DP World, the global ports operator with terminals from Vancouver to Hong Kong, is bullish on its growth outlook and prospects for global trade despite ongoing macroeconomic and geopolitical challenges.
The Dubai-based company performed “very well” year-to-date and expects continued growth, citing the geographic diversity of its markets across six continents to help it weather challenges from trade wars to geopolitical tensions, Mohammed Al Muallem, DP World’s chief executive and managing director said in an interview in Dubai.
“If you look at the global climate at the moment, we’ve done very well … we’re very satisfied with what we’ve achieved so far under this very challenging economic environment,” Mr Al Muallem told The National on Sunday. “We’re confident, as far as DP World is concerned, that because of our geographical spread that we will continue to perform to our satisfaction.”
Threats from an escalating trade war between the US and China, the world’s two biggest economies, are weighing on businesses and clouding the outlook for future growth. Geopolitical friction in the Middle East, in particular, where tensions between the US and Iran, has prompted a US-led coalition of countries, known as the International Maritime Security Construct, to commit troops, planes and ships to accompany and track vessels passing through the Arabian Gulf. The ongoing saga of the UK’s exit from the European Union has also fuelled uncertainty and hurt business confidence.
The world’s largest ports operator, which runs facilities in 40 countries, remains upbeat about its performance as weaker growth in some markets is mitigated by stronger performance in other regions within its global portfolio.
“Because we’re spread around the world and we’re in those strategic locations within major trade lanes, that makes us perform well,” Mr Al Muallem said, pointing to economic growth in India and African countries.
The International Monetary Fund has forecast the global economy will grow 3 per cent this year, its slowest expansion since the 2008 global financial crisis, as a result of protectionist policies and increased uncertainty stemming from trade and geopolitical tensions that have strained emerging market economies
“I think challenges are there, we have to look at different areas in a different way, but as a company we’re focused and we’re very optimistic that trade will continue to grow around the world,” Mr Al Muallem said.
The executive said DP World has not seen an impact from the US-China trade tensions on its operations, pointing to China’s economic growth at a “still healthy” rate of 6 per cent in the third quarter of 2019.
DP World, which operates the London Gateway container terminal on the River Thames, said it is adding capacity at the port because it expects continued growth despite Brexit.
“Yes, there are uncertainties in terms of the UK economy itself, this is only momentary, things will be resolved either way whichever way it goes,” he said. “But we, as a port, will continue to grow.”
Dubai-listed DP World issued $1 billion (Dh3.67bn) in Islamic and conventional sukuk, listed on the Nasdaq Dubai bourse on September 30, which Mr Al Muallem said will be used to “make the company grow further and more stronger”, but declined to elaborate on details.
The ports operator is considering further acquisitions in the logistics and supply chain sectors to strengthen its position as a “trade enabler”, he said, declining to reveal a timeline for any potential deal or location of possible acquisition target.
DP World continues to see further potential for growth in Africa and is still studying the US market for possible acquisitions, he said.
In July, DP World acquired Topaz Energy and Marine, marking its first foray into the oil and gas sector. The company has been on an investment spree since 2018 as its growth strategy evolves to include the wider logistics supply chain. It snapped up UK-based transport and logistics company P&O Ferries, Indian rail logistics company Kribhco Infrastructure and Chile ports operator Puertos y Logistica.