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DP World Ltd. (DPW), the world’s third- largest port operator, said it’s ready to look at acquisitions in Latin America to meet demand from customers and has enough cash for investments without needing to sell assets.
“If the customer says ‘we need you there,’ we’ll be there,” said Chairman Sultan Ahmed Bin Sulayem. “If the economics are good, why not. The Latin American market is very important to us.”
The operator of ports from China to Russia and Peru isn’t looking at buying assets in the U.S. where acquisition costs are “prohibitive” and can serve the market from other ports in the region, he said today in an interview during a conference in Lima. DP World isn’t pursuing deals in Latin America, he said.
The company based in Dubai increased container volumes at its more than 60 terminals by 7.5 percent in the first half, with its Asia Pacific and Indian subcontinent operations driving growth. While trade is growing in Latin America, Africa and Asia, the company is cutting costs in Europe, where trade is “stagnant,” Bin Sulayem said.
“I don’t see a reduction in trade but I don’t see growth,” he said. “Europe will come back. When the boom comes again, we’ll be ready for it.”
Global container volumes will probably grow 4.3 percent this year, Drewry Shipping Consultants Ltd. said July 3. Because of the weakness in Europe’s economy, the industry won’t have a strong peak season in 2012 and operators will experience some “rate erosion” in the summer, it said.
Shares of DP World traded on Nasdaq Dubai rose 0.9 percent to $11.35, bringing their advance this year to 17 percent.
DP World has no plans for an initial public offering in India, where it has brought its local container terminals together under one company.
“When we did that people said ’oh, they’re preparing for IPO’,” he said. “If it’s going to be in the interests of the company we do it. But we don’t have any plans. If things change we can always adapt.”
To contact the reporter on this story: John Quigley in Lima at firstname.lastname@example.org
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