Abu Dhabi Ports (ADP) has seen a significant increase in its cargo volumes and financial performance this year despite the impact of the Covid-19 pandemic.
Ross Thompson, chief strategy and growth officer at ADP, attributed this to its quick response to the peculiar set of circumstances it faced.
“Without doubt, Covid-19 changed the strategic focus of the company and it greatly accelerated some of our strategies that we had to bring forward significantly,” he told TradeWinds. “It has been a mixed bag in terms of different sectors.
“When Covid-19 hit, the first impacts were largely in things that were very GDP related. It affected trade patterns as governments and big importers adjusted their supply chain strategies to where they had to source key products that supply a nation on a daily basis, particularly strategic products such as pharmaceuticals and food. That became a big focal point.
“This led to spikes in the need for different logistics services and capabilities.
“What we saw was that during the initial impact, you had things like vehicles, ro-ro and containers impacted. Other parts of our business such as bulk raw materials saw no real impact.”
So how did the ports group — with four large ports in Abu Dhabi, a container terminal concession in Fujairah and a bauxite port it manages in Guinea — respond?
“What we saw was compensation in terms of our logistics activity and our investment in logistics,” Thompson said.
“By June, we had probably deployed more capital in terms of assets and new logistics services than we had previously planned to do in the next 12 months.
“We also saw our requirement for IT increase because human-to-human contact affectively stopped.
“Our investment in IT and digital went up significantly and we probably delivered in a six-week period what we had planned for an 18-month period.
“Those initiatives greatly offset any situation in earnings in other sectors. Overall, we were agile enough to be able to respond quickly to the crisis. We invested well — and strategically — and that has paid off. We are having a very good year in terms of both volumes and our financials.”
Thompson said there has been no adverse impact on ADP’s infrastructure expansion either.
Significant projects include expanding the container terminal at its flagship Khalifa Port to provide 9m teu of capacity by the end of 2021, together with building a large dry bulk and general cargo facility at the same port.
“We never slowed down one project,” he said. “These are all critical infrastructure for our growth and to support the trade in the region.”
Growing through partnerships
Thompson, who joined ADP in 2016 from UK port operator Peel Ports, credits its success to a business model that emphasises achieving growth through strong partnerships.
“If you look at our container growth, it is done by partnerships,” he said. “By bringing in strong global players and partnering with them, we accelerate our growth, our ambition and the value that we can offer.
“We have seen the partnership model as a great success story for us and for our customer base.”
ADP has also adopted a strategy of investing along the supply chains of its key customers.
One example Thompson cites is Emirates Global Aluminium (EGA), one of ADP’s largest customers. Under an agreement signed in 2019, ADP supplies logistics services to EGA globally.
EGA imports bauxite from Guinea through Khalifa Port for one of the largest single-site alumina refineries in the world.
Together with Louis Dreyfus, ADP owns and operates the barges and a transshipment vessel in Guinea’s Kamsar Port. ADP also owns and operates the relevant infrastructure at Khalifa Port.
More recently, it won the contract to transship iron ore for Emirates Steel Industries offshore from Khalifa Port, delivering it by barge through a channel to the manufacturer’s refinery.
This project started in November, when a newly converted transshipment vessel arrived off Khalifa Port.
Thompson said ADP’s strategy would always remain focused on the United Arab Emirates and surrounding region.
“There is still a huge amount of value opportunity within Abu Dhabi and the UAE that we will continue to invest in,” he said. “We will always look for good opportunities to unlock potential in our customers supply chains as they internationalise.”
