DP World’s Imperial Logistics considers Egypt, Angola acquisitions

By David Whitehouse
Posted on Tuesday, 16 August 2022 06:00

Terminal tractors line up to offload their containers into a cargo ship at DP World's fully automated Terminal 2 at Jebel Ali Port in Dubai
DP World terminal at Jebel Ali Port in Dubai, United Arab Emirates. REUTERS/ Hamad I Mohammed

Imperial Logistics, which is owned by DP World, is considering acquisitions as a way to enter new markets including Egypt and Angola, CEO Edwin Hewitt tells The Africa Report.

The company may be involved in “some kind of acquisitive growth” in the two countries, Hewitt says. Imperial Logistics became a wholly owned business of DP World in March. “The work has started” in terms of defining a strategy for Imperial’s growth, Hewitt says, without giving a timeline for new market entry.

DP World operates nine ports and terminals in eight African countries, Algeria, Angola, Egypt, Mozambique, Rwanda, Senegal, Somaliland and South Africa. Hewitt aims to leverage that network to expand the range of corridors in which Imperial offers logistics solutions.

About 90% of all goods moving in and out of Africa pass through a port and  a land trade corridor, Hewitt says. He predicts that Africa’s corridors will grow by an average of 8% a year in terms of value transported. That means an opportunity to create a “formidable joint force” with DP World.

Egypt is overhauling its transport infrastructure by building roads, and expanding and modernising its rail and canal networks. According to Oxford Business Group, 30,000 km of new roads will be completed in the country by the end of 2024 under a 10-year transport modernisation plan. The government has said it aims to increase transport sector investments by 27.5% in the current fiscal year.

  • In Angola, DP World has signed an agreement with the government to develop the country’s trade and logistics sector. The company will invest $190m to modernise Luanda port into a regional maritime hub.
  • Further markets where Imperial wants to expand as part of an organic and inorganic growth strategy include Somaliland, Ethiopia, Senegal and Algeria, Hewitt says.

Southern Africa

Imperial offers tailor-made solutions including warehousing, inventory, distribution and overall supply-chain management. The company has 25,000 employees in 12 African countries. Hewitt gives Imperial client Nigerian Breweries as an example of a company which used to outsource logistics to whatever truck owners it could find, but which now understands the benefits of an organised approach.

The company also wants to grow its footprint where it operates already, and will also consider logistics projects which don’t depend on a port, Hewitt says.

The war between Russia and Ukraine has led to a renewed focus on supply chains as businesses try to reduce risks and costs. Hewitt is confident that this year’s global inflationary shock won’t derail expansion plans. “It’s the same for everyone,” he says, adding that consumers face the final burden of higher prices.

Imperial currently operates in four African trade corridors, and plans to raise that to eight. The company in July closed the first tranche of its purchase of J&J Group, the largest integrated logistics operator on Mozambique’s Beira corridor. Imperial now has a 51% stake, which will be raised to 100% in later tranches.

  • Also in July, Imperial raised its stake in PST Sales & Distribution in Botswana from 38% to 72%.
  • The company, which has a partnership with Standard Bank’s corporate & investment banking division to reduce supply chain costs,  is “looking at further acquisitions in southern Africa,” Hewitt says.

Bottom line

Imperial Logistics is keen to make further acquisitions as part of its growth strategy.

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