AD Ports Group, the operator of industrial cities and free zones, signed a 30-year concession agreement with Egypt's Red Sea Ports Authority to develop and operate a multi-purpose terminal at Safaga Port to boost its operations in the country.
Safaga Port, scheduled to be operational in the second quarter of 2025, will be the first internationally operated port in the Upper Egypt region, AD Ports said in a statement to the Abu Dhabi Securities Exchange, where its shares are traded.
AD Ports will invest up to Dh734 million ($200 million) in superstructure and equipment, buildings, and other real estate facilities and utilities’ networking inside the concession area, with most of that to be spent in 2024 and 2025, the statement said.
AD Ports also signed agreements for the development of two cement terminals in Al Arish Port and West Port Said Port, and four preliminary pacts for ports located in Egypt’s Red Sea region and the Mediterranean Sea.
The agreements allow for expanded access to multipurpose terminals, cruise routes and logistics capabilities in Safaga, Ain Sokhna, Port Said, Hurghada, Sharm El Sheikh and Al Arish, AD Ports said.
“AD Ports Group's significant concession agreement with the Red Sea Port Authority for the development of Safaga Port has the potential to play a major role in the global supply chain, evidencing, once again, that our partnerships in Egypt drive the advancement of the group’s portfolio of value-added investments,” said Capt Mohamed Al Shamisi, managing director and group chief executive of AD Ports.
“AD Ports Group is committed to not only enabling new trade connections, but also to providing infrastructure solutions to boost tourism to aid the diversification of both our nation’s economies.”
Established in 2006, the AD Ports Group, which owns and operates 10 ports in the UAE, has been expanding its operations around the world.
In January, the company signed a partnership with Kazakhstan's state energy company KazMunayGas and a preliminary accord with the country's Ministry of Industry and Infrastructural Development to co-operate in the development of a national marine fleet and coastal infrastructure in the Caspian and Black seas.
It also teamed up with Angolan organisations in January to develop and improve maritime connectivity along Africa’s west coast.
Last year, AD Ports acquired Spain’s integrated logistics platform Noatum for Dh2.5 billion.
In September, AD Ports completed the acquisition of a 70 per cent equity stake in Egypt's International Associated Cargo Carrier for Dh514 million. The deal, announced in July, completed the company's first international acquisition.
AD Ports had first signed an agreement to explore investment opportunities and conduct feasibility studies for the Safaga Port in November 2021.
The latest agreements “build upon the strong historic and economic ties between the UAE and Egypt which recently celebrated 50 years of friendship and co-operation”, AD Ports said.
The UAE is Egypt’s second leading trade partner in the region and the first for foreign direct investments, accounting for 29 per cent of FDI in Egypt.
Meanwhile, Egypt is the fifth main trading partner of the UAE in terms of non-oil trade, accounting for 7 per cent of the Emirates' total non-oil trade with Arab countries.
“As part of AD Ports Group, our ports cluster is currently involved in a wide range of projects throughout Egypt, and in particular in Safaga Port,” said Saif Al Mazroui, chief executive of the ports cluster.
“Our expertise as facilitators of global trade, as well as developers and operators of strategic port infrastructure projects, combined with Safaga Port’s strategic location on the Red Sea, means that we are uniquely positioned to deliver activities from managing port and logistics operations to providing tourists with access to Egypt’s fascinating history and culture. This will lend support to and promote the growth and diversification of the Egyptian economy.”
The Safaga terminal will be developed over an area of approximately 810,000 square metres, AD Ports said.
It will have a quay wall of up to 1,000 metres with the capacity to handle 5 million tonnes of dry bulk and general cargo, 1 million tonnes of liquid bulk, 450,000 twenty-foot equivalent units of containerised cargo, and 50,000 car equivalent units of roll-on/roll-off (RoRo) cargo ships.
There will be no currency exposure associated with the operations of the port as all revenue will be dollarised, AD Ports said.
Meanwhile, the agreements for the development of two cement terminals in Al Arish Port and West Port Said Port were signed between AD Ports Group and the General Authority for the Suez Canal Economic Zone, with a combined investment of Dh121 million in both terminals.
As per the 15-year agreements, AD Ports Group will construct silos with a capacity of up to 60,000 tonnes in Al Arish Port and 30,000 tonnes in West Port Said.
Each terminal will be able to handle between 1 million and 1.5 million tonnes annually.
The terminals, scheduled to be operational in the fourth quarter of this year, are expected to contribute to doubling Egypt's cement exports.
Meanwhile, the initial agreement for Sokhna covers the development of three terminals, including RoRo, cruise and multi-purpose. The agreement was signed between AD Ports and the General Authority for the Suez Canal Economic Zone.
The two entities also signed a preliminary agreement for possible collaboration in transport and infrastructure projects, with an initial focus on the development of the East Port Said multi-purpose terminal, as well as a logistics zone and economic zone.
An initial pact for the management and operation of a cruise terminal in the port city of Hurghada in Egypt was signed between AD Ports and the Red Sea Ports Authority.
The two also signed an initial agreement for the development, management and operation of a cruise terminal in Sharm El Sheikh.