DP World and Canada’s CDPQ plan $4.5bn of new investments in port terminals

The two companies are expanding their investment vehicle to look at new investment opportunities around the world

DP World and Canada’s CDPQ are planning $4.5 bilion of new investments in port terminals. Reuters/ Hamad I Mohammed

Dubai's DP World, one of the world's biggest port operators, and Canada’s Caisse de dépôt et placement du Québec (CDPQ) are to invest a further $4.5 billion (Dh16.52bn) in their global portfolio of ports and terminals.

The additional capital will be used to expand in both new and existing regions, including Europe and Asia Pacific, and in supply chain support services, the two companies said in a statement on Thursday. It will bring the total size of their investment platform to $8.2bn.

“The opportunity for the port and logistics industry is significant and the outlook remains positive as consumer demand triggers major shifts across the global supply chain,” Sultan Ahmed Bin Sulayem, group chairman and chief executive of DP World, said. “We look forward to working together on new investments that will connect key international trade locations worldwide.”

The ports and terminals investment platform was first set up by DP World and CDPQ, a Canadian asset management firm that oversees Quebec's public pension fund, in 2016.

DP World has been growing its logistics operations through a series of recent acquisitions, as part of its strategy to become an end-to-end supply chain solutions provider. Earlier this year, it agreed to buy a 60 per cent share in South Korea's Unico Logistics.

“As we take the next step in our partnership, we will further diversify our geographic reach and look to seize new opportunities in a sector that, even during a uniquely challenging period, is driven by long-term fundamental trends,” Emmanuel Jaclot, executive vice-president and head of infrastructure at CDPQ, said.

DP World's first half profit declined as shipping container volumes fell due to the coronavirus pandemic that has hit global trade.

The World Trade Organisation said in late June that global trade was set for an annual decline of 18.5 per cent in the second quarter of the year, following a 3 per cent decline in the first quarter.

Profit attributable to DP World's shareholders in the first six months of the year fell to $313 million, a drop of 58.5 per cent on a reported basis or a 34.5 per cent decrease excluding a land sale to Emaar Properties in 2019, DP World said last month. Revenue during the period rose 17.7 per cent to $4.07bn from the same period a year ago, driven by acquisitions.