BackDP World plans to buy ports in China, India
DP World plans to buy ports in China, India
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Singapore: DP World, thwarted in an attempt to expand in the US, is seeking to buy or expand port facilities in China and India as trade booms in the world’s two fastest growing major economies.
The firm, the third biggest container terminal operator, needs to expand in India and China to meet its target of doubling capacity by 2016, chairman Sultan Ahmed bin Sulayem said on Thursday in an interview in Singapore.
Owned by the government of Dubai in the United Arab Emirates, DP World is in talks to acquire Chinese port assets, he said.
DP World and rivals such as Toll Holdings Ltd, Australia’s largest freight mover, plan to invest more in China, where container volumes have tripled since 2001 on exports.
The Dubai-based company’s expansion in Asia follows the sale of six US terminals this year to American International Group Inc. because of political opposition in the country.
“There is a need for more ports in India and China," said Tahnoon Pasha, who oversees $2.2 billion (Rs8,888 crore) as head of Asian equities at Manulife Asset Management in Hong Kong.
“The volume of trade will continue to accelerate partly because of an increase in demand and partly because of more value-added production in these countries."
Last month DP World had raised $3.25 billion selling bonds, partly to help fund expansion plans, including in the world’s two most populous countries. Almost 90% of global trade is handled by sea.
“Asia is a major growth area and wherever our customers are going, we will be there," bin Sulayem said. “India and China are two important markets for us."
The company aims to double its annual handling capacity to 84 million 20 ft equivalent container units by 2016.
The company operates 42 terminals in 22 countries, ranking behind PSA International Pte. and Hutchison Port Holdings Ltd.
“The doubling is going to come from acquisitions and managing new ports, which is already happening, and we have others in the pipeline," bin Sulayem said.
In India, DP World is investing $500 million in a container terminal in the southern city of Kochi.
It’s also spending $190 million to expand the Kulpi port in West Bengal, which it acquired as part of its $6.8 billion acquisition of London-based Peninsular and Oriental Steam Navigation Co. (P and O). DP World’s total investments in India will likely reach $2 billion, senior vice-president and managing director Ganesh Raj had said in March.
In January, DP World won approval to build a terminal in Qingdao, mainland China’s third-busiest port. The company already has a stake in a terminal at the port, South-East of Beijing.
It also has stakes in terminals in Tianjin and Shanghai. DP World has been expanding in new markets such as Asia, where its Dubai Drydocks World LLC bought a 70% stake in Singapore’s Pan-United Marine Corp. in May.
Clare Cheung and Bernard Lo in Hong Kong, Massoud Derhally in Dubai, Leslie Tan and Jean Chua in Singapore contributed to this story.
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