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APM Terminals seeks ports growth in Africa and Russia.

Summary: APM Terminals, the ports arm of Danish shipping and oil group A.P. Moller-Maersk, is investing heavily in fast-growing Africa and Russia to compensate for lack of growth in mature markets like Europe, its CEO said.

APM Terminals, the ports arm of Danish shipping and oil group A.P. Moller-Maersk, is investing heavily in fast-growing Africa and Russia to compensate for lack of growth in mature markets like Europe, its CEO said.

Based in The Hague, Netherlands, the port operator has announced plans to develop a mega-port project and free-trade zone at Badagry, Nigeria, west of the capital Lagos and has plans to expand ports in Congo, Angola and Liberia.

APM Terminals manages or operates 62 ports around the world and is involved in the development of seven new ports.

"Africa is a promising market because of its raw materials, its minerals and its growing middle class," APM Terminals chief executive Kim Fejfer told Reuters in a telephone interview.

A trend towards outsourcing production from countries like China and Bangladesh to Africa was also contributing to boosting trade flows, he added.

"We think the biggest growth opportunities are in emerging markets," says Fejfer, adding that Russia too is a priority area for the group.

Last September, APM Terminals purchased a 37.5 per cent stake in Russia's Global Ports from N-Trans for $860 million to establish a foothold in the Russian cargo market.

Russia became member of the World Trade Organisation last August, which, according to Fejfer, will be a boost for shipping companies and port operators with activities there. "Russia's WTO membership sends a positive signal on global trade," Fejfer said.

Fejfer said that APM Terminals is banking on Africa and other emerging markets where a fast-growing middle class demands more imported consumer goods.

For the coming years, APM Terminals expects global container port volume growth at 4-5 per cent annually, with growth in mature markets at just 0-2 per cent but with emergent markets charging ahead at 6-7 per cent. He said growth for port facilities was generally in line with GDP growth.

In a 2012 strategy review A.P. Moller-Maersk said it set a goal for APM Terminals to earn annual net profit of $1 billion by 2016.

"I think it's realistic. We have the right platform and a portfolio of investments in many places," says Fejfer. The ports unit earned $345 million in the first six months of 2013. Its invested capital stood at $5.6 billion at the end of second quarter.

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Publication:Khaleej Times (Dubai, United Arab Emirates)
Geographic Code:60AFR
Date:Aug 25, 2013
Words:433
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