Exclusive: Port operator Gulftainer to invest as much as $3bn to expand portfolio

The UAE company is looking to use the finance to double its container capacity in five years

Gulftainer has signed a concession deal to operate Port of Delaware. Courtesy Gulftainer

UAE port operator Gulftainer plans to invest as much as $3 billion (Dh11bn) over the next five years with financing from investors and banks as it seeks to double its container capacity and acquire assets, its chief executive said.

The operator wants to reach 10 million twenty-foot equivalent units - a measurement of a ship's container-carrying capacity - in five years, increase its cargo shipment handling and engage investors to help fund its $2 to $3bn expansion, Peter Richards told The National.

“We should not to be restricted to TEUs and containers because a lot of the entities that we're looking at now are not just containers but a lot of them are break bulk and general cargoes,” said Mr Richards. “We hope to continue our growth in the US market and at the same time we are looking at east and west Africa, and we are looking at Asia.”

Gulftainer’s main operations are located in the Middle East, where countries are looking to expand their maritime transport capacity to cater to increased trade and higher economic growth.

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Ports in the Middle East have announced plans to add capacity totalling about 57 million TEU by 2030, almost doubling the current level, according to the Boston Consulting Group. From 2011 to 2016, the compound annual growth rate of container throughput stood at 4 per cent, which exceeded the global average, the consultancy said in a report this month.

Gulftainer is expanding globally, and in September, signed a 50-year $600 million concession agreement to operate and expand the Port of Wilmington in state of Delaware in the United States. Around $400m will be invested in the development of a 1.2 million TEU facility at the Edge Moor complex previously operated by chemicals company DuPont and acquired by the Diamond State Port Corporation in 2016. The agreement is Gulftainer’s second US venture following its earlier $100m investment in Florida’s Port Canaveral in 2015.

The port operator, which is part of Sharjah's Crescent Enterprises, owned by the Jafar family, currently manages nine terminals in the US, Brazil and the Middle East.

Gulftainer is looking at signing concession agreements and snapping up assets in order to reach its growth target.

“We are looking at two to three entities to buy an existing business here in the Middle East and the US,” said Mr Richards, declining to give more details. “I am hoping the USA one will be concluded in 2019, the Middle east one maybe in 2020.”

The company is also hoping to enter Africa next year, “a continent that has so much of raw materials that the world needs at this time and the only way to get those out of Africa is to build good gateways.”

To finance its projects, the company would like to tap bank finance and engage with investors, including sovereign wealth funds, private equity players and other entities. But Gulftainer does not intend to sell a stake in the company or seek an initial public offering.

“We would look at a case by case basis and the actual project that we are involved in we would allow investors to participate in that project,” said Mr Richards.

“Infrastructure investments are very attractive. People are looking for a safe haven for their money."