DP World to acquire majority stake in South Korean forwarder

Container terminal operator moves into land-based logistics sector having already diversified into feeder and shortsea shipping.

DP World is poised to acquire a 60% shareholding in Unico Logistics Co. Ltd., one of South Korea’s largest independent NVOCCs (Non-Vessel Operating Common Carrier).

“The transaction, subject to regulatory clearances, is expected to close in Q4 2020, and represents another strategic step in DP World’s vision to build an integrated suite of service offerings that will connect directly with end-customers and beneficial cargo owners to remove inefficiencies in the supply chain and accelerate trade growth,” the Dubai-based group’s port terminal operator said in a statement.

Established in 2002 by H.J. Park, Unico has a global footprint of 25 subsidiaries in 20 countries. It is a multimodal transport specialist with strong market position in the fast-growing transcontinental rail freight market between East-Asia and Central-Asia and Russia, in particular on the strategically-important Trans-Siberian Railway (TSR) and Trans China Railway (TCR).

“The acquisition is in line with DP World’s global strategy to grow as a smart supply chain solutions provider and will provide a platform to drive synergies between Unico and DP World operations in the Asia Pacific and European regions, while also continuing the expansion of logistics capabilities within DP World’s portfolio. In addition, Unico’s’s expertise in handling automotive logistics is aligned with DP World’s strategic focus on this sector,” the statement added.

Commenting on the move, Sultan Ahmed Bin Sulayem, DP World’s group chairman and CEO, said: “DP World’s vision is to become the leading end-to-end supply chain solutions provider. By integrating Unico into our worldwide network we will be able to offer better service to our customers in South Korea and beyond. These new services further strengthen our logistics capabilities, which we are combining with our maritime services operations and our worldwide network of ports and terminals.”

For his part, Unico’s president and CEO, H.J. Park, noted: “Unico has delivered significant growth over the years and we are proud of our success but we believe this partnership with DP World will allow us to take the business to the next stage of its growth. Being part of DP World will allow us to develop further from the Group’s deep relationship with end-customers and wide global network. We look forward to a prosperous future together.”

Separately, DP World has announced that it handled 33.9 million TEU across its global portfolio of container terminals in the first half of 2020, with gross container volumes decreasing by 5.3% year-on-year on a reported basis and down 3.9% on a like-for-like basis.

At a consolidated level, the group’s terminals handled 20 million TEU during the first half of 2020, increasing 2.4% on a reported basis and down 5.4% year-on-year on a like-for-like basis. Reported consolidated volume in the Americas and Australia region was boosted by the consolidation of Australia, Caucedo (Dominican Republic), acquisition of container terminals in Chile and commencement of operations in Posorja (Ecuador).

Jebel Ali (UAE) handled 6.7 million TEU in 1H2020, down 6.8%% year-on-year, due to Covid-19 and loss of lower-margin cargo.

Group chairman and CEO, Sultan Ahmed Bin Sulayem commented: “Like most industries, the maritime and logistics sector is going through an unprecedented and challenging period due to the COVID-19 outbreak. As a result, our portfolio has seen volumes weaken by -7.9% in 2Q2020 and -3.9% in 1H2020. However, this compares favourably against an estimated industry decline of -15% in 2Q2020 and -10% in 1H2020. This outperformance once again demonstrates that we are in the right locations and a focus on origin and destination cargo will continue to deliver the right balance between growth and resilience.”

Source: Lloyd’s