AD Ports Group, the operator of industrial cities and free zones, is spending Dh955 million ($260 million) to buy eight bulk carriers and crude tankers to boost its maritime business.
The acquisitions of vessels will expand operations of the group’s shipping division under its Maritime Cluster and will help it meet its global expansion targets, AD Ports said in a statement to the Abu Dhabi Securities Exchange, where its shares are traded.
AD Ports will buy five bulk carriers for Dh459 million as part of the April 2022 long-term agreement with Saif Powertec, a listed ports and logistics company in Bangladesh, for the movement of general cargo and dry bulk cargo between the UAE’s Fujairah Port and Bangladesh, the Indian sub-continent, South-East Asia and other global destinations.
The purchase of three crude oil tankers, with a total transaction value of Dh496 million, is part of the seven-year vessel pooling agreement with KazMorTransFlot (KMTF), a subsidiary of Kazakh National Oil Company (KazMunayGas), for the transport of crude oil to international markets.
“The extension of our fleet … is a remarkable milestone for our Maritime Cluster and will further enable us to equip our business with the right assets and logistics capabilities to adapt to the evolving global demand within the industries in which we operate,” said Capt Mohamed Al Shamisi, managing director and group chief executive at AD Ports.
“More importantly, the vessel acquisitions are part of a larger expansion strategy by our group aimed at broadening our portfolio of services and taking our experience and service excellence to the wider bulk shipping and offshore oil markets.”
Established in 2006, the AD Ports Group, which owns and operates 10 ports in the UAE, has been expanding its operations globally.
In December, the group signed a shareholders agreement with KMTF to set up a joint venture to offer services, including offshore support and crude oil transport vessels in the Caspian and Black seas.
AD Ports aims to jointly transport eight million to 10 million tonnes of crude oil annually in the medium term.
KMTF, the offshore logistics arm of KazMunayGas, will submit tender for a “number of identified projects” with estimated maritime contract values of more than $780 million, AD Ports said in a bourse filing at the time.
In January, AD Ports also announced a partnership agreement with KazMunayGas and a preliminary accord with Kazakhstan's Ministry of Industry and Infrastructural Development for the development of a national marine fleet and coastal infrastructure.
AD Ports and KazMunayGas are exploring partnerships across a broad range of projects, including the development of a new fleet of shallow-water vessels as well as a tanker fleet to support the export of crude oil.
The two partners will also discuss a potential joint venture to participate in bulk cargo transport and will explore opportunities to build or acquire bulk cargo vessels to support that operation, AD Ports said.
The continuation of agreements with Kazakh companies and Saif Powertec “solidifies AD Ports Group’s collaborative ventures across the central and south Asian region supporting international trade and enhancing connectivity, providing a solid foundation for growth in some of the most important markets”, it said.