x Abu Dhabi, UAETuesday 25 July 2017

DP World expands in Latin America

DP World expects its investment in two Suriname port companies to be completed in the third quarter.

DP World has expanded its Latin American footprint by acquiring controlling stakes in two Surinamese marine companies.

The investment in Integra Port Services (IPS) and Suriname Port Services (SPS) will allow DP World to manage cargo terminal facilities at Nieuwe Haven Port.

DP World did not disclose the financial terms for the acquisition, which is expected to be completed in the third quarter.

"We are very pleased to be adding ports in Suriname to our global portfolio underpinning our strategy of expansion into the faster-growing markets of South America," said Mohammed Sharaf, the chief executive of DP World.

"These terminals are well placed to handle all cargo into Suriname today but importantly they have the potential to expand in line with future demand as trade continues to grow, underpinned by Suriname's diversified natural resources sector, including oil, gold, bauxite, agriculture and forestry," said Matthew Leech, the senior vice president and managing director of the Americas for DP World.

In April last year, IPS was awarded a 15-year concession to manage and operate its terminal within Nieuwe Haven, with an option to extend for a further 15 years.

IPS is the largest terminal operator at Nieuwe Haven. SPS is a freehold break-bulk facility that specialises in handling mining and logging equipment, offshore supply and cement.

Nieuwe Haven terminal handles origin and destination cargo for Suriname. The terminal currently handles more than 100,000 standard containers per year, and DP World said the port had the potential to double capacity as demand grew due to the local economy. Other growth opportunities will come through improved road links into French Guiana and off-shore oil exploration, it said.

Kareem Murad, a senior vice president of research at Shuaa Capital, estimated the value of the deal was about US$47 million (Dh172.6m), based on the port's traffic volumes.

"No details have been made on the size of the investment, but it is relatively a small deal," he said. "This investment will be financed fully in equity given its small size."

The acquisition will increase revenues for DP World by $9.2m a year, out of total projected revenue of $2.9bn, Mr Murad estimated. His company has a "buy" recommendation on the stock.

igale@thenational.ae