It seems a world away from Dubai. It has been a chill and prolonged winter in the UK, and the idea that a reclaimed slab of land just along the Thames from central London might represent a vicarious slice of life in the Gulf has a sense of the fanciful about it. The landscapes east of the capital city are either drab and featureless or grimly redolent of the country’s industrial and trading past, of a bygone age in Britain’s economic heritage.
Yet, in the midst of such geographic and historical legacies, a revisionist project is rapidly taking shape, an outreach of Dubai’s international and commercial profile. DP World’s London Gateway is a superport and business park on track to open in the fourth quarter of 2013, bringing with it what CEO Simon Moore has often reminded reporters will be a game-changing impact on the handling of the UK’s sea-borne trade.
Last month the phenomenally-sized cranes that will unload the mega-ships due to draw up alongside arrived, 138 metres tall at full height, following their three-month journey half way round the globe from China. It’s just the latest example of the emirate’s vision becoming reality, more immediate and tangible in effect than the myriad attractions being added to the giddying skyline of Dubai itself.
That much amounts to a marketing tale, albeit one that resonates. But what about what it represents? On the face of it, this particular project has a lot to say about not only Dubai’s ongoing business development and strategic outlook, but also by its reflection of the state of international trade and the world economy, and frankly also perceptions of Dubai Inc’s reputation, impinged as that was by the global financial crisis.
CEO of DP World Mohammed Sharaf shared his thoughts with me on each of those strands of the company’s experience in recent years, including London Gateway’s apparently inexorable path to fruition.
On whether the company is a serviceable proxy for conditions in world trade, Sharaf referred to the “strong headwinds” faced in the past year, so that, like every other business, DP World has had to focus on efficiency and containing costs.
”During the worst of the recession we continued to invest in our terminals in markets where capacity is constrained, knowing that this will pay dividends over time,” he declared. Besides London Gateway, that has meant expansions in Karachi (Pakistan), Callao (Peru), Dakar (Senegal), amongst others.
It is the emerging markets that will lead growth in the future, he asserted. “More than three quarters of our business is [there], and that has been an important ingredient in our continuing to outperform the industry.”
So how about DP World’s representation of Dubai Inc, and indeed the UAE as a whole?
The CEO affirmed the relationship. “The UAE’s GDP growth and the growth in volumes through our ports go hand in glove. One example of that interconnection over time was our announcement recently that Dubai ports have handled the 100 millionth container to pass through our UAE region terminals in ten years. Indeed, Dubai’s annual container throughput increased more than 150 per cent in the last decade, from around 5 million TEU (twenty-foot equivalent units) in 2003 to 13.3 million TEU in 2012.”
Whereas perceptions of the Gulf might veer to expectations of volatility, related either to swings in oil prices or movements in the US dollar and interest rates, the nature of DP World’s business makes it aligned to very extended horizons.
“We take a long-term view,” said Sharaf. “We have an average concession life of 43 years across our global portfolio of more than 60 marine terminals.” Jebel Ali Port will have a capacity of 19 million TEU in 2014 and be able to handle ten of the next generation 18,000 TEU mega-vessels at the same time. “Our customers are bringing in more and more of the ultra-large container ships -- and we are prepared for them.”
Anecdotally, the evidence is stacking up just five miles from me in the UK; and it’s compelling.