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KBSP: riding success

KBSP: riding success



Robust growth

In its new avatar as a public joint stock company, APMT Bahrain will continue to boost its transhipments and pursue ongoing discussions with feeder vessels to service the areas of Upper Gulf markets of Kuwait and Iraq, writes Pummy Kaul

January 2019

As APM Terminals Bahrain CEO and managing director Mark Hardiman prepares to hand over the reins to his successor in February, 2019, he leaves behind an enormously transformed Khalifa Bin Salman Port (KBSP), Bahrain’s commercial port.

The port, operated by APM Terminals Bahrain, has not only experienced impressive and sustained growth over the recent years but also got a boost from its successful initial public offering (IPO) and subsequent listing as a public joint stock company.

This was the first IPO for a transport and logistics company in the Kingdom to list on the Bahrain Bourse. The listing forms part of the 25-year concessional agreement made when the port opened in 2009.

On the cards now is the formulation of a new board and relevant committees for the public joint stock company, a revamp of the structure and allocation of new roles, the outgoing CEO /MD Hardiman tells the Gulf Industry magazine.

Hardiman: a veteran of the logistics industry

Hardiman: a veteran of the logistics industry

“Given the fact that APM Terminals is now a public joint stock company, we are working to ensure that we abide by the applicable corporate governance principles and other applicable laws. The company intends to adopt a comprehensive corporate governance framework based on which the board and the company’s executive management will continue to competently manage the company, in order to achieve effectiveness and efficiency in operation, reliability in financial reporting and compliance with the applicable statutory laws and regulations,” he says.

The company has just elected a new six-member board of directors following the successful oversubscription of its IPO, said the company.

The new board members of the public-listed entity include David Skov, Soren Jakobsen and Fawzi Ahmed Kanoo as executive directors and Jesper Kjaedegaard as a non-executive director, while Mohamed Bin Ebrahim Juma Alshroogi and Nadhem Saleh Al Saleh have been named independent directors.

 

SHIPPING HUB

Over the past nine years, APM Terminals has contributed towards positioning KBSP as a hub with its world-class operations and logistical solutions, serving both the country and the wider region, in line with the kingdom’s Economic Vision 2030.

“We believe that the government of Bahrain is moving ahead in the right direction with its policies and initiatives to keep Bahrain on track for sustainable and diversified economic growth. An export oriented industrial growth will play a vital role in a well-rounded development of the economy as it will help in increasing the gateway volume, more hub opportunities for value-added services for manufacturing companies thereby increases logistics activities including transshipments and transit cargo, provide more employment opportunities and earn foreign exchange which will spur growth in the right direction,” says Hardiman.

The port currently has a container throughput capacity of 1 million twenty feet equivalent unit (TEUs) per annum, with utilisation of around 45 per cent in 2018. There is potential to expand to 2.5 million TEUs per annum in the future.

“KBSP is presently running at almost 45 per cent of its capacity. The port has the capability and capacity to double the throughput. In view of the upcoming infrastructure and modernisation projects in the kingdom the spare capacity will certainly be effectively utilised,” Hardiman says.

APM Terminals Bahrain has exclusive rights to manage all of Bahrain’s container traffic

APM Terminals Bahrain has exclusive rights to manage all of Bahrain’s container traffic

APM Terminals Bahrain has exclusive rights to manage all of Bahrain’s container traffic and the majority of its general cargo traffic. It prohibits the government from building and operating another port facility in Bahrain (other than private jetties or fishing harbours) until 1 April 2024.

It also has exclusive rights to provide marine services (such as pilotage and towage) to KBSP and the old Mina Salman Port (MSP). APM Terminals Bahrain can also provide pilotage services within Khawr Al Qulay’ah, Sitra anchorage and approach channel to all private jetties requiring such services, except for Arab Shipbuilding and Repair Yard (Asry). It also has non-exclusive rights to provide marine services outside KBSP and MSP, within the territorial waters of Bahrain.

“Being the only commercial port, KBSP, plays a vital role in the economic development of the Kingdom of Bahrain by facilitating smooth trade flows, which has been possible with APM Terminals bringing in the required expertise, competitiveness and operational excellence as per international standards,” he adds.

 

GROWTH STREAK CONTINUES

Continuing the positive trend, the port’s local container throughput Year to Date (YTD) 2018 has shown a growth of 7 per cent, over the same period in 2017, Hardiman reveals.

“Following 2017, where most of the larger pieces of project cargoes were brought in break-bulk form, there has been a shift in 2018, whereby smaller cargoes for the same projects have arrived in containers during first half 2018, thus contributing largely to the Year on Year (YoY) growth,” he tells the Gulf Industry.

While imports YTD 2018 has shown a growth of 7 per cent YoY, exports have shown a growth of 8 per cent for the corresponding period. Exports have picked up mainly on account of Aluminium Bahrain (Alba) increased volume. This is expected to further increase in the coming years subsequent to the Line 6 expansion and other new export oriented units going on-stream in 2019, Besides the containerization of certain cargoes that were previously being exported as bulk outside of KBSP.

However, total general cargo (GC) throughput handled up to 2018 YTD has shown a 7 per cent decrease as compared to the same period last year. This decrease is mainly attributed to the decline in project cargo volumes which have tapered off by Q2 2018.

Stable steel prices have ensured a steady flow of export shipments in break-bulk form out of KBSP. Sulphur volumes have remained consistent during 2018. The demand for vehicles has increased resulting in increased roll on/roll off (RO-RO) movements to the extent of 6 per cent over the same period last year. Shipments related to the Bahrain Petroleum Company (Bapco) modernisation project are expected to commence in mid-2019 and are expected to last over a period of 18 months thereby creating a steady pipeline of project cargo, for 2019 -20.

Meanwhile, marine calls reduced by 10 per cent over 2017-2018 YTD November (from 886 to 796). However, the effective capacity of ships calling KBSP was enhanced, that is bigger ships replaced some of the smaller ones.

 

FOCUS ON FEEDER VESSELS

While APMT Bahrain continues to focus on its core service offerings within the Bahraini export/import segment, it expects to benefit from a number of internal and external initiatives, including continued discussions with feeder vessels to service the areas of Upper Gulf region, focusing mainly on the markets of Iraq and Kuwait, out of KBSP.

“Our efforts to boost transshipment could not be progressed due to combination of lack of feeder connectivity and cost pressure faced by shipping lines in view of the challenging environment that exists in the container shipping industry currently. While we continued our efforts to create awareness on the cost saving potential of using Bahrain for transipments through various means including road-shows in Asia and Middle East covering the Ocean Alliance carriers in 2018. We have also actively engaged with potential feeder operators to establish feeder connectivity with the upper gulf markets of Kuwait and Iraq with support from Economic Development Board and Ports & Maritime Affairs,” Hardiman says.

APM Terminals Bahrain: continuing to enhance its customer experience

APM Terminals Bahrain: continuing to enhance its customer experience

Giving reasons, he says: “One of the main reasons for this is that the container shipping industry is passing through challenging times as they continue to struggle with the supply demand gaps and stiff competition putting pressure on freight rates and thereby costs. This is resulting in even more tougher measures on reducing cost which in turn made advancing our transshipment efforts more difficult in 2018.”

Despite the above challenges, Ocean Alliance still retained Bahrain call in spite of major changes in their global deployment/network in end December 2018. “This is extremely critical component of our transshipment efforts which will continue into 2019,” he adds.

Meanwhile, it has had some success with Saudi Arabia transit cargo via Bahrain and expects to develop it further in 2019. “We have facilitated a fast track clearance and facilitation through KBSP as our differentiator which will enable us act as an alternative gateway to Saudi Arabia Eastern Province,” Hardiman reveals.

At the same time, APM Terminals Bahrain is working closely with project cargo importers for a number of key infrastructure projects in the Kingdom, including the Bapco modernisation, Alba Line 6 expansion, the light rail (metro) initiative, the new Bahrain-Saudi causeway, airport expansion and various new projects.

Together with the tourism authorities, APM Terminals Bahrain is also playing a key role in facilitating, maintaining and attracting international cruise lines to call at the port and including Bahrain as a destination on their itineraries.

APMT Bahrain plans to continue to enhance its customer experience through various initiatives as a result of direct feedback received from its customers through the customer satisfaction survey conducted in 2018.

“We are becoming more customer centric by establishing stronger relationships with our customers, which in turn will help us to better understand their needs and grow business with them. This will involve among others the design and implementation of robust commercial enablers to support our growth plan by offering value propositions to our land side customer segment,” Hardiman quips.

It is also working on offering Saudi Arabia- EP customers an alternative gateway for Saudi Arabia via KBSP through creating a fast-track channel and tailored supply chain solutions.
 

INNOVATIVE INITIATIVES

in 2018 APM Terminals Bahrain launched its online portal LIFT , which has been received well by the trade in Bahrain as it enables the customers to track and trace shipments, order services, book appointments and pay online.

“Within just a few months of implementation we have managed to onboard 50 per cent of our customers which is a clear indicator of its benefits to the users. We target to increase this to 75 per cent by end 2019 and eventually eliminate the need for customers to visit the terminal for any transactions,” says Hardiman.

It also enhanced its VGM (Verified Gross Mass) services through the installation of a new semi-automated weigh bridge to improve efficiencies and safety throughout the containers transportation cycle.

Additionally, APM Terminals Bahrain continues to make enhancements to the customer experience at its cruise facilities and areas adjacent to where passengers embark and disembark. The company has been working with various government agencies including the Bahrain Tourism and Exhibitions Authority (BTEA), Ports and Maritime Affairs (PMA), Directorate of Customs Sea port, Sea Port Police, National Security Agencies (NSA) and Nationality, Passports and Residence Affairs (NPRA) for the 2018-19 cruise season.

As part of the collaboration, steps have been taken to speed up processes such as: pre-approved gate passes for entry into the port, port shuttles to transport passengers to the gate, increased capacity for free WiFi at the cruise terminal, allocated gates for tourist buses as well as booths for tour operators and taxi services at the passenger terminal.

Giving his outlook for 2019, Hardiman says the port will continue to focus on developing preferred transhipment access to Upper Gulf states including Iraq and Kuwait and Eastern province of Saudi Arabia; offer  efficient and cost effective supply-chain solutions to land side customers in partnership with shipping lines;  prioritise employment, upskilling opportunities for nationals in close partnership with relevant government bodies and continue to work closely with local organisations in its corporate social responsibility initiatives;

With the current Bahrainisation rate at APM Terminals Bahrain reaching 64 per cent, they affirm their commitment to developing and creating opportunities for Bahraini talent pool. The company has signed a three-year collective bargaining agreement (CBA) with The General Union of Marine Port Labours. This agreement involved several benefits such as employee welfare and development.




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