Mohammed Sharaf, DP World's chief executive, says the ports operator will increase the capacity of its Sokhna port in Egypt.
DP World sticks with Egypt plans
LONDON // DP World plans to increase the capacity of Sokhna port in Egypt by nearly half this year, says the company's chief executive.
The expansion of Sokhna is a vote of confidence in the port after recent labour strikes.
"It will be the end of this year … We will go from 700,000 twenty-foot equivalent container units to 1 million TEU," said Mohammed Sharaf, the chief executive of DP World. "Sokhna has all the right components of a successful port."
Sokhna, which is near the southern end of the Suez Canal, is well positioned to serve the flow of trade between Europe, Africa and Asia. The port is 110km by road and rail from Cairo, the largest single market in the Arab world's most populous nation.
DP World, the third-largest global operator of ports, signed an agreement with Egyptian authorities in October last year to double the size of container operations at the port within four years to meet rising demand.
But Egypt has been troubled by instability since Hosni Mubarak was ousted as president in February. Last month, operations at the port were halted for five days when employees went on strike demanding better conditions. The shutdown reportedly cost DP World about US$5 million (Dh18.3m).
"This is a temporary phase the country is going through," said Mr Sharaf. "Our investments are long-term, 25 or 35 years. Eventually, the situation will turn around, and even if it takes longer, trade will continue, maybe at a lower pace, but it will continue."
Industrial action could persist at Egypt's ports and elsewhere in the country, Business Monitor International (BMI) warned in a report last week.
"The strike offers further downside risk to our already negative forecasts for the port [Sokhna] in 2011," BMI said in its report.
Container movement at the port was expected to decline 9.8 per cent this year compared with last year, BMI said.