UAE port operator Gulftainer plans to invest as much as $3 billion (Dh11bn) over the next five years with financing from investors and banks as it seeks to double its container capacity and acquire assets, its chief executive said.
The operator wants to reach 10 million twenty-foot equivalent units - a measurement of a ship's container-carrying capacity - in five years, increase its cargo shipment handling and engage investors to help fund its $2 to $3bn expansion, Peter Richards told The National.
“We should not to be restricted to TEUs and containers because a lot of the entities that we're looking at now are not just containers but a lot of them are break bulk and general cargoes,” said Mr Richards. “We hope to continue our growth in the US market and at the same time we are looking at east and west Africa, and we are looking at Asia.”
Gulftainer’s main operations are located in the Middle East, where countries are looking to expand their maritime transport capacity to cater to increased trade and higher economic growth.
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Read more:
Gulftainer signs 50-year concession agreement for the US Port of Wilmington
Sharjah container volumes grew beyond 400,000 units last year
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Ports in the Middle East have announced plans to add capacity totalling about 57 million TEU by 2030, almost doubling the current level, according to the Boston Consulting Group. From 2011 to 2016, the compound annual growth rate of container throughput stood at 4 per cent, which exceeded the global average, the consultancy said in a report this month.
Gulftainer is expanding globally, and in September, signed a 50-year $600 million concession agreement to operate and expand the Port of Wilmington in state of Delaware in the United States. Around $400m will be invested in the development of a 1.2 million TEU facility at the Edge Moor complex previously operated by chemicals company DuPont and acquired by the Diamond State Port Corporation in 2016. The agreement is Gulftainer’s second US venture following its earlier $100m investment in Florida’s Port Canaveral in 2015.
The port operator, which is part of Sharjah's Crescent Enterprises, owned by the Jafar family, currently manages nine terminals in the US, Brazil and the Middle East.
Gulftainer is looking at signing concession agreements and snapping up assets in order to reach its growth target.
“We are looking at two to three entities to buy an existing business here in the Middle East and the US,” said Mr Richards, declining to give more details. “I am hoping the USA one will be concluded in 2019, the Middle east one maybe in 2020.”
The company is also hoping to enter Africa next year, “a continent that has so much of raw materials that the world needs at this time and the only way to get those out of Africa is to build good gateways.”
To finance its projects, the company would like to tap bank finance and engage with investors, including sovereign wealth funds, private equity players and other entities. But Gulftainer does not intend to sell a stake in the company or seek an initial public offering.
“We would look at a case by case basis and the actual project that we are involved in we would allow investors to participate in that project,” said Mr Richards.
“Infrastructure investments are very attractive. People are looking for a safe haven for their money."
The National's picks
4.35pm: Tilal Al Khalediah
5.10pm: Continous
5.45pm: Raging Torrent
6.20pm: West Acre
7pm: Flood Zone
7.40pm: Straight No Chaser
8.15pm: Romantic Warrior
8.50pm: Calandogan
9.30pm: Forever Young
How to apply for a drone permit
- Individuals must register on UAE Drone app or website using their UAE Pass
- Add all their personal details, including name, nationality, passport number, Emiratis ID, email and phone number
- Upload the training certificate from a centre accredited by the GCAA
- Submit their request
What are the regulations?
- Fly it within visual line of sight
- Never over populated areas
- Ensure maximum flying height of 400 feet (122 metres) above ground level is not crossed
- Users must avoid flying over restricted areas listed on the UAE Drone app
- Only fly the drone during the day, and never at night
- Should have a live feed of the drone flight
- Drones must weigh 5 kg or less
Real estate tokenisation project
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
Meatless Days
Sara Suleri, with an introduction by Kamila Shamsie
Penguin
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
A MINECRAFT MOVIE
Director: Jared Hess
Starring: Jack Black, Jennifer Coolidge, Jason Momoa
Rating: 3/5
The Freedom Artist
By Ben Okri (Head of Zeus)
BUNDESLIGA FIXTURES
Friday (UAE kick-off times)
Borussia Dortmund v Paderborn (11.30pm)
Saturday
Bayer Leverkusen v SC Freiburg (6.30pm)
Werder Bremen v Schalke (6.30pm)
Union Berlin v Borussia Monchengladbach (6.30pm)
Eintracht Frankfurt v Wolfsburg (6.30pm)
Fortuna Dusseldof v Bayern Munich (6.30pm)
RB Leipzig v Cologne (9.30pm)
Sunday
Augsburg v Hertha Berlin (6.30pm)
Hoffenheim v Mainz (9pm)
Arabian Gulf Cup FINAL
Al Nasr 2
(Negredo 1, Tozo 50)
Shabab Al Ahli 1
(Jaber 13)
The specs
Engine: 3.0-litre six-cylinder turbo
Power: 398hp from 5,250rpm
Torque: 580Nm at 1,900-4,800rpm
Transmission: Eight-speed auto
Fuel economy, combined: 6.5L/100km
On sale: December
Price: From Dh330,000 (estimate)
