DP World to build and operate new logistics hub in Mali

DP World, a major investor in London Gateway (above), is boosting its footprint in Africa. (Courtesy DP World London Gateway)
Updated 25 July 2018

DP World to build and operate new logistics hub in Mali

  • The Dubai-based ports operator has signed a 20-year concession with an automatic 20-year extension with Mali to build and operate a 1,000-hectare logistics hub
  • DP World is emerging from a torrid period on the other side of the continent where it found itself consumed by a wider political rift between the UAE and Djibouti

 LONDON: DP World has struck a major new logistics deal in Mali as it seeks to boost its presence in West Africa and rebound from a series of setbacks in the east of the continent.

The Dubai-based ports operator has signed a 20-year concession with an automatic 20-year extension with the Republic of Mali to build and operate a 1,000-hectare logistics hub outside of the capital, Bamako.

The multimodal logistics platform, Mali Logistics Hub (MLH), will have inland container depots container freight stations, the Dubai-based port operator said in a statement on Wednesday.

“The Malian market is expected to grow over the next two decades and is driven by a robust economic and population growth,” said DP World Chairman and CEO Sultan Ahmed Bin Sulayem.

“DP World’s investment will significantly cut processing times for goods and thus facilitate trade. We are committed to enabling trade in the region and helping local businesses and people prosper, and look forward to working together.”

The latest investment from DP World in West Africa comes as it emerges from a torrid period on the other side of the continent in the Horn of Africa where it found itself consumed by a wider political rift between the UAE and Djibouti.

That was triggered when Djibouti terminated a contract that allowed DP World to operate the Doraleh container terminal on its east coast. A few days later Somalia also banned the UAE from investing in any part of the country.

Such political considerations may not be as much of a concern for DP World as it develops its footprint in Mali — which nonetheless is not without its own security risks.

On Wednesday armed protesters from Mali’s Arab community fired shots into the air, burned tires and torched vehicles in Timbuktu, bringing the desert city to a standstill days before an election seen as a test of stability across the country, Reuters reported.

DP World’s Mali Logistics Hub will be located on the main road corridor from Dakar, Senegal to Bamako and close to the Dakar-Bamako rail line.

It will be capable of handling 300,000 TEU (twentyfoot equivalent unit), 4 million tons of bulk and general cargo. 

The first phase of the project, with an estimated initial investment of $50 million, will include an inland container depot and container freight station facility.

Construction is expected to start in 2019 and is to take approximately 18 months to complete.

The ports operator said that the Mali logistics hub will significantly reduce processing times for products entering the Malian market as part of efforts to reduce obstacles to trade and economic development. 

Africa is a key market for DP World as the continent’s under-served logistics sector attracts increasing capital from investors betting on the continent’s growth potential and rising income levels.


HSBC profit slump adds to bank sector coronavirus woes

Updated 04 August 2020

HSBC profit slump adds to bank sector coronavirus woes

  • London-based bank reports massive slump in net profit, plans to slash 35,000 jobs

LONDON: HSBC on Monday reported a 69-percent slump in net profit, joining a number of major banks whose earnings have been slammed by the coronavirus fallout.

HSBC announced earnings of $3.1 billion compared with almost $10 billion in the first 6 months of 2019, as spiraling China-US tensions also hurt the British-based but Asia-focused lender.

Alongside HSBC results, top French bank Societe Generale on Monday announced a second quarter loss of more than €1 billion as the pandemic forced it to set aside more provisions against bad loans. UK banks Barclays, Lloyds and NatWest all last week reported huge financial hits linked to the pandemic’s fallout.

But there have been some bright spots, with French bank BNP Paribas weathering the coronavirus storm in the second quarter with only a small dip in net profits thanks to a surge in investment banking.

Credit Suisse meanwhile saw net profit jump almost a quarter in the April-June period, also on investment banking gains.

HIGHLIGHT

$1 BILLION - Alongside HSBC results, top French bank Societe Generale on Monday announced a second-quarter loss of more than €1 billion as the pandemic forced it to set aside more provisions against bad loans.

“HSBC has done little to lift investors’ spirits as it brings the curtain down on what has been a costly half-year reporting season for banks in general,” noted Richard Hunter, head of markets at Interactive Investor.

Even though banks “are much better prepared for this economic onslaught than during the financial crisis of over a decade ago ... the immediate outlook is bleak,” he added.

HSBC said that its pre-tax profit slid 64 percent to $4.3 billion in the first half while revenue was down 9 percent at $26.7 billion.

The figures missed analyst forecasts and the bank also raised its estimate for 2020 loan losses to $13 billion from $8 billion.

CEO Noel Quinn described the first 6 months of the year as “some of the most challenging in living memory.” He added: “Our first-half performance was impacted by the COVID-19 pandemic, falling interest rates, increased geopolitical risk and heightened levels of market volatility.”

Even by the standards of the current economic maelstrom engulfing global banks, HSBC has had a torrid time.

Before the coronavirus crisis it was beset by disappointing profit growth, ground down by US-China trade war uncertainties and Britain’s departure from the European Union.

The London-headquartered bank embarked on a huge cost-cutting initiative at the start of the year, including plans to slash about 35,000 jobs as well as trimming fat from less profitable divisions, primarily in the United States and Europe.

The coronavirus upended some of that cost-cutting drive with banks hammered by market volatility and the economic slowdown caused by the pandemic.

But HSBC has a further headache — geopolitical tensions via its status as a major business conduit between China and the West.

HSBC makes 90 percent of its profit in Asia, with China and Hong Kong being the major drivers of growth.

As a result it has found itself more vulnerable than most to the crossfire caused by the increasingly bellicose relationship between Beijing and Washington.

The bank has tried to stay in Beijing’s good graces. It vocally backed a draconian national security law that Beijing imposed on Hong Kong in June to end a year of unrest and pro-democracy protests. The move sparked criticism in Washington and London but analysts saw it as an attempt to protect its access to China, which has a track record of punishing businesses that do not toe Beijing’s line.

But that has not shielded it from Beijing’s wrath. Quinn referenced the bank’s growing political vulnerability in Monday’s results statement.

“Current tensions between China and the US inevitably create challenging situations for an organization with HSBC’s footprint,” he said.

“However, the need for a bank capable of bridging the economies of East and West is acute, and we are well placed to fulfil this role,” he added.