DP World, an Emirati multinational logistics company, plans to expand its logistic services outside the port areas during the next year, through DB World Egypt, which was established to provide logistics services outside the port areas.
Daily New Egypt interviewed Gerard van den Heuvel, CEO of DP World Sokhna and General Manager of DP World Egypt, to learn about the company’s current status and future plans. He said that the actual operation of DP World Sokhna’s second basin started on 1 November 2021, which added a further capacity of 750,000 twenty foot equivalent units (TEUs) annually. DP World Sokhna now has a total capacity of approximately 1.75 million TEUs annually. The second basin was one of the largest expansion projects in the Sokhna Port, which started in 2018.
What is the company’s expansion plan for 2022?
In 2018, we started our expansion plan, which is to implement the second basin. It was completed in October, and we obtained operating licences from the Suez Canal Economic Zone, the Ministry of Transport, and the Ministry of Finance. The new basin started operation on 1 November.
The second basin increased the capacity of the Sokhna Port to 1.75 million TEUs annually. We aim to add new equipment inside the new basin during 2022. The investment cost of the second basin was estimated at about $520m.
We have an expansion plan for the next year, and it will focus more on logistics services. We now have a company specialised in logistics services, DB World Egypt, which will add new services to the port during the coming period, beside other services outside the port area. Through this company, we aim to be a commercial provider and engage in trade flows inside Egypt, so we launched the comprehensive port project.
Do you have a plan to bring new equipment and technologies?
By the end of this year, we will have 42 new trucks. Given that the company is also dealing with giant shipments of raw materials and iron, there is a plan to increase cranes and storage facilities.
We also completed the construction of a new coalyard with a capacity of 1.5-2 million tonnes of coal annually.
More attention is now focused on the shift to digitization implemented by DP World inside the Sokhna Port by providing information technology solutions, especially in tracking shipments, billing shipments, notifying customers when available, and tracking them from the ship throughout its transfer to final destination outside the port.
In the future, we will be able to track shipments in logistics and warehousing areas.
We will also invest in automated gates and recognition systems, so that we can automatically identify containers without having to endanger people. This will be safer for employees and the process will contribute to faster trade via our systems.
How long will it take to digitise all port systems?
This is a very good question. It does not depend on the system or its implementation but on the users and how willing they are to interact with us. Generally, an experienced customer takes a week to learn how to use it and see the benefits, while others may take 2-3 months. To be a bit conservative, introducing a new regimen takes at least 6 months. While what we’re doing now with the implementation of automated gates and certain systems, I think by next May or June, it will be finished.
Did the new Advanced Cargo Information (ACI) system affect DP World Sokhna?
Yes, it had a very positive effect. This is not new in our industry, as it is a normal way to work around the world. It allows ports to have all the information about incoming shipments before the ship arrives, so that we can pre-plan the handling of the goods. It is also good for shipping lines.
I think that in 4 or 6 weeks everyone will have to use and activate this system. In general, it is beneficial for everyone to use this system including the importer in Egypt as he can plan his shipment, it is a safer way to transfer and know the timing of your shipment.
What about your agreement with the Suez Canal Economic Zone to transport containers to West Port Said?
We support any decisions that the Suez Canal Economic Zone will take to support the West Port Said region and we are waiting for their guidance.
The Ministry of Finance agreed to establish additional cargo examination areas at ports to reduce congestion, how did you see the step?
We allocated a 640 square metres area for physical examinations of cargo at the second basin, in addition to the existing one.
Does DB World have a plan to invest in Egypt outside Sokhna?
We are always looking for opportunities to provide better solutions to develop the value chain of the supply chain in Egypt. As part of our master plan, we strive to achieve our vision of developing logistic complexes, industrial zones, and river ports in order to penetrate the market and provide comprehensive solutions to our clients.
Are you planning to invest in the dry ports of the 10th of Ramadan and the 6th of October?
At this stage, our work is focused on developing our products and services in Sokhna, where we have successfully operated the second basin. The next step is to develop logistics parks in the area along with the industrial area. The focus in the following years will be on development projects such as logistics complexes, terminals, etc.
How will DP World benefit from the CDC partnership?
Last October, DP World created an investment platform in partnership with the UK’s development finance institution and impact investor CDC Group. The platform will invest in origin and destination ports, inland container depots, economic zones, and other logistics across Africa to increase trade, create new job opportunities, and broaden access to essential goods. It will initially be seeded with minority stakes in existing DP World assets with significant capacity expansion plans, including Dakar (Senegal), Sokhna (Egypt) and Berbera (Somaliland).
There is a slight change in the shareholders, but it does not affect our financial structure, nor compromise our dealings with the Egyptian government or the management of the port. It mainly affects other ports of DP World because the platform will buy shares, and the investment will be used to stimulate business all over the world.
The long-term partnership also aims at accelerating trade in Africa in the long term, as well as strengthening Egypt’s position as a global centre for logistics and manufacturing, through the continuous expansion of the Sokhna Port.
The government is developing the Sokhna Port with EGP 20bn investment. What is the role of DP World in this development?
We support the government’s vision to make Sokhna an industrial and marine hub for Egypt. Our goal is to increase our operational capacity to keep pace with the growth of freight traffic and to develop the value chain and supply chain.
Has the company been affected by the COVID-19 crisis?
We did not suffer from any congestion inside the port during the COVID-19 crisis, but we had to protect our employees from the pandemic, so we followed all precautionary measures in accordance with the instructions of government health authorities, in addition to some additional precautionary measures that DP World is implementing at its affiliates around the world. Therefore, the main issue of concern to us during COVID-19 was to protect our employees and secure their transportation back and forth according to the highest international standards, and to protect their families, so we conducted educational and monitoring programs to emphasize adherence to face masks, social distancing measures, and sterilization, and to encourage them to adhere to the full precautionary measures that we used to apply it in the Sokhna Port, like all other DP World ports around the world.
However, we faced some challenges like the rest of the world, but they did not affect our work, as we were working 24 hours a day, 7 days a week. The congestion at that time was not because of COVID-19 but it was due to the rules and regulations imposed by port operators.
The number of truck drivers and extractors was not enough to handle the cargos, which naturally led to a slowdown but this problem was solved with the introduction of new regulations last January.
