DP World warns of challenging times for global trade

DP World has warned of difficult times ahead for global trade after growth in container volumes handled by its global network of ports slowed sharply last year despite improved activity in Europe and the United Arab Emirates.

The volume of containers handled by the operator’s ports rose 2.4% on a comparable basis to 61.7 million 20-foot units in the year to end-December from the previous year, DP World said on Monday. In 2014, DP World’s container volumes increased by 8%.

The company, one of the world’s biggest ports operators with around 70 marine terminals across six continents, said trading conditions are set to remain “challenging.”

“The second half of 2015 was difficult for global trade operators, as various economic headwinds including currency weakness and lower commodity prices adversely impacted trade growth,” said DP World Chairman Sultan Ahmed Bin Sulayem. 

DP World’s sober outlook comes as the slowdown in China’s economy has contributed to sharp drops in prices for oil and other commodities and reduced demand for shipping. The Baltic Dry Bulk Index, sometimes viewed as a proxy for global trade, has hit a series of record lows since the beginning of the year.

Despite the near-term macroeconomic uncertainties, Sulayem said DP World would continue to invest across the globe.

DP World is set to add capacity in the Netherlands, India, Canada, Turkey, the United Kingdom and its Abu Dhabi terminal this year.

The group recently formed a joint venture with the state-owned Russian Direct Investment Fund to invest as much as $2 billion into Russia.

The group’s expansion comes amid continuing strong investor demand for ports and related infrastructure. Chinese shipping and port giant China Cosco Holdings Co. plans to buy a 67% stake in Greece’s main port of Piraeus. Canada’s Brookfield Infastructure Partners is in a takeover fight with Australian investment group Qube Holdings Ltd. for Australia’s port-and-rail operator Asciano Ltd.

DP World also said Sulayem has taken on the role of chief executive with immediate effect, after long-serving former CEO Mohammed Sharaf retired late last month.

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