Khalifa Bin Salman Port: a hub for the Northern Gulf

Khalifa Bin Salman Port: a hub for the Northern Gulf

KBSP building on hub image

Gulf Industry reports on a combination of factors that have helped Khalifa Bin Salman Port make strong strides and raise its profile as a hub

01 July 2013

Bahrain’s Khalifa Bin Salman Port (KBSP), which has been used as a transshipment hub for some of the Saudi traffic in recent months, is being viewed increasingly as a pivotal Northern Gulf hub and an alternative hub to carriers keen to grow their presence in the upper Gulf, a senior official says.

“Bahrain is an ideal location as a transshipment hub for the Saudi market. Considering the big support we have in transshipments, we’re looking to put up a more sustainable structure so shippers can use the port to solidify their commitments to the Upper Gulf,” said Yusif bin Sanad, general manager-commercial, APM Terminals, Bahrain.

“We’re giving customers reason to say we’re reliable,” he added. Bin Sanad said delays from congestion at some ports in recent months and Bahrain’s role in chipping in to help relieve the situation showed that “people are always looking to optimise their supply chain and are happy with the reliable and efficient product we offer.”

Bahrain has been marketing the Seabridge concept which offers a convenient trade route between KBSP and the Saudi eastern industrial port of Jubail. There has been a significant increase in cargo movement across the Seabridge which is now being offered structurally by weekly sailing by container carriers or by means of break-bulk operators for non-containerised goods.

New Bahrain steel-maker Sulb exported 50,000 tonnes of steel through the Seabridge between April and June and exports will likely continue through that route because of challenges on the Bahrain-Saudi Causeway.

APM Terminals says it is encouraged that increasing numbers of customers are seeing the benefits of having Bahrain add value to their supply line. “We’re telling shippers empty containers are sitting in Bahrain that can be loaded with cargo for Jubail. There’s export potential for the Bahrain-Jubail sector,” said APM Terminals Bahrain chief commercial officer Simon Brebner.

Heavy growth in Causeway traffic has pushed it to the brink with some 500 containers needing to go through to Saudi Arabia daily. This emergency has prompted authorities to push for the Seabridge.

Bahrain’s organic industrial development and the large Saudi hinterland adjacent to it mean cargo traffic is bound to increase. Large industrial plants in Bahrain are also exporting their goods to the wider regional and international markets, making KBSP even busier.

Mondelez (formerly Kraft Foods), the maker of cheese and beverage powders, is significantly expanding capacity, Sulb will be exporting its steel products in a big way and the Arabian Sugar Co plant will import raw sugar and export some 650,000 tonnes of the refined product, a figure higher than the half-million tonnes of general cargo that KBSP handled in the whole of 2012. The first shipment of raw sugar was expected by the beginning of July. The port has been handling exports of containerised aluminium ingots and billets from Alba and bulk Saudi-bound Alba metal as well as exports of sulphur in bulk. Imports include cement, aggregates, steel, timber and cars.

KBSP, which commenced operations four years ago, expects the total tonnage increase this year to approximate 7.4 per cent with an annual increase of 6.4 per cent between 2013 and 2017 because of growing activity in the construction sector and increases in cement and steel production, says Brebner. Companies including Mondelez and BASF will also be pushing for greater exports. A new industrial park is being created.

The port is expecting a container traffic increase of 6 per cent in the next four years at an annual increase of five to six per cent, says Brebner.

Local container volumes increased by 11 per cent in 2012 with local general cargo volumes moving up by 13 per cent compared to the previous year. The port saw record volumes of transshipment cargo pass through its facilities last year. APM Terminals says it demonstrated a marked development in its overall competence in 2012 and achieved outstanding performance despite the slowdown in the global economy.

Transshipment prospects look good for KBSP promoters. Comments Bin Sanad: “The port will grow not because of any congestion in Saudi ports but because of the boom. Bahrain being a transshipment hub we’ll redistribute from here. The Bahrain-Saudi relationship needs to grow.” To be competitive, the port charges $200 per container for Bahrain to Saudi Arabia, down from $1,400. “We’re attracting more cargo from exporters and creating a better deal and a win-win situation for all,” says Bin Sanad.

“Qatar’s needs are being served through Bahrain and Iraq is a strong prospect. Bahrain is now clearly positioned for the Upper Gulf. Customers are willing to work through Bahrain, stepping up volumes. Four years down the line, new companies have arrived and started production. Businesses believe in Bahrain’s value propostion and that’s a strong signal.”

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