Abu Dhabi Ports, which operates ports, industrial cities and free zones in the emirate, and French transportation and shipping company CMA CGM Group have formed a joint venture and signed a 35-year concession agreement to develop and operate a new terminal at Khalifa Port.
The terminal will be managed by the joint venture company 70 per cent owned by CMA CGM’s subsidiary CMA Terminals and 30 per cent owned by Abu Dhabi Ports. The partners are expected to commit about Dh570 million ($154m) to the project, Abu Dhabi Ports said in a statement on Thursday.
The construction will begin this year and the project will be handed over in 2024. The terminal will have an initial annual capacity of 1.8 million twenty-foot equivalent units (TEUs), the company said.
“This agreement with the CMA CGM Group … will significantly accelerate trade and the development of industry in the UAE and beyond,” said Falah Al Ahbabi, chairman of Abu Dhabi Ports.
“As well as driving increased trade volumes through our port … we expect the facility’s capacity and added trade links with other high-profile port destinations will drive investment into local businesses and our industrial zones, fast-track the development of key sectors including manufacturing and logistics and raise demand for manpower.”
Abu Dhabi Ports, owned by one of the region’s largest holding companies, plans to list shares on the Abu Dhabi Securities Exchange. The listing is expected to take place before the end of this year, subject to market conditions and regulatory approvals, ADQ said in earlier this week.
Abu Dhabi Ports owns and manages 11 ports and terminals in the UAE and Guinea, including Khalifa Port, Zayed Port, Musaffah Port, Fujairah Terminals, Community Ports, Kamsar Port and Abu Dhabi Cruise Terminal. It operates more than 550 square kilometres of industrial zones within Khalifa Industrial Zone Abu Dhabi (Kizad) and ZonesCorp, the largest integrated trade, logistics and industrial business grouping in the Middle East.
Abu Dhabi Ports will develop supporting marine works and infrastructure for the new terminal, the statement said. This includes up to a total of 1,200 metres of quay wall, a 3,800m breakwater and 700,000 square metres of terminal yard.
“The addition of another leading shipping company will make Khalifa Port a hub for three of the world’s top four shipping companies,” said Capt Mohamed Al Shamisi, group chief executive of Abu Dhabi Ports. “This addition creates opportunities to open trade routes to new markets in Europe, Africa, Western Asia and South Asia.”
The terminal will provide CMA CGM with a new regional hub and enable the company to develop its service between Abu Dhabi and South Asia, Western Asia, East Africa, Europe and the Mediterranean, as well as the Middle East and the Indian subcontinent, the statement said.
The CMA CGM Group currently operates 49 port terminals in 27 countries through its subsidiaries CMA Terminals and Terminal Link.
“The ambitious project we are launching in Abu Dhabi marks an important milestone in CMA CGM’s development strategy in the region,” Rodolphe Saadé, chairman and chief executive of the CMA CGM Group, said.
Abu Dhabi Ports reported revenue of Dh3.4 billion in 2020, a 24 per cent jump from the 2019 financial year, despite the pandemic's effect on global trade. Its key revenue streams were driven by strong operational performance.
The company's earnings before interest, taxes, depreciation and amortisation surged 37 per cent to Dh1.5bn in 2020 as its Ebitda margins improved to 45.2 per cent in 2020, from 40.7 per cent in 2019. The company's asset base expanded by Dh3.1bn to Dh24.8bn at the end of 2020.
In April, Abu Dhabi Ports raised $1bn through the issuance of a 10-year bond.