By Conrad Prabhu — MUSCAT — Bucking the industry-wide trend in plunging cargo volumes and plummeting bottomlines, Port of Salalah notched up impressive gains during 2009, reinforcing the terminal’s pre-eminence as the transhipment hub of choice in the West Central Asia region.

Container volumes handled by the port were up 14 per cent to 3.494 million TEU last year (3.068 million TEU in 2008), while general cargo volumes climbed 7 per cent to 3.722 million tonnes (from 3.469 million tonnes in 2008). Consolidated revenue at RO 47.7 million exceeded the previous year’s figure by 15 per cent.

The higher revenues and throughput at both the Container and General Cargo Terminals resulted in the company registering a net profit of RO 4.54 million in 2009 (as against earnings of RO 4.52 million in 2008). In an interview to the Observer, Port of Salalah CEO Martijn van de Linde attributed the terminal’s remarkable performance — in the face of a global economic slump — to prudent business, operational and administrative measures adopted by the management.

“It’s been a horrible year for the industry across in the region. We’ve seen ports losing volume all over the Upper and Lower Gulf and also around the Red Sea. East-West trade declined 20 per cent or more. But Port of Salalah has grown actually against the climate with 14 per cent growth in container volume and 7 per cent in general cargo volume.

So we’ve done relatively well in terms of maintaining business and securing more business relative to the ports around us.”
Van der Linde further added: “Whilst our growth has not been as high as previous years Port of Salalah has had a successful year despite the recession and is one of the few ports globally that has achieved increased volumes.

“By focusing a lot on managing the cost base, we have generated a net result that’s slightly above that of 2008, which has been a very important achievement that we owe to our employees and customers, with the support of the government and our shareholders. It means that we have increased our performance not only from a financial perspective but also from an operational standpoint. Our ability to be cost competitive versus other ports in the region has also increased.”

In another significant highlight of the year, productivity at the container terminal surged more than 25 per cent, said van der Linde. The terminal has been recording in excess of 30 moves per hour since the fourth quarter of 2009 — a trend expected to continue during 2010.

While vessel calls at other ports shrank in trend with the global downturn, Port of Salalah pulled in record numbers of ships during the year. Vessel movements at the container terminal jumped 10 per cent to 1,773 calls in 2009, from 1,607 calls a year earlier.

“We grew by securing new business,” the CEO explained. “Towards the middle of 2008 we secured MSC — the world’s second biggest shipping line and our third major carrier — that has generated a volume of 1 million TEU to the port. And at end of November 2009, we received CMA CGM as our new customer. Thus, along with Maersk Line and APL, we pretty much have all of the top carriers in the world calling Salalah.”

With a view to enhancing the utilisation of the port’s capacity, Port of Salalah is also in discussion with other prospective carriers. “We’re talking to all the shipping lines that we think we can add value to. We still have some capacity to sell on the container terminal. We are confident that we will get more business going into 2010.”

Even more dramatic has been the increase in the number of ship calls at the General Cargo Terminal during 2009. Ship calls leapt an unprecedented 68 per cent to 1,946 calls in 2009 from 1,159 a year earlier. Much of the growth in cargo volumes handled at the General Cargo Terminal, van der Linde said, was driven by limestone exports. Around 1.6 million tonnes limestone was shipped last year, becoming the primary commodity of export from Salalah.

In addition to serving as a gateway for industrial investments at the adjoining Salalah Free Zone, the General Cargo Terminal has also been attracting new commodities, notably pipe shipments for Petroleum Development Oman (PDO), and food aid shipments transhipped through Salalah.

On the wet bulk side, the terminal also recorded a significant increase in liquid cargo. Volumes are also projected to rise as Salalah Methanol comes on stream at the Free Zone. Van der Linde is optimistic about 2010 and beyond. “Port of Salalah is well positioned for the future. We’re confident about 2010, although not so much in terms of a global economic recovery, because we expect slow growth for a number of years at the 2-3 per cent mark at least from an East-West trade perspective.

Nevertheless, we’ve budgeted for a 15 per cent growth on the container terminal side in 2010, and 10 per cent on the general cargo side. We expect our relative performance to be good because we have worked on our competitiveness and decreased our cost base. Our ability to generate profits is much better now than it has been in the last two years. That’s make us somewhat confident about 2010.”

“We are a healthier company than we were in 2009 in terms of profitability, customer base and assets. One of our key focus areas is to increase our financial performance towards our shareholders, so we intend to raise the returns on our investment capital and boost dividends during 2010,” he added in conclusion.