Ports have dominated infrastructure talks for the past two years, with increased congestion and bottlenecks due to Covid-19 slowing the global economic recovery. Global ports are vital for trade – serving as gateways for 80% of commercial goods by volume and 70% by value – and a key component of economic growth and economic diversification.

The situation in Africa is no different. Congestion and lack of infrastructure inevitably led to delays, directly increasing costs and reducing competitiveness.

The last decade has seen massive investments in African ports. From Dakar to Djibouti and from Durban to Tangier, the African coast has seen the emergence of modern port infrastructures to meet the needs of a growing continent.

Last month, UK impact investor CDC announced a multibillion-dollar pledge to support DP World’s investments as they seek to expand their business in Africa. Two weeks later, however, the French group Bolloré, present in 42 African ports and operating 16 container terminals, announced that it was reviewing its operations on the continent, hinting that it could sell its port assets.

Clear investment opportunities

For Andrew Dawes, CEO of Arise Ports & Logistics, who has spent the past two decades living and breathing ports on four continents, these announcements reflect the nuanced realities of the African market. While he admits that there is some saturation in some regions, Africa’s long-term growth fundamentals and unmet demand mean that there are clear investment opportunities.

Andrew Dawes, CEO of Arise Ports & Logistics.

Get up P&L is in many ways the product of 15 years of work. The company, officially incorporated last year, is one of the three offshoots of Arise, a builder of industrial ecosystems, itself from the Special Economic Zone of Gabon (GSEZ), created to house the industry. which would transform raw materials, mainly wood. , and develop oil palm plantations.

GSEZ, a joint venture between Olam and the government of Gabon, has grown organically to become a logistics powerhouse in the country, developing key infrastructure in Gabon, including the port of Owendo. Following the restructuring of their operations, the port, which has both a container port and a mining port, was separated into its own entity managed by Arise P&L.

The General Cargo Terminal (NOIP) and the Owendo Container Terminal in Gabon, built by Arise Ports & Logistics.

Today the company has more than 500 employees and its shareholders include Olam (32%), Africa Finance Corporation (AFC) (25%) and AP Moller Capital (APMC) (42%), a subsidiary of AP Moller Holding and part of the AP Moller Group, which also owns the Danish container logistics company AP Moller Maersk. In Gabon, the port is in partnership with the French impact fund STOA, the French investment fund Méridiam and the Gabonese government.

Success in San Pedro

Its new port in Côte d’Ivoire is the San Pedro Multipurpose Industrial Terminal (TIPSP in its French acronym), which is a five-hour drive from Abidjan. It will be a mining port serving both export-oriented customers looking for more capacity, and demand from Côte d’Ivoire and landlocked countries like Mali and Burkina Faso.

Dawes is particularly pleased with Arise P&L’s first foray outside Gabon. The government of Côte d’Ivoire has provided support, he said, and the fact that the road infrastructure from Abidjan to San Pedro has been improved with new works underway will only increase the port’s appeal and raise the country’s profile as a transport hub in West Africa. .

Arise P&L has invested 170 million euros and counts to date, with a second berth already under consideration due to strong demand. This would allow them to process 12 million tonnes per year, which is double what they process at Owendo.

“We are seeing growth in the raw materials sector,” says Dawes. “The growth of manganese over the past few years since 2019 has been exceptional. The demand for certain raw materials has doubled, far exceeding our initial forecasts. We are talking, for example, of a nickel exporter whose production is constrained by port capacity and congestion in Abidjan.

“We are closer to them than Abidjan and a natural outlet. However, with the greater road access, we are really creating a corridor… many governments have the ambition to decentralize the activities of congested ports to their capitals.

“There was maybe a little reluctance to believe in our project, but now people see the cranes and our operations and say: this is fantastic, what can we do as partners together? These are significant investments and we will continue to invest where demand requires.

Arise P&L has solid backers. Fundraising, explains Dawes, is never easy, but they have been fortunate enough to be able to raise funds from international banks in part thanks to the support and track record of their funders.

More expansion in the pipeline

Patrick Bird, who heads business development, says further expansion announcements are expected next year, without naming additional countries. Their approach, he says, is to understand the main economic drivers of ports and tailor solutions to meet those demands.

Patrick Bird, Business Development Manager, Arise Ports & Logistics.
Patrick Bird, Business Development Manager, Arise Ports & Logistics.

“We think the next frontier is where we focus and that’s dry bulk, liquids and general cargo. Most of these jetties, most of these berths are still operated by the government today and this creates a good opportunity for small and medium sized players like us to come and develop a large footprint, ”he said. said Bird.

“There is a lot of competition in the container terminal space now. We believe the next frontier is in adjacent opportunities such as dry bulk, liquid and gen cargo terminals. Many of these berths are still operated by government and local operators today, creating a good opportunity for mid-sized players like us to enter the market and develop a large footprint.

Repair once and for all congested African ports

Dawes says having the right infrastructure is essential for global competitiveness. The viability of African industry, even in the commodities space, depends on efficient transportation and logistics in often high-volume, low-margin businesses.

“Patrick talks about the need to build confidence in our markets. He spends so much time in Africa meeting our future partners because it is necessary. There is a lack of trust and that is us. This is what we deliver and we are starting to have this proven track record. Gabon alone has seen double-digit year-over-year growth in the mining port for five years and it continues to grow.

Dawes recounts how friends in the area still don’t believe the Port of San Pedro exists and is operational. Its mantra – ‘build it and the demand will come’, ensuring that quality infrastructure is there to meet the demand – seems to have paid off. Dawes says a customer just purchased a fleet of 2,500 trucks using this new gangway.

Nonetheless, Dawes says industry and policymakers need to take a different approach to truly unlock the port and logistics conundrum and fix congested ports once and for all. He cites the example of the London Docks, which for practical reasons were moved to another location outside the capital, which kicked off the redevelopment of the area into residential housing and a residential neighborhood. lively business.

Dawes says they have the finances to match their ambitions: “We are truly a 100% African company, which is what sets us apart from the rest. Currently, we are focusing on West Africa, from Mauritania to Congo. I can’t give you exact numbers, but we are looking at a project with a total investment of well over $ 1 billion. We have others that are much smaller. Our shareholders – Olam, APMC and AFC – continue to raise funds and have a great appetite for investment. I don’t think we would be limited in this regard.

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