Maersk Plans $120m Expansion in Lagos Port

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31 Oct 2011

Danish shipping and ports operations giant, AP Moller-Maersk Group, has concluded plans to expand its ports operations in Nigeria.The move by the firm, which subsidiary in Nigeria,

AP Moller Apapa Terminals Ltd, is the concessionaire of Africa’s largest container terminal, Apapa Container Terminal (ACT), Lagos, would help it to meet its rapidly growing Nigeria’s import volumes.
The company is said to be considering a $120 million proposal to develop land at its Apapa facility that would eventually handle more than 1 million TEUs annually.
The Danish shipping giant, which has its corporate headquarters in Copenhagen, the capital of Denmark, is expected to make a final investment (FID) before the end of this year.
Impeccable sources close to the subsidiary of the company in Nigeria said it was sure that the plan to enlarge the container stacking yard, invest in new equipment and improve the customs area would go ahead as planned.
According to the source, the investment would be part of a much larger commitment by AP Moller-Maersk to boost its business in the West Africa and Central Africa Sub-regions.
Already, it has spent $2.5 billion on 22 purpose-built ships for the West Africa trade besides the procurement of modern cargo handling equipment.
Managing Director, Maersk Nigeria Limited, Mr. David Skov, had in a media briefing in Lagos said: “We are not here to make a fast profit. We are here for the long-run”.
THISDAY checks revealed that with half a dozen of the world’s 10 fastest-growing economies in sub-Saharan Africa, Maersk has targeted the region as one of its key markets of the future.
At the last count, six of the first 11 ‘WafMax’ ships have been delivered, with the second series of 11 due in 2013. Two of the vessels will carry the name of sister company Safmarine, which also has a 30 per cent allocation on all the new ships.
WafMax vessels were the first containerships designed specifically for the ports situated in the West African sub-region, where the water depths are relatively shallow, and also the largest in the trade. They are replacing ships of around 2,500 TEU previously on Maersk Line’s FEWA2 loop between Asia and West Africa.
Prior to the removal of wrecks and derelicts from the Lagos channels, as well as its dredging, the largest container-ships Nigerian ports could handle were about 3,500 TEU.
However, the WafMax vessels with a shallow draught but wide beam that allows for 17 rows of containers across their decks are able to come into Apapa almost fully laden.
At the moment, some cargoes have to be taken off in Walvis Bay, but very soon the WafMax ships should be able make their first call in Lagos once further dredging to a depth of 13.5 metres is attained.
It was gathered that the plans to raise capacity at ACT were being driven by a sharp rise in containerised cargoes over the past year as demand recovers from the slump in 2009 when global box lifting shrank considerably.
The vessels with their larger capacity and lower slot costs have also enabled Maersk to grow its share of the Nigeria trades, with the total container market said to be up by 23 per cent so far this year.
However, there are also many impediments to trade, with roads in a dreadful state, no rail freight services and layers of bureaucracy, which add to the distribution bottlenecks and the cost of doing business in the country.
As a way out, the Federal Government has announced a reduction in the number of agencies allowed to inspect cargoes in the ports. Subsequently, the number of government agencies in the seaports has been reduced from 14 to 6.
Source: This Day