CAIRO: Marking its first official debut in Egypt, Dubai Port operator DP World inked a deal on Sunday to acquire a 90 percent stake in Sokhna Port Development Company for $670 million.
Initial construction work is set to begin this year.
“DP World will pour in investments that will reach LE 7 billion in two years, said Minister of Transport Mohamed Mansour after the signing ceremony. “DP World will contribute to marketing and [connecting] the Sokhna Port with international ports it operates, which total [42] terminals.
With revenues estimated at more than $30 billion, DP World empire ranges from the world s fourth-largest container-port operator (with 43 terminals and 13 new developments), to a special economic zones company, as well as real estate projects in Dubai such as The Palm Island and The World.
“DP World possesses marketing skills that allow it to pull international companies into the Sokhna Port, the minister pointed out. “Revenues of a port are measured by number of vessels that pass through it. An [internationally renowned] operator like DP World will increase passage of international vessels.that will in turn boost revenues of the Red Sea port.
Spanning across 28 countries, DP World’s flagship operation lies in Dubai’s Port Rashid and Jebel Ali. The port operator said last January that total throughput grew 18 percent in 2007 to more than 43.3 million containers, led by growth in its home market, the United Arab Emirates. It handled 11 million containers in the UAE alone, led by 25 percent growth at its Jebel Ali port. It managed 9.9 million TEUs. Containers handled at Asian and Indian terminals grew 17 percent.
DP World is currently eyeing further investment opportunities across the world, particularly in the Middle East and Africa region. In Egypt, the port operator finds the Sokhna Port ideally located to capture maritime trade connecting East and West trade routes.
“Sokhna Port lies on a strategic [strip] that can connect it with important international terminals.through DP World’s existing ports, said Sultan Ahmed Bin Sulayem, chairman of DP World Holding.
Located near the mouth of the Suez Canal, Sokhna Port is the closest port to Cairo with an estimated capacity of 1.2 million TEUs in 2009. The port currently hosts a number of projects, including a livestock project ($90 million) and sugar refinery project ($120 million).
“Egypt is the largest Arab market, and the UAE is the largest foreign investor in Egypt. We see considerable potential for other Dubai World companies to invest in Egypt, including those than can offer value added supply chain services, such as business parks associated with the port, as real estate, tourism development and others, he added.
DP World itself got mired in a political row in 2006 when it gained control of some US ports. It was later forced to sell the port assets.
Despite the wave of gloom sweeping financial markets about the health of the US economy, Bin Sulayem told Reuters last month that he still saw many opportunities.
We are investing in the United States and we are very selective investors. I believe that the economy in the US is healthy, the agency quoted him. I don t think this is a recession. I believe there may be a mini recession in certain areas.
Bin Sulayem added that the credit crisis was unlikely to lead to serious slowdown in corporate activities. Financial markets are taking a big hit but it s more of a psychological effect because many companies are doing well, he said. Some made bad decisions. People were overextending themselves. They have made some miscalculations.
The Holding company launched mid-January a tender to buy up to $400 million worth of shares in Kirk Kerkorian s Las Vegas casino group MGM Mirage.
