Dubai-based port operator DP World is eyeing three sites in Russia as part of a $2 billion joint venture it signed in January, the group’s chairman said this week.
The three sites are in Vladivostok in the east of Russia, the Baltic Sea and the Black Sea – and Sultan Bin Ahmed bin Sulayem did not provide more specific details during a press conference in Dubai on Sunday.
In January, DP World signed a JV agreement with the Russian Direct Investment Fund (RDIF) to develop ports, transportation and logistics infrastructure in Russia.
At the time, Vladivostok was one of the regions to be targeted by the JV – Bin Sulayem had met Russian president Vladimir Putin there several months earlier to discuss possible investments.
The eastern port of Vladivostok is considered crucial to boosting trade with China, as the Far East superpower increasingly looks to transport products more cheaply by land to Russia and Europe, rather than by sea.
Bin Sulayem told journalists on Sunday that the JV would seek to invest the planned $2 billion among the three areas over the next 20-30 years.
He said “no financial commitments” had yet been made, but explained that the RDIF JV “would be the vehicle through which will be invest”.
“Russia is not a container market yet but we believe that with the right investment and the right management it will [become so],” Bin Sulayem said. “We are very optimistic about the Russian market.
The RDIF was set up by the Russian government with an initial $10 billion in 2011 to make equity investments in high growth sectors of the Russian economy, including logistics, healthcare, energy, agriculture and retail.
DP World is in various stages of negotiations for investments in 15 other markets, but Bin Sulayem declined to reveal full details while talks are still ongoing.
Among the targeted markets are Senegal, where DP World is hoping to ink an agreement to operate the port to anchor a new free zone being planned by the Senegalese government.
There are also plans to invest circa $1.9 billion in China – it has several investments there already – Georgia, Somalia, Madagascar and Albania.
Bin Sulayem added that the lifting of sanctions in Iran presented new opportunities, particularly as DP World looks to tap into nearby markets such as Kazakhstan to open up inland transport gateways to China.
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