How APM Terminals is impacting on Nigeria’s economy

Moín Container Terminal hits one million TEUs

PHOTO CREDIT: APM Terminals

 

At the conclusion of Nigeria’s port reforms and concession of 2006, APM Terminals, the world-renowned multinational terminal operator, won the concession for the container terminal at the Lagos Ports Complex, Apapa. Nigeria had embarked on the concession of port terminals to private investors in a bid to improve port services through private sector investment and expertise, and to free government from huge financial investments in the port sector.

With APM Terminals, these government objectives have been largely realized –and much more. Since it started operating the terminal, APM Terminals has leveraged more than its century of industry experience of designing and building high-quality container terminals to transform the 55-hectare and 1005m quay length facility.

Today, APM Terminals has improved the capacity of the container terminal from a mere 200,000 TEU per annum in 2006 to 1.2million TEUs.

The concessionaire has transformed the terminal into a modern and efficient terminal, resulting in more capacity for trade and higher vessel productivity. This has made shipping lines deploy bigger vessels (e.g. WAFMAX vessels), and increase service frequency to the Apapa port. The economy of scale has enabled shipping lines to offer Nigerian shippers competitive rates, thereby increasing Nigeria’s foreign trade, both in terms of volume and value, helping to boost the country’s GDP and employment opportunities.

As part of its commitment to continuous upgrade of the terminal, improvement of services and in response to increasing container volumes at the port, APM Terminals has embarked on additional USD80 million (N33.6billion) investment.  Recently, the foremost terminal operator commissioned two new multi-million dollars state-of-the-art Mobile Harbor Cranes (MHCs) to boost service delivery. The latest USD80 million (N33.6billion) investment for the year 2020-2021 brings the total investment by the company in Apapa since 2006 to USD438million (about N184billion) – the highest by any private terminal operator in Nigeria.

Commissioning the new harbor cranes, APM Terminals’ Head of Terminals, Africa and Middle East Region, Mr. David Skov, said before now, the company had invested USD358million (N150.36billion) in port infrastructure development, information technology upgrades and modern cargo handling equipment to improve both quayside and landside operations.

“The additional investment we are making is to handle the increased trade volumes into Nigeria. Trade in Nigeria is growing due to the many favorable efforts and policies of the Federal Government of Nigeria including but not limited to the policy on ease of doing business; stabilization of foreign exchange; closure of the land borders which has increased the use of our sea ports; and diversification of the economy,” he said.

Skov said with the acquisition of the new cranes, the terminal now operates with a total of 10 Mobile Harbour Cranes; 23 Rubber-Tyred Gantry Cranes; six Empty Handlers; 48 specialized Truck Terminals, six Reach Stackers and 11 Forklifts.

The Managing Director of Nigerian Ports Authority (NPA), Hadiza Bala Usman, who was part of the commissioning event, commended APM Terminals for the additional investments and acquisition of the new cranes, observing that the ports were concessioned by the Federal Government to improve port efficiency and free government resources for other developmental purposes. She said cargo volumes at the port have witnessed a steady rise in recent time due to favourable government policies, urging terminal operators to respond accordingly.

An analysis of APM Terminals Apapa financials from 2013–2016 shows significant investments, and that 50 per cent of its turnover was funneled back to the Nigerian economy through employees, suppliers, financiers, and tax payments.

By so doing, APM Terminals has made significant impact on trade, jobs, and GDP in Nigeria, due to its contribution in improving Nigeria’s connectivity to global trade.

Aside all these, Nigeria has continued to benefit immensely from the operation of APM Terminals in the country. In the current fight against the coronavirus pandemic, the port terminal operator has proven to be dependable ally in the fierce COVID-19 battle. The company has contributed N150million into the Federal Government’s COVID-19 Relief Fund Account created by the Central Bank of Nigeria (CBN). This is after contributing $200,000 (over N80million) into the United Nations Basket Fund for the fight against the pandemic in Nigeria.

APM Terminals also recently chartered a flight to deliver vital health supplies, acquired under the auspices of the UN, to Nigeria to support the battle against the COVID-19 pandemic. The supplies, made up of 10,000 test kits, 15 oxygen concentrators, and various types of personal protective equipment (PPE), vaccines, IEHK/PEP kits, and other vital health supplies, were meant support the Nigerian Government’s COVID-19 Response Plan and UNICEF’s work with children and families in Nigeria.

The supplies will also support Nigeria, through the National Center for Disease Control (NCDC), to prevent and respond to the COVID-19 pandemic in affected states across the country.

In addition to these, the leading port terminal operator also committed another N25million to community awareness and enlightenment through radio, social media and fliers to sensitize its host community, Apapa, and the general public on how to control the spread of the virus. It also donated nose masks; disposable protective coveralls; hand sanitizers; protective goggles and hand gloves to THE Nigerian Ports Authority (NPA) towards curtailing the pandemic at the port.

APM Terminals has also been in the forefront of the compliance with the directives of the Federal Government as regards continued operation of the ports. The terminal operator has maintained full operation in line with the directive of President Muhammadu Buhari to keep the ports open as a critical infrastructure, despite the raging battle against coronavirus. This it has done in full observance of the safety guidelines issued by the Nigeria Centre for Disease Control (NCDC) and the World Health Organization (WHO).

In fact, there is no gainsaying that APM Terminals has impacted quite positively on Nigeria’s economy, just as it has continued to distinguish itself as a responsible corporate citizen.

An impact assessment study conducted by a consulting firm, Quantifying Business Impacts on Society (QBIS) in 2018, shows that the operation of APM Terminals in Nigeria created a total turnover of around USD610 million (N186.05 billion) per year to the Nigerian economy from 2013 to 2016.

The study titled “Nigerian Trade Stimulator – How APM Terminals in Nigeria have impacted trade, creating jobs and ensuring a sustainable business environment”, was conducted by Mette Dalgliesh Olsen and Thomas Westergaard-Kabelmann.

According to the firm, the main objective of the study was to assess the socio-economic impacts and value-addition of APM Terminals’ operations in Africa’s most populous nation and largest economy. The study focused on APM Terminals’ investments in Nigeria from 2010 to 2016.

The authors disclosed: “The study finds that the direct turnover created by APM Terminals from 2013 to 2016 has created around USD44 million (N13.42 billion) of annual turnover in companies supplying goods and services to APM Terminals and around USD352 million (N107.36 billion) of annual turnover in companies supplying consumption goods to the employees of APM Terminals and its suppliers.

“This means that APM Terminals’ business activities have created a total turnover of around USD610 million ((N186.05 billion) per year to the Nigerian economy in the period from 2013 to 2016.”

The study also stated that APM Terminals has supported about 35,000 direct, indirect and induced jobs per year in Nigeria from 2013 to 2016.

“In the period 2013 to 2016, APM Terminals employed an average of 1,196 FTEs (full time employees) per year. In the same period, APM Terminals further supported another nearly 4,800 jobs per year in the companies supplying goods and services to APM Terminals and another around 29,000 jobs per year when the people hired by APM Terminals or its suppliers spend their salaries on private consumption,” the report further said.

According to the study, the operation of APM Terminals has impacted positively on trade in Nigeria, leading to an increase in the country’s manufactured export by up to 15%, corresponding to around USD0.5 billion (N152.5 billion) in the period from 2006 to 2009.

The report indicates increasing Foreign Direct Investment impact in the country and increased non-oil exports, in line with the ambition of the Federal Government.

“With these increases in production, said the report, “come increases in number of jobs and salaries which in turn increases households’ income and leads to increased private consumption.

“This increased private consumption leads to a further increase in demand from the sectors delivering goods and services for private consumption, which in turn again increase employment and salaries and so forth, also referred to as induced effects,” the study stated.

With its team of 22,000 industry professionals operating a network of 78 terminals globally and handling around 250 vessel calls per day and 40million TEUs per year, it is expected that APM Terminals will continue to leverage on its experience and expertise to impact positively on the nation’s economy in many more years to come.