Port of Salalah, one of the largest multi-purpose ports in the Middle East region, has recorded significant growths in container and general cargo volumes this year, which boosted the port’s revenues and profits in the first half of 2019. The port’s container terminal handled 1.941mn twenty-foot-equivalent units (TEUs) in the six months period ending June 30, 2019 compared to 1.763mn TEUs in the corresponding period of last year, an increase of 10 per cent.
Mark Hardiman, CEO believes that the port’s strategic location combined with the government’s ‘Oman Logistics Strategy 2040’ holds tremendous potential for future growth. Excerpts from an interview:
How was Port of Salalah’s performance in 2018 and in the first half of 2019?
In 2018 we handled a total of 3.385M TEU and 16.203M tonnes of bulk and general cargo. For containers this is approximately 14 per cent less than 2017 and for the bulk/GC a 19 per cent increase from 2017. In the first half this year, we handled 1.941M TEU a 10 per cent increase compared to 1.763M TEU from the same period in 2018, and 8.191M tonnes of bulk/general cargo an eight per cent increase compared to 7.595M tonnes bulk/GC from the same period year 2018.
Please tell us about the new initiatives, partnerships and other milestones?
The biggest milestone in the last year was the celebration of our 20 year anniversary – we had an event earlier on this year celebrating the remarkable achievement. In the first 20 years of operations we have handled over 50M TEU’s and over 115M tonnes of bulk and general cargo – adding massive value to our customers supply chains.
Port of Salalah suffered its first of kind natural calamity in 2018 with Cyclone Mekunu. Has it affected your cargo and container volumes?
It indeed had a large impact in our cargo volumes in 2018 – more so for our container volumes than for our non-container volumes as can be seen in our yearly figures. The main reason that has affected the container side of the business more than the non-container side is because of the impact and damage sustained to our container handling equipment. We did suffer some flood damage to the non-container handling equipment however not to the same extent as the container equipment. The most amount of damage was to our tractor fleet which was almost completely flooded out. We are still in the process of completely renewing our entire fleet – which total to 171 units. The really amazing part for me is how everyone responded post Mekunu. Special mention certainly has to go to all the Port of Salalah employees who were directly involved in the clean-up, as without their impressive efforts we would never have been able to resume operations so soon after the cyclone, as we did. We also received great support from our shareholders who acted quickly is fast tracking approvals to purchase replacement equipment in some cases and to repair damaged equipment in other cases.
Due to all the combined efforts I am pleased to say that just over a year later we have recovered our ability to handle the same cargo volumes that we were handling pre Mekunu. There is still some on-going damage assessment and repairs however the critical items for running the port have mostly been addressed, which even included a few sunken dhows and storm sedimentation.
What are future plans ?
We are currently assessing our future plans which will require some upgrades in infrastructure and equipment. Ship size, especially container ship size development in the last 10-15 years has been a quantum leap and it is very important that the Port of Salalah invests in its assets to be able to accommodate these ever increasing vessels in order to ensure that we maintain our position as one of the leading regional hub ports. Support from both the government and shareholders is high as everyone understands our strategic importance especially considering our geographical position, to the global supply chain. Our most important asset however remain our employees and I am pleased to advise that we are in the process rolling out a LEAN based approach to our operations. Besides benefitting our customers and shareholders there is great focus on personal development for our employees as they learn new tools for their work as well as daily lives.
What is your future outlook for Oman’s ports and logistics sector?
I think a very positive one. The government has rightfully made the logistics sector one of its key focus areas with the Sultanates ‘Oman Logistics Strategy 2040’ Oman, and especially Salalah has a very strategic global position and the government recognises this and is focusing on the sector in order to unlock value across different spheres of the economy. Having worked in the region for over 11 years, I do know that others are also focusing their efforts on logistics however the key difference with Oman is its vantage geographical position and the important part is to align all around this goal, which the government is certainly sparing no effort in doing.
Muhammed Nafie is an Assistant Editor at Oman Economic Review.