logistics, was established in 2008 to take over the Group’s transportation and logistics business and has offices throughout the Middle East.

Smooth Sailing – Peter Richards Gulftainer Company Limited

GULFTAINER EYES INT’L MARKETS TO SUSTAIN STRONG GROWTH IN YEARS TO COME

Gulftainer, the world’s largest privately-owned ports operator, is upbeat about the shipping industry and the company is confident of sustaining strong double-digit growth this year, its top official said.

The Sharjah-based firm has seen phenomenal growth throughout 2012, with many expansion plans brought forward, including the Sharjah Container Terminal, or SCT. It eyes regional and international markets in 2013 to sustain the business growth in years to come.

“International expansion remains a focus for Gulftainer in 2013, having confirmed contracts in Russia, Lebanon and Brazil recently. India, Africa, the eastern Mediterranean and America remain key focus areas in addition to our existing developments. This is a strategy we expect to continue with into 2013 and beyond,” Peter Richards, managing director of Gulftainer, told Khaleej Times in an interview.

Gulftainer, a subsidiary of Crescent Enterprises, is a rapidly-expanding, dynamic ports and logistics company now operating in various parts of the world. The Gulftainer Group operates and manages ports and logistics businesses in several countries, including the UAE, Iraq, Pakistan, Russia, Brazil and Turkey.

The privately-owned UAE enterprise, which was established in 1976, has been particularly active in the ports and logistics business in international markets. Recently, it announced a $300 million investment in Russia to develop the Ust-Luga port in Leningrad Oblast, 110 kilometres from St Petersburg.

The consistent organic growth of Gulftainer is the largest of any Middle East port operator, with trade volumes more than tripling in the past decade. — Supplied photo

“We also expanded our geographical footprint in 2012 by establishing a new venture, Gulftainer Brazil, at the Port of Recife in Brazil, which has already received the first general cargo and container vessels,” said Richards.

He said Gulftainer Brazil handled its first shipments during the year of both container vessels and general cargo and brought a new lease of life to the Port of Recife.

“We expect Recife to experience a record-breaking year in 2013 and Gulftainer will be keeping a watchful eye over an exciting South American coast line,” he said.

“Likewise, we expect the operations in Tripoli in Lebanon to experience a successful year; the initial response back from the shipping lines has been very positive indeed and many of the lines are eager to support us here as well,” he added.

STRONG GROWTH AHEAD

Richards said 2012 was a positive year and the company is confident to record strong growth in 2013. The consistent organic growth of Gulftainer is the largest of any Middle East port operator, with trade volumes more than tripling in the past decade.

“Both terminals — the Khorfakkan Container Terminal [KCT] and the SCT — performed exceptionally well in 2012 and have seen increase of 28 per cent in cargo volumes. Whilst Khorfakkan serves the region at large, Sharjah provides a very specialised and valuable service for businesses in Sharjah and neighbouring emirates.”

“Over the past few years, we have continuously grown at a stronger rate than the global market average. With new contracts recently confirmed, including at the Port of Tripoli, we would anticipate that company growth in 2013 will be strong and over 18-20 per cent for containerised traffic alone. We expect much stronger growth for non-containerised traffic especially in Brazil and Iraq,” he added.

In reply to a question, he said the SCT is now hosting berths of a depth of 12.5 metres and 180,000 square metres of storage, with additional storage facilities planned for 2013.

About Khorfakkan, he said a new container freight station has been created for additional container packing and unpacking services, with additional handling equipment to support these activities.

“At Khorfakkan, there has been a recent multi-million dollar investment in ship-to-shore cranes, reachstackers, tugmaster and trailer combinations. Terminal layouts have been reviewed and revised to ensure the best use of space and facilities,” he added.

In reply to a question, he said Hanjin-NYK FMX and CSAV Norasia’s Galex services were additional services secured in 2012, with all now calling at the KCT.

“We have long standing relationships many of the world’s major shipping lines, including but not limited to CMA-CGM, UASC, MSC, Hanjin, China Shipping and Maersk Line.”

He said the introduction of ultra-large container carriers that can be handled at the KCT was a key reason for Gulftainer’s success in 2012.

“In January 2013, our KCT team handled the CMA CGM Marco Polo, presently the world’s largest container ship at 16,020 TEUs, in record time.”

He said Sharjah continues to grow in terms of its position as a business hub for the UAE, particularly within the industrial sector. Sharjah houses 29 per cent of the UAE’s industrial industry companies, and contributes eight per cent of the UAE’s non-oil gross domestic production.

“Gulftainer has always been proud to have its roots in Sharjah and contribute to its growing economy.”

UAE SHIPPING STAYS BUOYANT

Richards said the UAE’s shipping industry has generally been buoyant, largely due to the country’s position as an international business hub and with a significant volume of cargo being transported through its ports.

“As with any economy that is highly reliant on the export of crude oil, the shipping industry is also at risk from any fluctuation in oil prices, however, the stability and infrastructure of the UAE has helped to increase and secure business.”

“Emerging markets were a key factor for growth in 2012, and we anticipate this will be the case in the coming year. Iraq continued to also be buoyant for us, with Umm Qasr’s Iraq Container Terminal beginning operations. This terminal, equipped with two ship-to-shore gantry cranes, is expected to become the most efficient dedicated container facility in the port,” he added.

In reply to a question about the outlook for shipping industry he said: “We feel that 2013 will be about targeting growth in the right place, particularly through current emerging markets, such as South America, where we recently launched operations at the Port of Recife in Brazil.”

“In the UAE, we are expecting to continue the positive growth we experienced in 2012 and together with the support of our customers, believe that another year of double-digit growth has already begun.”

“We are particularly keen to see our volumes grow in Sharjah port where we will develop our IT connectivity between customers and the port community and will continue to offer a range of value added services to our customer base,” he added.

“We also have some very significant plans for our presence in the GCC and expect very soon to be able to confirm an even greater coverage in the area.”

To a question about the outlook for freight-forwarding business this year, he said the GCC’s transport and logistics sector grew 10 per cent in 2012, making it a $35 billion industry.

About the performance of Momentum Logistics, he said it has seen consistent success since it launched in 2008, and a major milestone for 2013 will be the opening of the Umm Qasr Logistics Centre, a 750,000 square metres facility adjacent to the Umm Qasr Port.

“This will provide an essential link within the supply chain for major energy companies that are involved in the construction of Iraq’s oil and gas production facilities, as well as those involved in the mega projects implemented to restore the Iraqi infrastructure,” said Richards.

The Sharjah Inland Clearance Depot, the 180,000 square metres bonded facility operated by Momentum, saw 100 per cent occupancy of its warehousing complex, with increases in both dry and refrigerated containers throughputs.

“The container freight station continued to see growth from African trade, with companies looking to take advantage of the bonded facility in order to have export cargo delivered, consolidated and packed for future export. To keep up with demand into 2013, the station apron is being extended by some 10,000 square.