While speaking exclusively with TRENDS at World Economic Forum at Davos, Sultan Ahmed Bin Sulayem, Group Chairman and CEO, DP World, says the world is witnessing a positive shift in terms of sustainability.
What would you say about the economic outlook for 2018? How is it being reflected in the shipping and transport industry?
I have been coming here [the WEF Davos conference] for many years and people discuss the world’s economic situation every year. But what actually is happening in the world is totally different.
The shipping industry had a bad year in 2016, however, then in 2017, there were a lot of consolidations and the outlook now looks good for the industry, as many of our clients are reporting good results. This is good and healthy for the market. The problem in the past was one of overcapacity and, hopefully, it is now going to be much less.
But does the overcapacity still exist? Will it be carried forward into coming years too?
Yes, but the number of vessels being built are not enough. And the shipping industry has had its share of ups and downs in the past 30 years. So, it starts with too much capacity, then it creates a drop, then they shrink further and then this dip is absorbed and this is a cycle.
Last year, the global economy fared well and it looks even better this year. Will it reflect in trade?
We don’t know. It depends on our business. Globally, financial analysts of our industry are positive about this year. We normally look at the percentage of growth they predict and, usually, we match up, every time — sometimes we match it and sometimes we do even better.
But I see growth coming from various places. I see growth in India, where Prime Minister Modi has launched initiatives that are the medicines for India.
The country has great potential. How do you unlock this potential? By giving opportunities. So projects such as Sagar Mala are interesting concepts. In our business, the way Indian waterways are being utilized as a mode of transportation is a great business. Also, the Made in India project is great. All of these are amazing initiatives.
Plus, what he [PM Modi] has is an amazing team of ministers — smart and very clear-minded people. When you talk to them, they know what needs to be done and they will take the steps toward that. This is a team the likes of which I have never seen in my entire life, where they know what they want to do and they will make it happen. And that gives you confidence as an investor. When you look at all of the big businessmen in India today, they are all very optimistic full of energetic. They have clarity in their minds — which was never there before.
So, we are a major investor in India — we are very positive about the potential there and we recently signed a deal to participate in an infrastructure fund. Now, we do invest in Africa, the Far East and in Latin America — they are all good markets, but India in particular has special relations with the UAE and PM Modi and Mohammed bin Zayed [Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces] are also very close and both are well wishers of each country. They want to progress their businesses more.
What kind of investments have you made in India and what are your future plans?
We are already working on a number of projects in different cities, such as Cochin and Chennai. We are looking at working on the logistics of other additional related businesses and this is going to reflect in our growth.
In the Middle East, what are your plans for this year?
We are a company that follows our customers very closely. So, we don’t plan; it’s our customers who plan for us. Our customers are very open with us and we plan according to their needs.
What about sustainability and shipping? Do you see any kind of move happening?
Of course. As an industry, we are required to have sustainability. In Jebel Ali, we have installed solar cells. For example, if we are using 30 megawatts of energy, we produce 40 megawatts of it — we produce more. So, for sustainability, we have many projects. In our company, for example, instead of diesel, we use electricity in our ports — there are some that have no diesel at all, only electricity. So sustainability is very important.
We are seeing that self-driving cars are disrupting land transport — at least, this is the plan. Is there something happening in the shipping industry as well?
This is going to happen — sooner or later. I drive myself and I am happy about it. Many people today drive electric cars because they are basically smarter than the old cars. Now India, for example, has a major problem and we are working with their government to solve such problems, such as how we can make sure [in terms of transportation from our side] that the trucks don’t keep polluting the environment.
So, we are looking at waterways for transporting goods and we are looking at trains to connect major cities. I think the move toward sustainability is becoming important and it is economical too. When you look at using diesel in trucks in our ports and terminals, and if you compare it with the cost of a battery on the other hand, it is much cheaper and requires less maintenance. The good thing is that many young people have grown up with concerns about environment and these young people are now in their 30s and they believe in implementing [changes]. So, yes, there is a shift and a positive one. This is same in the Gulf — there are concerns about automating things and becoming more sustainable.