Archive Page 2

29
Aug
11

DP World Shows How to Manage

Dubai based DP World is in a class to itself. The company operates 60 shipping terminals across 6 continents, of which container handling generates 80% of their revenue.  The first half of the year was a good one, profits up a whopping 36% over the same period a year ago. Things are looking bright for the mammoth company, despite further slowdowns in America and Europe. Developing nations continue to drive growth in shipping and demand world-wide.

Burj DubaiStanding Tall

Chief executive, Mohammed Sharaf, said: “DP World has had an excellent start to the year with gross volume growth 11 percent ahead of the prior period, improved revenue generation, a continued focus on cost management and improved terminal efficiencies resulting in EBITDA of $645 million and improved EBITDA margin ahead of expectations at 42.9 percent.’’

“Profit for the six month period before separately disclosed items was $281 million, close to profit levels last seen at our peak in 2008 as our container terminals have become more profitable following initiatives implemented as a result of the 2009 downturn.

“Our global portfolio, focused on both origin and destination cargo and in the emerging markets, is now more robust and better positioned to deliver profitable growth.’’

“We have continued to expand our global capacity, either through continued investment in new or existing terminals or through incremental investment focused on delivering greater efficiencies for our customers.

Smart Investing

According to The Day After Tomorrow: A Handbook on the Future of Economic Policy in the Developing World, almost half of global growth is coming from developing countries. As a group, it is projected that their economic size will surpass that of their developed peers in 2015.

“Developing countries have come to the global economy’s rescue,” said Otaviano Canuto, World Bank Vice President for Poverty Reduction and Economic Management (PREM),and co-editor of the book. “They are the new locomotives of growth which will move global growth forward while high-income countries remain stagnant.”

Further Projections

While the first half of the year was exceptionally strong, there are still some worries about just how much the looming economic slowdown in Europe and America will affect global demand, DP World CEO Sharaf doesn’t seem to be worried. “Historically the second half of the year has been stronger than the first half,’’ Sharaf said. “However, as we said in our update in July, there is uncertainty around the outlook for the global economy making it more challenging to forecast how global trade will develop in the second half of the year.

“The impact of this uncertainty has not, as yet, been reflected in the markets in which we operate and, with our focus on the more resilient emerging markets, we still expect to deliver full year results in line with expectations.”

The Future is Here

There’s more than one thing that a lot of the countries we have covered on the blog share. Aside from explosive growth, they also have very a low median age of population. There’s an interesting chart on Wikipedia that shows the median age of the countries of the world. Many of these Asian and African countries are climbing out of poverty on the backs of young, fresh, educated minds that are eager and willing to get a bigger piece of the pie for their families, both existing and planned.

The infrastructure that is being put in place now, for many of these nations will feed the growth of the populations. Economies will prosper. Trade will increase and demand will pull company profits along with it. Now is the time to look into the container industry. Pacific Tycoon is here to show you just how easy it can be. Let us guide you through the process.

Image: DubaiArchitecture

Source: DP World, BusinessJournal

26
Aug
11

European Forecast Gets Worse

Sometimes, it feels like when it rains, it pours. If you’re an investor, or even a citizen of Europe, you’re probably feeling like this now. Financial markets in Europe are getting rocked. Not only are they dealing with a possibly crippling debt situation, they’re also feeling the pain from the uncertainty from their neighbors across the Atlantic that are closely approaching a dreaded double dip recession. Europe and America are tied pretty tight and both of them seem to be stuck in a shaking room getting bounced from one side to the next. The earthquake on America’s east coast Tuesday could be a foretelling event of more disaster to come.

Campfire

Asia Demand is Another Problem

In a report from Russia’s Port News, LNG (Liquid Natural Gas) is in high demand in Asia as more and more countries expand. LNG from Europe is being shipped to Asia where it is bringing in higher prices. Most notably South Korea and Japan are two of the biggest consumers. South Korea just inked a $84 billion deal and Japan is a heavy importer as well, especially after the disaster that caused the meltdown of its plant earlier this year.

“Asian demand could easily take virtually all the LNG in the market, leaving little over for liquid markets like the UK and the Netherlands,” said independent LNG analyst Andy Flower.

South Korea and Japan are the two largest importers but increased demand in China and other smaller Asian nations willing to pay oil-linked prices is set to tighten the market as production struggles to keep up with supply.

Higher Prices for Europeans

“This looks to be a scenario where northwest Europe could find itself short of LNG, which will force prices up to attract what LNG is available and/or bring in more pipeline gas from Russia,” Flower said.

Japan’s LNG imports hit a record high above 7 million tonnes in July, up from 5.9 million in July 2010, according to Waterborne energy analysts, which monitors global LNG flows.

For all Asian importers, Nigerian supply to Asia jumped by more than 10 times to 819,000 in July this year from 73,000 in July 2010, according to Waterborne.

Less LNG could help push prices higher next winter in big, heavily traded markets such as the UK, analysts say, adding that their prices have the potential to reach parity with oil-indexed pipeline gas coming from Russia and Norway.

Troubles are Apparent

Investors vote with their dollars and therefore the most telling signs of optimism or pessimism are reflected in the stock markets. Investors in Europe are voicing their fears. The FTSE 100 (UK’s benchmark) is down 13.44%, the DAX (Germany’s benchmark) is down 18.72%, and the CAC 40 (the French benchmark) is down 19.52% for the year. Investors are scared and when the winter comes, it looks like they’ll be shelling out more money to keep warm, too.

Asia is the train that is roaring through the world right now and pulling the developing nations along with it. It’s a tough task, but consumer demand and building are driving imports and keeping the rest of the world just above water. Contact Pacific Tycoon to see how you can get involved in this phenomenon.

Image: AllPosters

Source: PortNews

25
Aug
11

Rotterdam Port Sees Huge Container Increase

Some are worried about the effects on global trade that the current European debt crisis and the American economy, which is teetering on the brink of a renewed recession, will have.  There are many reasons to be worried. The banks and governments in Europe have themselves in bind. Investors are fleeing the stock markets and fleeing toward safer investments like gold and other precious metals.

World Port Center, Wilhelminapier, RotterdamLooking Down on What’s Going on

Despite the worries that accompany the mess in the western world right now, there are many places in Asia that are booming. The largest port in Europe can confirm that.

Last week, the Port of Rotterdam posted what it said was a “good first half”. The first half of this year has brought with it, container traffic increases of 12.3% compared to the 1st half of 2010, to 61.8 Mt, and 9.7% in unit terms to 5.954M TEU.

Where’s the Growth Coming From?

We’ll give you one guess. “Container throughput remains above expectations,” said Rotterdam port authority, “thanks to new services especially to and from the Far East and South America, significant increases in transhipment, especially in Russia, and a steady recovery of intra-European traffic, with the United Kingdom and Ireland being the most important markets.”

Hans Smits CEO of the Port of Rotterdam had this to add:  ‘On the whole, throughput has maintained the high level of 2010. This also applies to investments from both the Port of Rotterdam Authority and companies. The growth in total throughput was hindered mainly by the loss in handling of oil products, which was very strong in the first quarter of 2010. Maintenance work to refineries was also relatively high. The 7 million tonnes decrease in the oil sector was almost entirely compensated by the more than double-digit growth of containers.”

Asian Benefits

From the growth in Rotterdam to the increase in milk consumption that is driving trade with New Zealand, Asia is taking over as the world’s leading consumer. Hiccups in the western world economies used to severely hinder trade. There’s no doubt that American consumption, which accounts for 70% of their GDP, has a huge influence on the world economies, yet the dependence of the other world economies on that consumption is getting less and less.

Developing nations in Asia, Africa, and the Middle East are quickly adding infrastructure and jobs. These investments are fueling consumer demand for goods and services that they envy in their western counterparts. Last year for example, Apple sold 47.5 million iPhones. 80% of those sales came from overseas. The average salary monthly salary in China is $273.

Despite the huge price tag of the iPhone and other consumer goods that consumers crave, they’re wiling to part with the cash to show off the fact that they own one. Materialism is a funny beast and it can grab even the most cash strapped individual and force them to do things they normally wouldn’t just to own that item that their friends have.

With development of many of the Asian countries just beginning, there doesn’t seem to be a slowdown in this area of the world any time soon. Let Pacific Tycoon show you how you can benefit from this growth.

Image: Dick Korevaar, Panoramio

Source: WorldCargoNews

24
Aug
11

New Zealand Growth Fueled by Asian Demand

The growth in Asia is a hot topic. It has been for years now. It’s evident everywhere, especially when you travel. More and more Asians are becoming affluent and buying designer clothes, expensive cars, and traveling to other countries. The amount of money being poured into these economies is staggering, from the investments in ports and infrastructure to the foreign businesses that are moving in and taking advantage of lower cost labor or chain stores and international brands that are coming in to grab a piece of the consumer action.

Tauranga, NZ

I read this past weekend a report of the New Zealand port of Tauranga. The first report that caught my eye was “Tauranga port sees record profit from cargo growth “. The port announced profits of 17% on the year ending June 30th. 

What’s driving the growth?

Trade volumes were up 12 per cent to 15.4 million tonnes, while container traffic increased 15 per cent to 590,506 20ft equivalent units (TEU).

Exports of logs were up 14.5 per cent to 4.4 million tonnes, kiwifruit was up 3.8 per cent to 757,000 tonnes and dairy was up 4.6 per cent to 588,000 tonnes.

“This trade included 78 per cent more international volume and more than three times the export volume of Port of Tauranga’s nearest competitor.” said John Parker, Chairman of the port. He also added”Despite the patchy economic recovery, we have enjoyed strong growth in trade volumes.”

Chief executive Mark Cairns said he was proud of the result. “I think it was a cracker year across all parts of the business and positive about the coming year, in particular around the container terminal side of the business.”

What does this have to do with Asia?

At the bottom of each of the articles I read was a small piece about the influence that Asian economies are having on the export business of New Zealand and neighboring exporters. And then there is this Bloomberg article, which reports that Chinese imports of New Zealand milk has jumped 500% since 2008.

Asian consumers are demanding more protein as incomes and nutrition levels rise, said Con Williams, rural economist at ANZ National Bank Ltd.

Other countries that recorded the largest growth in imports include India and Sudan. India’s imports of New Zealand dairy products more than doubled to NZ$162 million last year, according to government data. The value of Sudan imports jumped to NZ$114 million from NZ$39 million in 2008.

20 years ago the average westerner walking down the street towered over his Asian counter-parts. That has changed drastically in the last 20 years. One of the first beneficiaries of that change was Taiwan. Factories in Taiwan sprung up quickly 20 years ago and many have left the island in search of cheaper labor in China, but the effects are long-lasting.

20 years ago, what some people refer to as a healthy child with a little “baby fat” was an anomaly there. Those days are gone. Friends of mine are teachers in Taiwan and in a visit there last year, I witnessed the explosion first hand. A visit to a high school there showed me this unexpected surprise. Many of the kids there towered over me.

Higher standards of living

In his report in April of this year on the International Monetary Funds Economic Forum, economist Anoop Singh, Director of the IMF’s Asia and Pacific Department said, “Economic growth averaged 8.3 percent across the region in 2010, on the back of both strong exports and domestic demand. Asian exports, especially of high-tech products, have benefitted from higher global investment, and domestic consumption and investment from rising employment, abundant credit, and supportive macroeconomic policies.”

In regards to future growth, Mr. Singh had this to add, “Growth is likely to remain robust, averaging 7 percent in both 2011 and 2012 (compared to 4.5 percent global growth). China and India will remain in the lead, and their growth will increasingly benefit other economies in the region.”

At Pacific Tycoon, we’re located in the heart of Asia, serving the our clients and giving them a managed solution to their investable income. By owning containers and leasing them out to the companies that supply this region with the goods they are demanding. With the turbulence in the financial markets, many investors are looking for safer, more predictable ways to make money. Contact Pacific Tycoon and we’ll show you how you can begin earning 12% on your money.

Image: GoogleMaps

Source: NZHerald, CargoNewsAsia, SunLive, Bloomberg

23
Aug
11

Jordan Boasts a Robust Port

It seems like this is Middle East week on the P.T. Blog. Yesterday we reported on the boom in business going on in Oman. Today we shift our focus north-west, up the Red Sea to a corner of the Middle East, also called Levant ( which comprises Syria, Lebanon, Jordan, Israel, and the Palestinian territories). That’s a lot of ground to cover, but one port’s location puts it in prime real estate to just that and more.

Jordan Flag

Jordan’s Solid Port

Aqaba Port is becoming the docking place of choice for all shipping lines wishing to move cargo not just through Jordan but through the whole of the Levant and Iraq. With the rebuilding of Iraq under way, that’s no small task and the Port of Aqaba is sparing no expense making sure they get it right from the beginning.

The port was founded back in 2004 as part of a management contract between Aqaba Development Corporation (ADC) and APM Terminals Jordan. The concession agreement took place in September 2006 when a further 25-year joint development agreement was signed. Under the agreement, APM Terminals manages, operates and markets ACT and is responsible for the execution of the company’s ‘masterplan’. Over the past five years, the terminal has become a main liner facility, operating to international standards and playing a crucial role in the Jordanian economy.

Growth is Coming Fast

Back in 2006 the port’s gantry crane (cranes used to load shipping containers on ships) was a paltry 7 or 8 moves er crane/hour. That rate has jumped to 30 moves/crane/hour this year. Because if it’s location growth is coming fast.  Jordan and Aqaba specifically is located in a perfect spot to receive containers from most parts of the world that are destined for Jordan and the wider Middle East.

It is connected on weekly services from Africa, Europe, the Far East and the Indian subcontinent with a number of the world’s top shipping lines. Situated at the crossroads of 3 continents and 4 countries, Aqaba enjoys an attractive location in the heart of the Levant and caters to more than fifteen of the world’s top shipping lines.

Adding to the benefits is the fact that the water around the port is deep and therefore dredging is not a concern that other ports have the added expense of tackling.

A productive and profitable port take more than a blessed real estate and that’s another area that the Jordanian port shines in. Communications manager Ihab Alrawashdeh reiterates the other strengths. “We have excellent land transport connections for the rest of Jordan and into the Levant and Iraq, particularly in terms of road infrastructure,” in addition, Alrawashdeh said, “We are also directly connected to the rest of the logistics support areas such as the airport, so it is easy to deliver sea freight there, or bring air freight here. This is coupled with our international standards of operations and productivity.”

More Expansion

As of this year Phase 1 of the Port Project is completed and the next phase which will almost double the capacity of its berths to 1000 meters.

Aside from the investments in physical space, machinery, and services they are also pumping money into the most high-tech equipment. Productivity is key and to realize the master plan of being the leader in the region even small gains can put them ahead of the competition.

“When it comes to new technology, at the end of the day we are a port and there are only so many places where we can be cutting-edge. However, when those opportunities arise, we seize them. Our most recent investment has been in six new RTGs which are not only as advanced as possible in terms of technical capabilities, but they are also ‘eco-cranes’. This means that they emit much less CO2 than standard RTGs, but they still have very high productivity levels.” added Alrawashdeh.

At the End of the Day

Iraq is rebuilding after a long war and the Middle East is growing at a healthy rate. The Port of Aqaba is just the beginning of a long expansion of the potential in this region and the people who manage the port see this.  “Our final aim is for ACT to be a key transit hub for the Levant, especially Iraq,” he says. “This means that we are looking to double our total throughput and plans are already in place to achieve that. With our master plan and commercial strategy, I believe that this is something we will achieve within the next five years.”

Image: VirtualTourist

Source: ACT, BusinessExcellence, AqabaZone

22
Aug
11

Investment is Paying off in Oman

Just a few short years ago, the Port of Sohar was an ambitious project that was fighting a lot of competition in the Middle Eastern shipping business. After huge growth year after year, it’s starting to turn more heads than a cat walking model.

Oman

Official Directive

In line with the royal directives of His Majesty the Sultan, Port Sultan Qaboos will be converted from a commercial port to a full-fledged tourist port. During the implementation of this project, the Port of Sohar is proposed to receive additional container throughput of 350,000 TEUs, according to Sohar Industrial Port Company – the landlord-operator of the industrial port, reported the Times of Oman.

Facts and figures

In 2007 the port handled just 6,290 twenty-foot equivalent units. This year they are projected to handle of 100,000. With the addition of the traffic that will be rerouted from the Port Sultan Qaboos, that number is expected to jump to over 500,000 in the next year and a half.

The Port of Sohar is a 50:50 joint venture between the Government of Oman and the Port of Rotterdam and located 220km northwest of the capital Muscat. The industrial port is a deep-sea port and has grown tremendously in size and importance in only seven years since its start in 2004.

First Class

Like most things done, in the middle east, they’re done high-class and tech proficient. The Port of Sohar is no different. The ports development was initiated back in 1999 as part of the Oman Vision 2020. Because of the attractive position in respect to the Arabian Sea and the Indian Ocean, the initiative is seen as a primary attribute to spreading trade throughout both the country and boosting its clout with neighboring ports and countries.

On Thursday of last week it was reported in the Oman Daily Observer that the Sohar Industrial Port Company (SIPC), signed a deal for the establishment of “Port City”. The new $15.5 million project will be located in front of the port secured area, the complex will provide members of the user community, notably shipping agencies, freight forwarders, and other port and maritime service providers with a suitable and fully equipped base from which to conduct their business within Gateway Sohar.

“Any port attracts many different users and third parties, such as shipping agents, freight forwarders, and so on, as well as government agencies that handle customs, health, quarantine services, and so on. We believe a complex like this is a key requirement within the port area to serve these various users. It will be a hugely successful venture because it provides a comprehensive range of services and amenities, including shopping, fuel, and other services. This combination of services is a good factor in attracting parties, who are currently scattered or not present in Sohar, to take up space in this complex. We’d like to encourage specifically shipping and cargo handling agents, among others, to have their offices at Port City.” said Jamal T Aziz, CEO of Freezone Sohar.

Construction work on the project is expected to commence by December 1, 2011, with Phase 1 due to be commissioned by 2012-end. Phases 2 and 3 will be brought into operation by the end of 2014.

Phase 1 planned to be a “One Stop Service Building” which will house the front offices of relevant government departments and shipping agencies, allowing efficient document handling for the continuously increasing marine activities in Port of Sohar.

Along with the service building, phase one will also include a Superstation- a new concept filling station with a range of facilities for both trucks and drivers. It will feature a service station for trucks, coffee shop and shower facilities for drivers. This part of the project will be supervised by Oman Oil Marketing Company (omanoil).

J.O.B.S.

Subsequent phases of the project will offer space for businesses, such as banks, local retail and even a supermarket. With its high level of ambience and amenities, Port City will emerge as a landmark within the Port of Sohar, said Jamal Aziz, adding that the project is also expected to create a large number of jobs for local Omanis.

The port has obviously done some good planning. They are taking advantage of the increase in business by catering to their clients. In doing so, they’re creating jobs, making money, and keeping everyone happy and busy. An idle mind is the devils playground. It looks as though there’s no such thing at the Port of Sohar. Things there are going to be there busy for quite some time.

More jobs equal more money. More money equals more spending. More spending equals more goods and services coming in and going out of the country. Contact Pacific Tycoon. Let us show you how you can be part of this growth in Oman and the rest of Asia through container ownership.

Image:CTGroupTravel

Source: CargoNewsAsia, TimesOfOman, PortOfSohar, OmanDailyObserver, OmanInfo

19
Aug
11

India Gets Serious About Inflation

Demand is a funny creature. A healthy dose of it keeps the gears of the economy rolling smooth. Too much of it, drives up the cost of goods and services and can grind the wheels to a halt. Not enough demand and the same thing happens. Moderation is the key. It’s hard enough moderating your own personal vices yet alone those 1.2 billion people, in the world’s second most populous country. Despite the difficulties that come with managing that moderation, India is tackling the problem with a new round of planned investments in its port to the tune of US$60 billion dollars.

The Social Network

A Trillion is Cool!

In a line made famous by the movie based on Facebook, one of the lead characters told the young founder that a million isn’t cool. A billion is cool. If that’s true then the planned investment in Indian ports and other transportation outlets well surpasses that.

The $60 billion dollar investment in the ports is part of Prime Minister Manmohan Singh’s planned $1 trillion revamp of choked transport and power networks to achieve faster expansion.

The initiative must transcend a history of insufficient investment, which has left the world’s most populous democracy trailing a Chinese economy now more than three times larger.

“If there isn’t enough capacity, you lose time and it adds to cost,” said Leif Eskesen, an economist at HSBC Holdings Plc.

Companies Want Action

Thermax’s, a power equipment manufacturer, managing director M. S. Unnikrishnan says “It takes 45 days transportation for incoming cargo for me and similar time when I send it to my customers overseas.” He was also quoted as saying,  “The Chinese can possibly do it in seven days.”

This adds costs and reduces efficiency and India is taking action. The Indian government is relying partly on investment by companies such as DP World Ltd. and AP Moller-Maersk to lift capability at ports to 3.1 billion tonne by 2020 from 963 million tonne in 2010.

After implementation of the building this will enable greater imports of consumer good like, electronics, raw materials, and oil, which in turn dampens inflation by better feeding consumer demand. India has 13 major ports overseen by the central government and 187 smaller harbors that account for 90% of exports by volume. India imports more than it exports and thus had a trade deficit of almost $105 billion in the last fiscal year.

They Keep Coming

At 1.2 billion people and growing, India is the second most populous country in the world and that figure is only getting bigger. They are projected to capture the title of most populous, overtaking China by 2025. In reality, that’s not that far into the future and arrives just after the total of the ports investment money will be put into action by 2020. Perfect timing.

In the meantime, Pacific Tycoon is here to help you wade through the waters of container ownership and leasing that puts your money to work by leasing your containers to the world’s largest companies that are shipping to India, China and other fast growing economies in Asia. With the world financial markets and developed countries are suffering due to mismanaged debt, demand is Asia is pumping money into the hands of our container owners. Contact us and let us show you how easy a direct investment into the Asian economies can be.

Image: TheSocialNetwork

Source: HellenicShipping, Wikipedia




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