Hutchison Ports anchors itself in Egypt with two new projects

Hong Kong-based Hutchison Ports has signed agreements to inject around US$700m in two Egyptian port projects, bringing its total investments in the North African country to US$1.5bn.

As part of its plans, the company will develop a new container terminal at Ain Sokhna, located in the Gulf of Suez, with a capacity of 1.7 million 20-foot containers (TEU). The new container terminal is expected to significantly enhance Egypt's shipping trade, as it is strategically situated on the Red Sea and provides direct access to major maritime routes.

Hutchison Ports will also invest in the development of the new B100 container terminal at the Port of Alexandria. This facility will create a fresh entry point to this significant Mediterranean port, which serves as a vital hub for trade linking Europe, Asia, and Africa.

Presently, Hutchison Ports operates two ports in Egypt – Alexandria and El Dekheila, both situated along the Mediterranean. Furthermore, in 2020, the company signed an agreement with the Egyptian Navy for the development and operation of a container terminal located inside the Abu Qir Naval Base.

According to the 2023 Emerging Markets Logistics Index by supply chain services and infrastructure company Agility, Egypt has become one of Africa's logistics success stories over the past decade. The government has launched a US$4bn investment programme to modernise and expand the capacity of the country's ports on both the Red Sea and the Mediterranean. These efforts aim not only to boost container traffic throughput but also to transform the country into an energy hub, with liquid natural gas (LNG) terminals being one of the key components. Additionally, Egypt plans to establish the Suez Canal Economic Zone as a hub for the production of green hydrogen and other clean fuels, catering to both the export market and bunkering (the supply of fuel for use by ships).

However, Egypt's primary focus remains trade with Europe, Asia, and North America. Excluding its North African neighbours, the country's trade links with the wider African continent are relatively limited. The continent accounts for a mere 15% share of its exports. According to Agility, the African Continental Free Trade Area (AfCFTA) could potentially act as a catalyst for a shift in trade priorities, as it will strengthen links with new trade partners and open up numerous opportunities.

Earlier this month Abu Dhabi-based AD Ports Group also announced a series of commitments to expand its activities in Egypt. The group signed a 30-year concession agreement to develop and operate a multi-purpose terminal at the Safaga Port, located on the Red Sea, with an investment of up to US$200m. Additionally, AD Ports inked two 15-year agreements with the General Authority for the Suez Canal Economic Zone to develop two cement terminals, requiring a combined investment of around US$33m. 

 

References

‘Hutchison Ports announces US$730 million investment in collaboration with Egyptian Navy to develop new container terminal’, Hutchison Ports, 27 August 2020

‘SCZONE during “Africa Energy forum 2022”: Transformation to Green Economy in Africa starts from Egypt next November’, Suez Canal Economic Zone, 22 June 2022

‘Hutchison Ports announces major investment of US$700 million in Egyptian port projects in Sokhna and B100’, Hutchison Ports, 16 March 2023

‘AD Ports Group signs a 30-year concession agreement to develop and operate Safaga Port in Egypt’, AD Ports Group’, 18 March 2023

‘Our ports: Middle East and Africa’, Hutchison Ports, Accessed 22 March 2023

‘Agility Emerging Markets Logistics Index 2023’, Agility, 2023