Emirates Business 247: Interview with Peter Richards – General Manager of Gulftainer.
Shipowners can save Dh24m a year by using Khorfakkan
|Gulftainer director-general outlines the advantages that KCT, located on the East Coast, offers such as saving in vital voyage hours and fuel costs, latest port facilities,1,460 meters of berths dredged to a depth of 17 meters and 14 ship-to-store cranes.|
|Gulftainer has expanded its operations from running ports in Sharjah to exploring opportunities overseas. Last year Khorfakkan Container Terminal (KCT), which the company runs, was named the fastest port in the world. The company is equipped with the latest technologies for discharging and loading ships and aims to become one of the leading port operators in the world, says Peter Richards, its director-general and general manager. In an exclusive interview Richards tells Emirates Business about the company’s achievements and reveals its future plans.What is your company’s business sector?
Gulftainer manages Port Khalid and Port Khorfakkan on behalf of Sharjah Port Authority. This includes discharging, loading, storage and distribution operations. The ports offer shipowners, shippers and consignees a convenient gateway not only to the UAE but also the upper Arabian Gulf countries. And we offer consultancy services to overseas ports.
Does the company provide repair services?
Yes, we offer a 24-hour, seven-days-a-week repair service for steel, aluminum and open-top containers, flat racks and reefers combining competitive rates with rapid turnaround. There are two fully equipped depots – Khorfakkan with 35,000 paved square meters within the port area and Sharjah with 25,000 paved sqm with in Port Khalid. Other services include refurbishment, steam cleaning, washing and pre-trip inspections of reefers. We also operate Sharjah Inland Container Depot [SICD], which was opened in 2004 at Al Sajaa. It is strategically situated on the edge of Sharjah city next to Dubai border and close to the Emirates Road with easy access to Sharjah industrial areas and direct links to the East Coast. All Sharjah and Northern Emirates containers from KCT are received at and distributed from SICD. We are planning a 700,000 sqm expansion to serve Logistics City, which will distribute goods throughout the Gulf Co-operation Council.
Does Gulftainer have a transport division?
Yes, in fact we have two haulage divisions, Trucktainer and Speedtrux, which have provided cost-effective and safe transport and distribution in the UAE for nearly 30 years. The company owns 110 tractors, 120 trucks and 200 trailers. We are planning to acquire another 15 trucks and buy special ones with a capacity of more than 150 tonnes as the company is planning to expand further in the Middle East market.
What would you say are the factors that make the company stand out?
We provide integrated port-related logistics for customers who are looking for fast and cost effective services. The company operates Sharjah Container Terminal [SCT], the first specialised container terminal in the Middle East, and KCT, the East Coast’s fastest growing container port. These modern and efficient deepwater terminals are connected by Gulftainer’s own mini-bridge - a bonded. line-haul shuttle service provided by the company’s trucking divisions. We give port users an edge. Ships calling at the Khorfakkan terminal avoid passing through the sensitive Strait of Hormuz and save vital voyage hours and fuel costs. If customers opt for SCT on the emirate’s Gulf Coast, they gain access to the heart of the country’s commercial and industrial centre.
|How much would a ship owner save by using Khorfakkan terminal?An owner of a 250-tonne ship would save $6.5 million [Dh24m] per year if he uses Khorfakkan considering that a ship takes 12 hours to enter the Arabian Gulf and reach the SCT. The cost of the fuel burned in the extra 12 hours journey is $126,000 and usually a ship makes one trip a week. This is taking into account the increase in fuel prices – in 2005 fuel cost $250 per tonne and now $505 per tonne.
What was the company’s level of growth last year?
Compared to 2006 the company achieved a 10 percent rate growth.
What facilities are there at Port Khalid?
SCT is located at the centre of the UAE’s rapidly growing industrial and commercial sector – more than 45 per cent of the UAE’s manufacturing is carried out in Sharjah. Most of the manufacturing units are less than an hour by truck from SCT. The terminal’s 568-meter quay has a minimum depth of 11.5 meters alongside at mean low water [MLW] and can accommodate two third generation container ships simultaneously. It covers an area of more than 150,000 sqm and provides storage for 8,000 TEU containers. There is also a 9,000 sqm container freight station facility and storage area plus a 100-tonne capacity weigh-bridge and 150 reef points.
What are the development plans for SCT?
We are investing Dh250m to expand 150,000 sqm in phases to handle cargo, allow more containers and establish 43 warehouses with an area of 30,000 sqm. We are increasing the draft to 12.5 meters and two further post-Panamax gantry cranes.
What facilities are available at Port Khorfakkan?
KCT has undergone a continuous rolling programme of improvements in recent years. Multi-million-dollar developments have reinforced its position as the most convenient container trans-shipment port for the UAE, upper Arabian Gulf countries, the Indian Subcontinent and East Africa. The terminal has 1,460 meters of berths dredged to a depth of 17 meters alongside at MLW. Gulftainer has introduced hand-held radio data transmitters and sophisticated port management system at its container terminals. KCT boasts 14 ship-to-store gantry cranes plus four Panamax, two post-Panamax and eight super-post-Panamax cranes.
What are your expansion plans for KCT?
WE are constructing a new berth and the first phase of this project has been completed. Phase two expansion is under way to add a further 400 meters of quay plus six super-post- Panamax gantries and additional storage and stacking areas. Work is due to be completed at the end of this year.
Does the company have investments aboard?
We have overseas investments worth Dh600m. We signed a 15-year agreement with government of the Comoros in September 2006 to manage, operate and upgrade the country’s two ports – Moroni and Mutsamudu. The contract represents a further step in our efforts to develop our international links and raise our profile as a port management company.
|It also allows Gulftainer to use its expertise to help develop the transport gateways of a country that will benefit from cost savings through efficient cargo handling at its ports.We are also involved in Kuwait’s Shwaikh Port - 80 percent of the country’s cargo volume is handled there. And we have a joint venture in Pakistan.
Do you have overseas expansion plan?
We are negotiating to acquire a 50 per cent stake in a port logistics company in Istanbul, Turkey. The company has 75 trucks and this will increase to 150 as a result of our investment. We plan to have 200 Trucks in 2009 and 400 in 2010.This joint venture will enable us to investigate a port acquisition in Turkey. During the next two years we will continue growing through joint ventures and acquisitions. We are negotiating to acquire companies or stakes in India, Vietnam and Iraq.
What is the thinking behind your expansion plans?
Acquisition has become a common trend among companies in the international market. Many companies opt for mergers and acquisitions to maintain a high level of performance in competitive markets. Acquisitions have a positive impact on economies and allow a company to grow more quickly and efficiently. It takes years to enlarge a company through growth alone – acquisitions speed up the process.
Freight movement services [FMS] between KTC and the Far East are growing. What is the volume of this business?
The new FMS service between the Far East and KTC began operations at the end of 2007 and is already expanding with the introduction of additional ships. Shipping lines are continuing to expand their services to cater to this growth and ensure their customers receive the comprehensive and regular coverage that they have come to expect. The Korean lines involved in the service have contributed a total of five ships for a weekly service. The port handed 13,000 containers from the Far East in January.
What challenges did your company face last year?
The increasing cost of living has prompted many employees to return home, which has resulted in a labour shortage. The government should reconsider policies to decrease inflation. If inflation continues going up the UAE will face a real problem. To avoid the direct effects of increasing costs and inflation our company has opted to explore overseas markets.