DP World Primer

DP World Primer – By Afshin Molavi (Part of the Dubai Silk Road Series)

Dubai-headquartered DP World is the world’s fifth largest container terminal network operator, handling 71.4 million twenty foot equivalent units (TEUs) last year at 78 marine and inland terminals across 6 continents. Founded in 2005 by merging the Dubai Ports Authority and Dubai Ports International, DP World has become a major trade enabler across emerging markets. According to DP World, some 75% of their trade volume flows through emerging/frontier markets.

It is also the only listed major port operator, listed on the Dubai International Financial Exchange in 2007.

Here’s a world map of their operations.

These are the Top 5 container port operators worldwide, according to Lloyd’s List, with DP World coming in at number 4 due to a recent purchase of  European container ship operator, Unifeeder.

TEU’s compiled by Afshin Molavi from public data. Order above based on Lloyd’s List; TEU’s not the sole criterion.

According to my calculations, these five port operators handle about half of the world’s containerized trade.

DP World’s flagship operation is located in Jebel Ali, in the United Arab Emirates. The Jebel Ali port is the ninth busiest container terminal port in the world. Here’s a cool visual on the biggest container ports in the world.

DP World in Africa

DP World operates, develops and manages 7 marine and inland terminals in Africa. They include Senegal’s busiest container terminal as well as DP World Maputo, three berths on the Suez port of Sokhna, Egypt, an inland logistics facility in Rwanda, as well as facilities in Algeria, and a new facility in Berbera, Somaliland.

The company was recently awarded more than $500 million by a London court arbitrating its dispute with Djibouti over the managing and developing of the Doraleh Container Terminal. Quartz Africa has a good piece on the background and the business and geo-strategic elements of the conflict between DP World and Djibouti, and the tussle between DP World and China Merchant Port Holdings. The tussle, however, has done nothing to dent the dramatically rising commercial relationship between China and the UAE.

In a press release issued on February 5, 2019, Group Chairman and CEO Sultan Ahmad bin Sulayem, said “performance in Africa remains robust driven by Dakar (Senegal) and Sokhna (Egypt).”

Timeline of Key Events – DP World

• 1972 – Port Rashid is launched with 11 berths; This begins Dubai’s journey as a sea trade hub for the region
• 1976 – Ruler of Dubai launches Jebel Ali Port construction, x miles away from Port Rashid; At the time, many saw it as white elephant and unnecessary given the recent launch of Port Rashid. According to accounts at the time, some merchants even tried to get him to stop it.
• 1979 – Jebel Ali completed, and it begins attracting major industrial players to set up business just outside the port
• 1991 – Dubai Ports Authority is created to merge Port Rashid with Jebel Ali under one authority. By this time, traffic to Jebel Ali had been rising dramatically, and the two ports combined went over the one million TEU mark.
• 1999-2004 – Dubai Ports goes international with the formation of a company to manage and operate container terminals outside the UAE; over the next few years, the newly formed entity, Dubai Ports International FZE, wins contracts in Djibouti, India, Romania, and Saudi Arabia
• 2005 – DP World is officially established by merging Dubai Ports Authority and Dubai Ports International.
• 2005 – DP World acquires CSX World Terminals, one of the world’s largest terminal operators, catapulting DP World into the “Premier League” of terminal operators
• 2006 – DP World purchases Peninsular and Oriental Steam Navigation Company, P&O Maritime, increasing dramatically its global network.
• 2007 – DP World listed on Dubai International Financial Exchange (DIFX) in what was at the time the largest IPO in the region, valued at $4.96 billion dollars.
• 2008-9 – Major acquisitions and operating contracts won include Brazil’s EmbraPort as well as ports in Netherlands, Algeria, Spain and Peru
• 2013-17 – Acquired Prince Rupert Container Terminal (Canada), Won 30 year concession for Port of Berbera (Somaliland); Consoidated Santos Brazil with 100% ownership
• 2018-19 – Investment with National India Infrastructure Fund to invest up to $3 billion across the country; 30 year concession for port in Banana, DRC; 100% acquisition of Unifeeder Group, largest container feeder and shortsea network operator in Europe

Sources: Most of the timeline information above comes from DP World.

Now, if you really want a deep dive on DP World, I found this presentation online that they gave to investors in May 2019.