APM Terminals invests $350m in port infrastructure in 9yrs
Nine years into its concession term, APM Terminals, the Danish terminal operator in charge of cargo handling operations at the West African busiest container terminal, Apapa Container Terminal, said it has put in over $350 million worth of investment in the development of infrastructure at its terminal in Lagos.
The scope of investment include yard expansion; expansion of berth from 10.5 to 13.5 meters depth; purchasing of container handling equipment and linking of the terminal’s rail track with the National Rail Network.
Others include establishment of a world-class training center and crane simulation facility for its employees; training of crane operators from across the terminals global network. APM Terminals’ investment in information technology also brought significant improvement in invoicing and account tracking as well as improving cash flow and financial performance of the company.
“With this investment in infrastructure and human capital, we are pleased to say that APM Terminals Apapa is one of the most modern and efficient terminals in Africa. The infrastructure investments made at APM Terminals Apapa in preparedness to receive larger vessels, have made it a more competitive port to call, which in turn increases employment opportunities and economic growth at the port,” said David Skov, country manager of APM Terminals Nigeria at the just concluded Nigeria Maritime Expo (NIMAREX) 2015.
Skov, who presented a paper titled, ‘Building Economic Capacity through Maritime Infrastructure Development –The APM Terminals Perspective’, stated that it is imperative that Nigeria continues to build the necessary maritime infrastructure required to handle the growth of international trade.
Continuing, he stated: “There is need for modern container ports, cranes, and expansion of existing facilities to accommodate larger vessels so as to increase container volumes. Investment in more capacity and higher productivity induces shipping lines to respond with more services, more port calls per service and bigger vessels, which in turn increase liner connectivity.”
Competitiveness of port, the APMT boss pointed out, is usually measured by the Liner Shipping Connectivity Index (LSCI), which is the ability to move a cargo from one place to another with due cost, due time and due services.
A study conducted by the Maersk Group reveals that increase in liner shipping connectivity increases imports and reduces trade cost. Before port concession, Nigeria’s liner shipping connectivity index was constant and low, but it has currently grown by 76 percent from 13 to 23 in 2014 compared to China’s LSCI of 156 in the same year.
Going down the memory, it would be recalled that when APM Terminals won the concession to operate Apapa Container Terminal, it was faced with daunting challenges such that the yard, buildings and equipment were in disrepair, with approximately 4,000 people living in the terminal area.
Also, there was significant vessel congestion, and unacceptable long container dwell times, even as the dysfunctional stacking model helped in making location of containers to be difficult, thereby resulting to low productivity.
Given the situation, Skov said, the management went further to clear the debris, remove unauthorised structures within the terminal, fence the perimeter of the facility for appropriate access control, and implement internationally recognised safety and security measures.
“APM Terminals’ investment strategy emphasises economically emerging and developing markets, where the need for investment in port and inland transportation infrastructure is particularly acute. Our commitment to lifting global trade is reflected in APM Terminals’ continuous investment in the infrastructure which will be required to meet the demands of the projected population and economic growth over the next four decades in key emerging market.”
Statistics has shown that ports are critical in the developing economies due to their role in economic growth and social development. This is because port infrastructure plays an important role in the size of the vessels that call the port and efficient terminals promote economic development through higher cargo capacity and increased productivity.
For instance, Nigerian port, which formerly receives vessels with 1,700 TEUs capacity, has started receiving vessels of 4,500 TEUs capacity due to the recent infrastructure development in the sector.
Consequently, emerging and high-growth markets like Nigeria, which are currently served by existing port facilities, will be compelled in many cases to develop new ports in outlying areas with better access. This means that only ports and terminals with sufficient depth, quay front and equipment can accommodate these new larger vessels. This also means that ports with better access roads will be able to facilitate trade in the future.
With more investments, close watchers believe, that larger vessels will call Nigerian ports and this will significantly enhance the productive capacity of Nigeria and Nigerians by increasing choice at a lower cost.
However, without access to international markets and products, the rapidly expanding population of the developing world such as Nigeria will be denied a unique and essential opportunity for economic and social development.
The growth of containerisation of global trade and response by shipping lines is a major opportunity and challenge for those in port business, and a primary driver of continuous investment in infrastructure. Cargo which previously moved as break-bulk shipments such as refrigerated produce, frozen foods, grain, logs and lumber, are now being containerised to take advantage of efficiencies and economies of scale.
UZOAMAKA ANAGOR-Ewuzie