DP World pulls out of Russian port

DP World is pulling out of its operations in the port of Vostochny, the largest container terminal in the Russian Far East and one of the key gateways for the Russian container network.

DP World will invest the $230m gained from the sale of its stake in Vostochny, above, into other ports projects such as the London Gateway. Ursula Hyzy / AFP

DP World yesterday said it was pulling out of its operations in the port of Vostochny, the largest container terminal in Russia's far east and one of the key gateways for the country's container network.

The Dubai-based port operator sold its quarter stake in the Vostochnaya Stevedoring Company to Global Ports Investment for US$230 million (Dh844.8m).

The Russian-owned Global Ports, which already held 75 per cent of Vostochnaya, will now take full control of the terminal.

Sultan Ahmed bin Sulayem, the chairman of DP World, would not rule out the sale of further assets in the future, but he told The National that there was not an overall strategy of divestment.

"We are in the business of running ports, and we are continuing to run ports and we are continuing to expand," he said.

The sale of the Russian port, which was neither majority owned nor managed by DP World, comes in tandem with plans to develop other major ports.

Mr Sulayem said the money from the sale of the Vostochny stake would be invested into other ports projects such as the London Gateway. "This money is going to generate more money for us," he said. "There are many projects in the pipeline which we will be investing [in]." The sale is the latest in a series of disposals by DP World.

In Belgium, where it operates three terminals, the company sold its stake in DP World Breakbulk and AProjects, whose assets were worth $61m, last July to a company called Orienta.

DP World Breakbulk was a joint venture formed in 2007 to operate a general cargo terminal at the Port of Antwerp, while AProjects offered logistical services.

In Yemen, DP World's local unit sold its 50 per cent stake in Aden Port Development for $27m to its joint venture partner, the state-owned Yemen Gulf of Aden Ports. It had won the contract to develop and run the port in 2008.

Also in July, DP World was forced to hand over its 60 per cent holding in Adelaide's container terminal to Flinders Port after the Australian firm exercised its right to buy the stake.

The sale was triggered by a transaction last year in which DP World agreed to sell 75 per cent of its entire Australian operations to the private-equity firm Citi Infrastructure Investors for A$1.5 billion (Dh5.68bn).

The company also sold its 34 per cent stake in England-based Tilbury Container Services for US$75.5m in January.

But DP World, which manages more than 60 terminals across six continents as the world's third-largest operator, still intends to spend an estimated $3.7bn on its infrastructure projects between last year and 2015. "The developments include mega-projects like London Gateway, Rotterdam Gateway, and terminals 2 and 3 at Jebel Ali, to take the domestic container handling capacity to 19 million TEUs [twenty foot equivalent units]," said Rashid Abdulla, the senior vice president for global operations at DP World.

The company is also expected to begin construction work soon on the Yarimca terminal in Turkey. The terminal will be fully owned by DP World and be built near Istanbul with a capacity of 1.3 million TEUs upon completion.

London Gateway will add 2 million TEUs capacity by the fourth quarter of next year, while Rotterdam Gatewayis due to be completed between 2014 and 2015.

DP World currently has a net debt of $3.5bn, according to its half-year earnings report released in August.

Meanwhile, International Container Terminal Services, (ICTSI) which operates cargo facilities in 17 countries, plans to add 10 new projects during the next 10 years using emerging markets to help it to avoid the effect of the euro-zone debt crisis.

The company was looking at the Democratic Republic of Congo, Ivory Coast, Cameroon and Kenya, said the president and chairman Enrique Razon.

The company, based in Manila, in March signed a terminal deal in Nigeria.