Transforming Berbera into a world-class centre of trade

Uusmiir · July 26, 2021, 4:15pm

Sultan Ahmed Bin Sulayem Follow

Group Chairman & CEO of DP World

Last month, I joined Muse Bihi Abdi, President of Somaliland, Ahmed Shide, Minister of Finance of Ethiopia, Dagmawit Moges, Minister of Transport of Ethiopia, and Mustafa Mohammed Omar, President of the Somali Regional State in Ethiopia, to officially inaugurate the new container terminal at Berbera Port, following completion of the first phase of its expansion.

The inauguration is a milestone in DP World’s partnership with the government of Somaliland. Together, we are realising our shared vision, long-term confidence, and intention to transform Berbera into a major maritime, industrial, and logistics hub in the Horn of Africa, especially for Ethiopian transit cargo.

Unlocking prosperity in the Horn of Africa

The Horn of Africa, home to the port city of Berbera, and with a population of more than 140 million people, is dynamic and ever-evolving. Despite the economic shocks of the pandemic, the region has showcased remarkable resilience, managing to grow by 0.88% in 2020. A testament to its growing consumer markets, natural commodities, and strategic location with excellent access to some of the world’s major trade sea lanes and land routes, from the Suez Canal to the Strait of Malacca.

However, the sharp decline in remittance levels and significantly reduced livestock exports to the GCC resulting from the pandemic are crucial issues the government will need to grapple with in the years to come to ensure a robust recovery.

A boost to trade competitiveness is a central focus of Berbera and the region as a whole. We stand ready to support its economic recovery through our activities at Berbera port and Berbera Economic Zone (BEZ) and I am confident that our continued investments will enable the region to capitalise on its post-Covid growth and growing FDI flows from markets such as South Korea.

A successful first phase of port expansion

Infrastructure is critical to economic recovery.

The first phase of Berbera port’s expansion began in October 2018, when President Abdi and I broke ground to start construction. Just two and half years on, we have a modern, world-class infrastructure asset that helps improve operational efficiency and productivity to meet growing demand. The new terminal, with a deep draft quay of 400 metres and three gantry cranes, is capable of handling the largest container vessels in operation today and increases the port’s capacity from the current 150,000 TEUs to 500,000 TEUs a year.

We are building a Berbera fit to handle the demands of today’s trade economy, whilst helping expedite its progress towards a self-reliant society. For example, edible oil was previously brought in pre-packaged containers, but now DP World is building a state-of-the-art facility that can store goods in bulk, and allow companies to package them locally.

But our work to develop Berbera into a major port in the Horn of Africa and for Eastern Africa does not stop there. Work is already underway to further expand the port in a second phase. This phase, a crucial part of our commitment to invest up to $442 million at Berbera port, will include an extension of the new container terminal’s quay by more than twice its current length, to a total of 1,000 metres. We will also be installing additional quay cranes to increase the port’s handling capacity to up to 2 million TEUs a year.

How we will bring FDI and jobs to Berbera and its neighbours

Moreover, to maximise the economic potential of Berbera’s strategic location and the benefits that will follow from the port’s ability to handle increased levels of trade, we are also rapidly developing the Berbera Economic Zone (BEZ).

Modelled on Jebel Ali Free Zone (Jafza), our flagship Free Zone in Dubai, BEZ will provide local and foreign investors with a conducive and competitive environment for investment and trade through readily available infrastructure including prebuilt warehousing facilities, serviced land plots, and office and business centre spaces. The BEZ, combined with the increased power of the Berbera port development, will also support Somaliland’s fast-growing neighbour, Ethiopia, as it seeks to bolster the export competitiveness of its manufacturers.

Ethiopia is one of the fastest growing economies in Africa and its policymakers and business leaders continue to be well poised to maximise results from improved national productivity as it aims to reach lower-middle-income status by 2025. I have no doubt that the new container terminal at Berbera Port and the BEZ can play an instrumental role in helping achieve this goal and the government’s 10-year perspective plan by offering Ethiopia opportunities for trade, infrastructure investment, and employment.

I am grateful to our customers, partners, suppliers, and the local community in Berbera, for their continued support, as well as our teams at DP World Berbera and in Dubai, for their hard work to successfully deliver this project. It is trade infrastructure that has ensured the region’s resilience, and it will be improved trade infrastructure that will fuel its recovery and growth.

Suldaanka · July 26, 2021, 11:44pm

Very interesting indeed.

This is exactly what will make a difference. Building assembly/processing lines and packaging factories will help Berbera become a hub for business.

If Berbera can attract big business to ship parts and get them put together as final product in Berbera where the markets for Africa, Asia and even India subcontinent is within reach. That will transform Somaliland completely.

Uusmiir · July 27, 2021, 1:46pm

Hyundai Construction Equipment (HCE), an affiliate of the Hyundai Heavy Industries GROUP, has signed a distributorship agreement with NEFC, a move that is set to accelerate its forays into the East African market including Ethiopia, Djibouti, Somalia, Somaliland, and South Sudan

Uusmiir · September 28, 2022, 10:44am

BECOMING THE PORT OF CHOICE FOR EAST AFRICAN CUSTOMERS

DP World Berbera provides services for container terminal operations, General Cargo operations, in addition the terminal offers warehousing, LCL storage/handling and stuffing, un-stuffing of containers as well as export livestock. As an integral part of the Berbera Corridor and the economy of Somaliland, DP World Berbera offers a superior transit gateway to Ethiopia.

Services include:

Business center - one stop shop (booking, billing, banking)
and customer service office
VGM insurance
Container terminal
General Cargo and livestock terminal
Customs facilities
Ministry of Trade offices (for customer clearance process)
Safe, secure and efficient handling and transport across Somaliland, Ethiopia and the Horn of Africa
Leveraging digital systems using state-of-the-art technology to heighten efficiency

A new, fast and efficient land corridor will enhance trade and bring unrivalled value to customers in the Horn of Africa.

This 250 kilometer land route will be built to connect Berbera port and Ethiopia, in partnership with the Abu Dhabi Fund for development and the UK’s Department for International development.

The 22.5km Hargeisa Bypass Road, funded by UK Aid, will enhance the capacity of the Berbera Corridor, and further reduce transit times of trucks by minimising congestion.

Phase 1 extension

In addition to the 650 metres of linear wharf, DP World Berbera completed an additional 400 metre quayside and additional 250,000 square meters of port yard, thus increasing the capacity of the port to 500,000 TEUs.

Extension dedicated for containers with 400m additional quay, 16m draft. Capable of handling up to 400m LOA vessels, 8 high, 24 wide. The container terminal currently has 500,000 TEU capacity.

The new terminal also opened the One Stop Service Centre equipped with modern fiber-optic network, fully computerized system in operations, maintenance, finance, billing, payment and cargo tracking. A new CCTV system with control room monitoring over 250 camera is also implemented.

The Port also handles World Food Programme shipping, which mainly consists of aid supplies bound for Ethiopia and Somalia. Facilitating in conjunction with other responsible organizations, the sustainable growth of trade is realized through the port while providing jobs for more than 2,000 Somalilanders.

DP World Berbera received two awards at the Global CSR Awards 2021, Asia’s most prestigious recognition awards programme for Corporate Social Responsibility and Corporate Governance. The Terminal received the ‘Platinum Award’ for CSR Leadership in recognition of individual leadership and contribution to the environment, community, and education sectors, and our Sustainable Community programme. The second award won was the ‘Silver’ for ‘Best Community Programme’, in recognition of long-term impact in education.

GROW Second Batch

DP World Berbera commenced induction and orientation training for 14 Grow Team second batch for two years training. The induction workshop will take 3 days in which they attend several sessions including: Current Developments made by DP World Berbera, Safety and Security Pillars and Procedures, HR Policies, Our Sustainability Initiatives and Our Principles, Operations Session and lastly Customer Service Sessions. The Grow second batch consists of three departments, 8 Electrical Engineering, 4 Mechanical Engineering and 2 will join the Customer Service Department.

Uusmiir · January 7, 2023, 9:39am

There is much more: the port of Berbera Photo: Ed Ram/afp/getty images

BERBERA taz | In the historic center of Berbera, the streets are just sandy paths. A few women in front of the houses wash their laundry in large bowls. The water is brought in yellow canisters. To the right and left of the road are high gray heaps of stones. Former residential and commercial buildings have fallen into disrepair. It’s Friday afternoon, the sun is already low and is casting long shadows, the shops are already closed and under the shady trees men are drinking sweet and bitter tea and chewing the drug khat, while a group of boys are wandering the streets. Imams call to prayer from the mosques.

Once a vibrant commercial city, attracting merchants from the Arabian Peninsula and Europe, Berbera was occupied by the Sherifs of Mecca, was under Egyptian rule and eventually became the capital of the British Somaliland Protectorate when it was no longer administered from India.

Ahmed Farah Awad recalls these times when the city was important for the entire Horn of Africa. The 27-year-old works part-time as a city guide and shows the Jewish quarter. In a country where Islam is the state religion and conversion to another religion is forbidden, it takes a lot of imagination to imagine that a synagogue once stood here. But hidden in houses that once belonged to the Jewish population, trees of life carved into the walls are the last traces.

Ahmed Farah Awad emphasizes: “Berbera is the connection between Asia and Africa. That is why the city is so important.”

“Everything will grow”: Importer Ahmed Masri Photo: Katrin Gaensler

Now Berbera is to become the hub of trade on the Horn of Africa again. One name is everywhere: DP World. Headquartered in the United Arab Emirates, the company is expanding and says it operates ports and free trade zones in 64 countries, 12 of which are on the African continent.

Somaliland lives from imports

In 2016, Somaliland’s government closed – the former British protectorate, which had merged with Somalia after independence in 1960, split off again after a civil war in 1991 and has been independent since then, but not recognized internationally – and DP World a deal. The port logistics company is investing 442 million US dollars in the expansion and modernization of the port of Berbera and in return will receive a 30-year port operation concession with an automatic 10-year extension.

The expansion includes deepening the harbor basin and extending the pier by 400 meters, which was completed in 2021. This is the workplace of shift manager Mohamed Atteye. He oversees the unloading of containers from the Liberian-flagged freighter AS Alva, which has just arrived from the Saudi Red Sea’s Jeddah. Three new cranes make this possible. The work is fast and efficient, with trucks waiting in line next to AS Alva to drive the containers to their destinations.

For Attaye, this is a real achievement. “We used to have to use ship cranes,” he says. 7 containers were unloaded per hour, today 30. The work is also safer. Atteye recalls accidents ranging from broken bones to fatalities. He expects the expansion to continue. More cranes are to come, the pier will be extended.

Numerous freighters come from the Arabian Peninsula with building materials and food, says Atteye. Somaliland lives from livestock farming and has neither its own industry nor significant agriculture. Everything must be introduced.

Hoping for a new free trade zone

According to Somaliland’s largest importer, Ommar International Company. Manager Ahmed Masri stands in front of his open warehouse. 50-kilo sacks of sugar from India and Brazil are stacked to the ceiling. Wheat flour, palm oil and soap are also temporarily stored. Day laborers are unloading a truck in front of another hall. 200 coolies, as Masri calls them, work here every day. There are also 10 employees.

Only 40 percent of goods in Berbera remain in Somaliland. “60 percent go to Ethiopia,” says Masri. The neighboring country has almost 120 million inhabitants, but does not have its own access to the sea. Djibouti is the most important port for Ethiopia, but Ahmed Masri hopes that in the future Berbera’s port will serve all of East Africa, all the way down to Tanzania. The new free trade zone, in which Omaar International wants to operate another warehouse, should ensure this. “We’ve already submitted our application.”

In the new free trade zone, a 50-hectare area outside the city, 20 units, each with 500 square meters, are ready for occupancy. There is a gas station and an administration building. Excavators, a green construction crane and large blocks with gray paving stones indicate that there is still a lot to do. “We’re done,” says Joseph Oguta, however. The Kenyan runs the free trade zone, which is also operated by DP World. “We’re a family,” says Oguta.

The free trade zone is another building block to make Berbera an international hub again, and at the same time the link between the port and the target market. It should be worth using them: If goods are intended for export to neighboring countries, no taxes have to be paid in Somaliland. DP World also emphasizes that jobs will be created. There is talk of more than 2,750 – quite a lot for a country with 3.5 million inhabitants.

Not only the infrastructure in Berbera is central to the major project, but also the newly developed overland road to the capital Hargeisa. It’s on the way to Ethiopia. Hargeisa is currently being given a 22.5-kilometer bypass so that the trucks no longer have to struggle through narrow, holey roads.

Retribution against Djibouti

The port expansion is also a message to the neighboring country Djibouti. The homepage of the port there states that since 1998 100 percent of Ethiopian sea traffic has been handled through this port; other estimates put it at 90 to 95 percent. Somaliland wants to snatch part of it.

At the same time, the expansion of Berbera can be seen as a tit-for-tat for DP World against Djibouti. Since 2012, the company has been in court with the Djibouti state over the Doraleh container terminal, an extension of the port of Djibouti, whose DP World concession was withdrawn by the government in 2018.

Berbera stays. This is also lucrative for port logistics company DP World because the Dubai company holds 65 percent of the shares and the Somali state only 35 percent. Ethiopia, meanwhile being discussed as a shareholder, withdrew. Somaliland’s Finance Minister Saad Ali Shire describes the port as Somaliland’s cash cow. As planning minister, he drove the deal with DP World himself in 2016.

Up to 75 percent of Somaliland’s state revenue – the country’s state budget is around 350 million US dollars – comes from customs duties. According to the minister, the port accounts for 85 percent of the customs revenue. In the future, 65 percent of this income will now go to DP World.

Why is Somaliland’s cash cow moving to another stable? The minister smiles at this question. The port is still a joint venture and when a ship docks, the port authority levies a fee. When unloading, there is a processing fee, of which Somaliland receives 10 percent. “The more goods land, the more we earn,” he says optimistically. The minister does not want to assume that DP World or Dubau will also abuse their influence politically. “It’s not about one superpower like China. We also have trust.”

Manager Ahmed Masri is also hopeful in Berbera. Good times are coming for the city, he believes: “The business will grow. Everything will grow.”

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