DP World has signed an acquisition for a 90%-stake in the Egyptian Red Sea port - Sokhna Port Development Co. for $670 million.
According to Egypt's Minister of Transport Mohamed Mansour, DP World is set to invest up to $1.3 billion on the port within two years.
Currently the port has an estimated handling capacity of some 1.2 million TEUs and is already hosting several projects including a $90-million livestock project and a $120-million sugar refinery development.
“DP World will contribute to marketing and (connecting) the Sokhna Port with international ports it operates, which total (42) terminals,” said Mansour.
New reports in September last year said that Deutsche Bank AG had been hired by Orascom Construction Industries to sell off Sokhna Port Development Co. for about $1 billion.
Orascom is the largest cement maker in the Middle East and North Africa while Sokhna port, located at the southern entrance of the Suez Canal, has four terminals handling containers, general cargo, fertilizer and bulk cargo.
According to Sokhna's chief executive officer Nassef Sawiris, “the company doesn't get enough attention within our group, and another company may be able to add more value.”
He added: “A port operator, or an infrastructure company, may better support its growth.”
This acquisition is DP World's official 'debut' in Egypt and comes amid a recent flurry of activity surrounding Egyptian facilities.
Alexandria International Container Terminals, part of the Hutchison Port Holdings (HPH) group of companies, had late last year officially opened two new container facilities at Egypt's ports of Alexandria and El Dekheila.
The two terminals were converted from general cargo facilities.
“HPH applauds the Egyptian government's commitment to develop the port of Alexandria into a world-class port facility to support the expanding industrial bases in the region,” said John Meredith, HPH group managing director.
“AICT will strengthen Egypt's position as a centre for trade in the Mediterranean Sea and serve as a gateway to international trade for the port of Alexandria,” he added.
Meanwhile, Suez Canal Container Terminal (SCCT) has signed a concession agreement with the Egyptian government for Phase 2 of the East Port Said port development, reports said.
Maersk unit APM Terminals BV. holds a 60% controlling stake in SCCT.
Phase 2 development is scheduled to double SCCT container handling capacity by 2011 to about 5.1 million twenty-foot equivalent units (TEUs) from the current figure of 2.55 million TEUs per year.
SCCT is at the new East Port Said port at the northern entrance to the Suez Canal. It was granted a 30-year concession by the Egyptian government in 1999.