LONDON // DP World is pushing ahead with US$1.5 billion (Dh5.5bn) of investments in ports worldwide despite mounting fears of global trade protectionism.
The expansion by the Dubai ports operator comes as a darkening global economy triggers slowing shipping traffic and rising risks of trade barriers.
"Global recession fears are back, but DP World is in a better state to handle a decline in trade volumes," said National Bank of Kuwait (NBK) in its latest research note.
Helping the company to weather the slowdown in global markets has been DP World's focus on bolstering its presence in faster-expanding developing economies such as Asia and South America.
It has increased its exposure to emerging markets to 86 per cent, up from 75 per cent in 2008, says NBK.
In the first half of the year, the company reported profit of $281 million after tax before separately disclosed items, 36 per cent ahead of the same period last year.
DP World's robust performance is at odds with an overall trend of a deceleration in the world ports business.
Falling demand for shipments is being hampered by a flood of new capacity ordered before the previous financial crisis.
"Trade has grown more slowly than expected in recent months," the World Trade Organization (WTO) said in its latest outlook.
"Developed countries in particular have been buffeted by strong headwinds, including the lingering effects of the earthquake and tsunami in Japan, the prolonged budget impasse and credit downgrade in the US and the ongoing euro-area sovereign debt crisis."
The WTO last month dropped its annual projection for growth in the volume of merchandise trade to 5.8 per cent from the 6.5 it predicted in April.
Exports from developing countries would rise 8.6 per cent, outperforming developed economies, where shipments would accelerate only 3.6 per cent.
The crisis has led to anxieties about an outbreak of trade protectionism, threatening to further throttle shipping prospects.
The twin challenge of problematic sovereign debt and cooling growth in the euro zone and the US could knock confidence, demand and investment in developing economies, Robert Zoellick, the World Bank president, has warned.
As a result, countries could impose tariffs on exports, he said last month in an interview with Bloomberg News.
"In an environment like this, you have to watch out for all types of protectionism."
Despite gathering gloom surrounding trade, NBK, Deutsche Bank, EFG-Hermes and Nomura have in recent weeks upgraded their forecasts for DP World's trading and financial outlook.
The company plans to spend $1.5bn in capital expenditure across this year and next, more than a third of which will be invested in new terminals, it said in August.
A substantial part of the investment will be channelled into developing London Gateway, a deepwater port under construction on the north bank of the River Thames in Thurrock, Essex.
DP World is expected today to announce an update on the development, which once complete, will create Europe's sixth biggest port and 12,000 jobs for the flagging UK economy.