x Abu Dhabi, UAETuesday 25 July 2017

Afghanistan on the horizon as Dubai's DP World plots growth

The Dubai ports operator is exploring opportunities in countries including Afghanistan and Myanmar as it aims to build its business in underdeveloped markets.

DP World is aiming to expand its presence in India, where it is already the country's largest ports operator. Adeel Halim / Bloomberg
DP World is aiming to expand its presence in India, where it is already the country's largest ports operator. Adeel Halim / Bloomberg

Dubai's DP World is exploring opportunities to develop ports in countries including Afghanistan and Myanmar as it aims to gain a foothold in underdeveloped markets with potential for growth.

Kazakhstan and Uzbekistan are also on the ports company's radar, said DP World.

"In all these places the infrastructure is lacking," it said. "There's a waiting period for ships. It's inefficient."

Afghanistan presents one new, but risky, territory for the company, it said.

"It's a difficult country, difficult terrain, but it is in these difficult places that you have good opportunities," said the company.

DP World is looking at opportunities to develop dry ports and inland ports within landlocked Afghanistan.

Another market of interest is Myanmar, formerly known as Burma, which only recently started to open up politically and economically.

"Myanmar is exploratory at the moment because they're just opening up," said DP World. "It's an interesting place and we have to be there. It needs development. We are talking to ... government, local partners. It's an opportunity for us."

No figure for the potential investment into these markets has been disclosed, but with current infrastructure being severely limited, DP World would have to develop the ports from scratch.

The company is also aiming to expand its presence in India, where it is already the country's largest ports operator.

The company operates five Indian container ports, including facilities in Mumbai and Kochi, as well as a train service for cargo. It has invested more than US$1 billion (Dh3.67bn) in the country.

"We are looking at other opportunities for growth in India," said Anil Singh, DP World's managing director for the subcontinent.

Plans to develop a port in Kulpi, in the north-east have been delayed as the company negotiates with the state government on infrastructure to support the project.

"There are some conditions that the [state] government satisfy, such as road connectivity, before we sign the agreement," said Mr Singh. "Until that is done building a port doesn't make sense."

DP World is in the process of restructuring its business in India to bring the assets under one holding company in the country. Its new holding company, Hindustan Ports, was approved by India's foreign investment promotion board last week, said Mr Singh. Some of its assets were acquired after DP World bought the Peninsular and Oriental Steam Navigation company (P&O) in 2005.

"We are looking at trying to restructure our assets," said Mr Singh. "When we acquired P&O it was very patchy. Some of it was in Australia, some of it was in Mauritius, some of it was in London. So what we are doing is consolidating everything and bringing it onshore [in India]."

As part of its growth in the region, DP World is in the bidding stage for a port project in Chittagong in Bangladesh and recently won a contract to build and operate a $200 million facility in Mumbai to expand India's largest container port.

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