DPW to spend $3b on global expansion drive

DUBAI — DP World, on target to achieve 40 per cent growth in four years, will spend up to $3 billion to boost container traffic at the 52 port terminals it currently operates around the globe.

By Isaac John (Chief Business Reporter)

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Published: Mon 3 Jul 2006, 11:23 AM

Last updated: Sat 4 Apr 2015, 2:56 PM

Sultan Ahmed bin Sulayem, Chairman of the world's third largest port operator, said the new investments would be used to expand cargo handling facilities and new equipment at the existing ports spread across 30 countries —currently boasting a combined annual throughput of more than 50 million TEUs.

Announcing the formal launch of Dubai World — the holding group comprising a collection of companies, including P&F World, the parent company of DP World — Sulayem said yesterday the diversified entity, which has seen the "size and spread of business" growing over the past couple of years, is geared to tap further huge potential for growth.

"We are happy with the rate of growth we achieved. We have grown as one of the largest companies in the world. Our target is 40 per cent growth in four years," he said.

"Dubai World never stops working. Around the globe and around the clock, we are committed to achieving tremendous success. Our holding company is a pioneering collection of international companies who together will proudly advance Dubai and the world. We know this is just the beginning of what we can accomplish and are excited and optimistic about the future and how Dubai World can help transform it," he said.

Sulayem said DP World and its adviser Deutsche Bank were evaluating various offers for the six US terminals it acquired as part of the $6.8 billion take-over of Peninsular & Oriental Steam Navigation Company in February. "We cannot give out more details on this," he said.

On the source of financing for the expansion, Sulayem said they were weighing all options, including bonds, bank loans, taking new partners and a possible initial public offering. Ruling out any problems with financing requirements, he said the multi-billion group would go ahead with more bond issues as planned. In January, DP World sold $3.5 billion worth of sukuks. Maturing in January 2008, the Islamic bonds are convertible into shares and are listed on the DIFX.

Sulayem said DP World would consider further acquisitions although it is not actively pursuing any deals.

About the management take-over of Gwador Port in Pakistan, he said DP World is among the short-listed bidders, but denied reports of a possible trade-off deal with Pakistan government.

DP World ports handled 17 million standard 20-foot containers of cargo in 2005, 19 per cent more than in 2004. Combined with P&O's throughput, that would equate to about 37 million containers. According to London-based consultancy firm Drewry Shipping, the global container ports industry will need as much as $20 billion of investment in the next five years.

Dubai World, a diverse holding company focusing on development, hospitality, investment, commodities, marine services and ports and free zones — is one of the world's largest holding companies. It comprises DP World, P&O, Jafza, Dubai Drydocks, Maritime City, Dubai Multi Commodities Centre, Kerzner, One & Only, Atlantis, Island Global Yachting, Limitless, Nakheel, Istithmar, Inchcape Shipping Services, Tejari, Technopark and Tamweel.

Dubai World's Board members include: Jamal Majid bin Thaniah, Ahmed Butti Ahmed, Saeed Ahmed Saeed, Chris O'Donnell, Saad Abdul Razak, Geoff Taylor, Maryam Sharaf, Suleiman Al Mazrouei, Khulood Al Rostamani, David Rutledge, David Jackson, Alan Rogers and Omar Hijazi.

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