Dubai will bring its legendary “city of merchants” tag to the Far East through the acquisition of CSX World Terminals (CSXWT) by Dubai International Ports (DPI). Subject to customary adjustments, DPI will pick up the ports business from the US corporation for $1.15 billion and gain a huge foothold in the region that it has long desired. The transaction is expected to go through in the first quarter of 2005 and upon completion DPI will acquire CSX’s entire international terminal business, as the group refocuses its activities on its US railroad portfolio. Under the agreement, its acquisition consists of terminal operations in Hong Kong, China, Korea, Australia, the Dominican Republic, Venezuela and Germany. This results in the group adding nine terminals with 24 berths to it’s global portfolio, which will result in the Middle Eastern firm immediately becoming one of the top six global port operators. Presently the group has interests in and manages container terminals in Jeddah, Saudi Arabia, Visakhaptnam and Cochin in India, Port Kalang in Malaysia, the port of Constantza in Romania, as well as its domestic operations. In addition to also running the ports in the East African enclave of Djibouti, it also manages its international airport. According to Sultan Ahmed Bin Sulayem, executive chairman of Dubai Ports, its acquisition of CSXWT grants the company access to the new growth markets of Asia and Latin America, and will allow it to better participate in the current and long-term growth potential of the global transportation industry. “We are particularly excited about the growth prospects of the ports and logistics in North Asia,” says the sultan. “The growth of China is hardly news to anyone and we see ourselves as part of that growth.” In Hong Kong, DPI takes over CSX’s interests in container terminal three (CT3), container terminal eight (CT8) and the Kwai Chung-based ATL, the market leading logistics operator. While across the border and into Korea, it acquires CSXWT’s port operations in Tianjin, Yantai and the soon to be completed port project in Busan, plus mainland logistics companies Shanghai JIFA Logistics and ATL Yantian. When the transaction is completed, DPI projects that the bulk of the company’s revenues will emanate from its newly snagged North Asian business. In its own backyard, the company runs its flagship operations Jebel Ali and Port Rashid, which comprise of the world’s 11th largest port by TEU (twenty foot containers).On the back of China’s dominated imports and exports DPI’s Dubai facilities are expected to handle 7.8 million TEU by the end of the year with capacity expected to rise to around 20 million TEU in the next ten years. Upon divesting itself international from international terminal business, Andrew Fogarty, President and CEO of CSX World Terminals claims that the transaction was a win-win situation for both parties and the move would allow CSX to focus on its core business and “was a necessary step to create value for its shareholder. DPI’s acquisition follows a recent flurry operational activity at the Hong Kong ports. Late last month Singapore’s PSA fulfilled a long-term desire to gain a strategic foothold at the world’s busiest port by purchasing a 57% stake in the Asia Container Terminal (ACT) from Sun Hung Kai Properties.
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