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COMPANY PROFILE

2014

APM TERMINALS

Lifting trade to new heights


COMPANY PROFILE

Lifting trade to new heights

Editorial: Joe Forshaw Production: James Clark

APM Terminals are seeking continued growth in Africa and although times have been tough over the past few years, the company has adapted its strategy to ensure it remains an industry leader. Julian Arriaga-Mendoza, General Manager New Business for APMT Southern Africa tells IndustrySA more about plans for 2014.

Following the global financial slowdown that started in 2008, economies and industries around the world have been hit hard and the difficulties have been plain to see for everyone. Although South Africa’s economy has remained fairly strong over the past five years, there have been detrimental effects for many companies and to avoid problems businesses have had to be efficient and creative with their strategies. A shining example of this is seen in the business of APM Terminals (APMT) Southern Africa, part of the global group offering port management, container terminal operations, and a wide range of local inland container transportation and cargo warehousing services. The company has adapted its strategy to operate as efficiently as possible in the challenging economic conditions and their focus on the African market is something which continues to grow. Julian Arriaga-Mendoza, General Manager New Business

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at APMT Southern Africa, tells IndustrySA that there are many exciting projects in the pipeline for 2014 and the whole group is focussed on growing business, especially in Africa. “Today, Africa is very high up on the list of interest for our company from a global perspective. If it’s not first, it’s second on that list,” he says. “We have huge interests, in both inland services and terminals, in East and West Africa as well as Southern Africa. There are huge opportunities and we want to expand our footprint. “South Africa itself offers huge growth opportunities. We have a strong presence in South Africa with inland services but we definitely want to set a footprint on the terminal side of the business if possible. “In 2014, we are planning to open a packing and unpacking facility in Walvis Bay, Namibia, outside of our current premises. Currently, we are located in Namport but we are going to relocate three kilometres away from the port and provide the services of packing and unpacking to our various


APM TERMINALS

customers. We have identified a strong necessity for this in Walvis Bay and we hope that the new facility will be open by March 2014.”

STRATEGY APMT core business surrounds assisting the container shipping business. The company provides a long list of services including; cargo heating, container sales, container freight station, cross haul operations, empty depot services, inland container depot, port support services, refrigerated container services, refrigerated warehouses and trucking. Obviously, all of these services are centred on customers in the shipping industry, an industry which in 2012 saw a reduction in port tariffs in order to make the industry more cost effective and attractive to foreign shipping companies. In 2012, it was rumoured that some shipping companies had threatened to cease operating in South African ports because of the high costs, out of line with the rest of the world, but the reduction in tariffs and massive investments

into facilities at the Port of Ngqura and other ports around the coast have ensured that this important industry remains highly active. APMT calls some of the world’s biggest shipping and freight companies its customers and when these companies change their strategies, it can have a knock on effect for APMT. Of course, this means that business strategies are closely monitored and adapted and Julian suggests that this flexibility has allowed the company to remain efficient and maintain its position as an industry leader with more strategy adjustments planned for 2014. “We are mainly driven, in our Southern Africa cluster, by our customer base of shipping lines; in amongst these names we have Maersk Line, Hapag-Lloyd, CMA CGM, Evergreen and this varies between are different locations,” he says. “From our point of view, whenever there is a shift with a shipping line and they change their strategies, positioning equipment at different locations, more specifically here in South Africa where recently most shipping lines undertook a

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COMPANY PROFILE restructure; that has a huge impact on us because the increase in cost is not passed through to us and we do not get the benefit of the restructure. If anything, we are required to look into improving our efficiencies in order to become more cost worthy for the shipping lines themselves. “After 2008, there was a new strategy rolled out at group level, making the organisation much leaner, in order to get through those tough times. “From the perspective of inland services including empty container storage, I would say that we are one of the top three companies. When it comes to reefer management, including the repair of reefer containers and our facilities, I would say that we have to be ranked in the top two. “In 2014, we are planning on rolling out a strategy revision. In the past couple of months we have established that we need to reconsider our current business plan, which revolves around storing empty containers, and move into a situation where we are able to deal with full containers; warehousing, unpacking, car unpacking and heating glucose, basically diversifying our business so that we are not stuck doing the same things we have done for the past 20 years.”

STRONG HISTORY APMT at global level is one of the industry’s real powerhouses.

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The company offers the global shipping community a geographically balanced, integrated global terminal network which includes current operations at 63 ports and terminal facilities in 40 countries with seven new terminal development projects and 16 expansion programs now underway, along with over 160 inland services operations in 47 countries. Staffed by 20,000 professionals across a total of 68 countries spanning five continents, APMT serve every major trade lane with a truly global presence, providing customers with the most advanced terminal technology, equipment and operations in the industry. The history of the company is closely tied in with that of another industry giant, Maersk Line. APMT originated as the terminal operating division of Maersk Line but in 2001 was established as an independent division within the A.P. Moller-Maersk Group. In 2004, APMT moved its corporate headquarters from Copenhagen, Denmark to The Hague, Holland, and in 2008 the company started reporting results as a separate business entity. Historically, there are strong links between APMT and South Africa as the company’s terminal operations began more than 50 years ago with a general cargo facility at the Port of New York. The company was involved with Sea-Land (a pioneering shipping and containerisation company acquired by the A.P. Moller-Maersk Group) and the very first international


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container operations when the Sea-Land Fairland was loaded with 236 containers bound for Rotterdam at Port Elizabeth. In South Africa, APMT has grown through acquisitions and innovative service provision as Julian explains. “In South Africa, we had a very similar concept to the worldwide group,” he says. “The company operated under the local brand, SATI. The SATI organisation was built on a necessity from Safmarine and Maersk Line, from when we were all in the same group, and they needed to create a depot. That’s where SATI comes in; they became the preferred depot of Safmarine and Maersk Line at the time but it was only considered a cost centre. “In 2008, following the change in strategy, we began to focus on container inland services and we started operating as a separate business unit with our own profit and loss etc and in 2010 we become part of APM Terminals and operate under the brand APM Terminals Southern Africa.” As mentioned above, Africa and Southern Africa are highpriority areas for APMT and the world’s major shipping lanes pass along the South African coastline in the south Atlantic and

Indian oceans. Approximately 96% of the country’s exports are conveyed by sea and the country’s ports are some of the busiest and most advanced in the world. For example, Durban is Africa’s busiest port and the largest container facility in southern Africa, Richard’s Bay is the world’s largest bulk coal terminal and The Port of Ngqura is the deepest container terminal in Africa. With this in mind, APMT and the industry more widely are actively investing in their port/terminal activity and Julian explains that in just 12 months, he has seen major progress in this area. “I’m originally from Latin America and I’ve been with the company for over 12 years. I’ve been in South Africa for just over a year and in that short amount of time I’ve seen the opening of three new high-capital facilities in East and Southern Africa.”

AUTOMOTIVE EXPANSION South Africa’s automotive manufacturing industry is an important one for the country, creating numerous jobs, attracting large amounts of foreign investment and

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COMPANY PROFILE

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APM TERMINALS

Your equipment rental solutions for the marine, mining and private sector Equipment Mobile Offices Ablution Units Waste Skips – 6 CBM 30 Ton Crane – Rough Terrain Crane 80 Ton Crane – Rough Terrain Crane 16 Ton Forklift 7 Ton Forklift 4 Ton Forklifts

3 Ton Forklifts 2.5 Ton Forklifts 14 Ton Flat Deck Truck 12 Ton Flat Deck Truck with Hiab (Truck Mounted Crane) 2x 9 Ton Single Axle Skip Truck 13 Ton Double Axle Skip Truck Welding Machines 20 FT Half Heights

Manager: Mobile: Office: Fax: Email: Email: Address:

stimulating activity throughout the supply chain with local businesses. Many of the major manufacturers; BMW, Mercedes-Benz, VW, Ford, Toyota etc, all have plants in South Africa and all are strategically located near the major ports because shipping remains the cheapest form of long distance transportation. In 2012, APMT invested in a full-service depot at the Coega Industrial Development Zone (IDZ) in Port Elizabeth. Julian says that although the launch of this facility was initially delayed, it is now running well and the company will look to provide services to the automotive sector, further diversifying its service portfolio. “Operations in Coega have been going well,” he says. “Unfortunately the project itself was delayed by six months so obviously the volumes have been smaller than we expected. This is a clear example of how changes in shipping strategies can affect us. “Coega is running well. We are looking at diversifying and getting into other types of business such as providing services for brands like General Motors and BMW where will support them in terms of their overflowing containers when their production facilities are filled to the brim.” Obviously this type of investment is beneficial for the local community as well as the company and Julian says that a number of jobs and other opportunities have been created.

Additional Services Container Packing and Unpacking Cargo Lashing and Unlashing Rigging and Rigging Solutions Storage And any other related services you may require

Thomas Wolff +264 81 128 4283 +264 64 213 200 +264 64 213 201 thomas.w@rssnamibia.com info@rssnamibia.com PO Box 157 34 2nd Street East Synchrolift Industrial Area Walvis Bay, Namibia

“It has a major impact locally with the creation of jobs and opportunities and also from the perspective of our shareholders and our credibility.” The R25million investment has resulted in the company being able to provide a full range of services for dry and reefer containers, which includes landside services such as repairs, handling, storage, monitoring and container conversion. Apart from these services, APM Terminals also operates a trucking yard from its depot. This investment forms part of a larger plan for expansion in Africa and Imtiaz Mahomed-Ally, APMT COO confirmed that the company would continue to search out growth on the continent. “A Nelson Mandela Bay depot has always been part of our plan,” he said. “We were just waiting for the Port of Ngqura to be fully operational and shipping lines to show commitment to use this port before we embarked in a depot investment in the Coega IDZ. “We are here to stay and expand our footprint in depot operations in southern Africa.”

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“We have huge interests, in both inland services and terminals, in East and West Africa as well as Southern Africa. There are huge opportunities and we want to expand our footprint” JAN 14 PAGE 7


www.apmterminals.com

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