Container firm sets up Djibouti venture

Dubai: Middle East Container Repair Company (MECRC) has set up a new firm in partnership with Djibouti Port to provide container cleaning and repair services in Djibouti.

Located in the port complex, Djibouti Container Services (DCS) has been sub-contracted to inspect and carry out repairs on containers, the new company's general manager John Ash told Gulf News.

MECRC and Djibouti Port each have 40 per cent share in the venture and two Djibouti business groups have the remaining 20 per cent.

Djibouti is emerging as a regional transshipment hub and container volumes have been rising at its port, which is managed by DP World.

A new container terminal with a capacity of 1.5 million TEUs (20-foot equivalent units) is being developed by the Dubai firm with an investment of $300 million.

"We want to be ready before the new terminal is built," Ash said.

The new terminal, expected to become operational in the second half of 2008, will significantly increase Djibouti's capacity to handle containers and turn it into a hub for regional trade.

Ethiopian cargo accounts for about 80 per cent of the volume handled by the Port of Djibouti, which recorded a throughput of 159,000 TEUs in 2004.

For now, DCS expects to handle 72,000 containers a year, according to Ash.

"Located on the main shipping route, Djibouti has a lot of potential for the future," he said, adding that as trade within the region grows demand for professional container repair and inspection services will grow.

DCS is registered in the Djibouti Free Zone that is run by the Jebel Ali Free Zone Authority. Among key projects in which Dubai firms are involved is Djibouti's first five-star hotel being built by Nakheel.

The Djibouti venture marks MECRC's first foray into an overseas market. United Arab Shipping Company (UASC) owns 49 per cent of MECRC, with 51 per cent stake held by seven other companies.

The company was established in 1981 in Dubai and opened a container repair facility in Port Rashid. In 1994, it opened its second workshop in Abu Dhabi's Mina Zayed and in 2001 opened its third UAE facility in Jebel Ali.