DP World UAE Region, the leading smart trade enabler, has signed a 30-year lease agreement with the Middle East and Africa’s largest chemical distributor, Petrochem Middle East (PME) in order to expand its business in the region.
Petrochem Middle East will invest between $80 million to $90 million for developing a chemical terminal on Quay 7, which is adjacent to Jebel Ali Port’s dedicated chemical handling dock.
The agreement was signed by Mr. Sultan Ahmed Bin Sulayem, Group Chairman and CEO of DP World, and Mr. Yogesh Mehta, CEO of Petrochem Middle East, in the presence of Mr. Abdulla Bin Damithan, CEO & Managing Director, DP World – UAE Region and Jafza.
“The UAE and the Middle East region for years have been recognized as a thriving hub for the petrochemical industry. Despite the highly unstable market due to the pandemic, for 2020, the GCC’s chemical output expanded by 1.5 percent compared to a global decline of 2.6 percent. These figures showcase the resilience of the sector and the potential it has. Our partnership with Petrochem Middle East and our long-standing relationship with the company is further proof of the burgeoning sector. The petrochemical industry is a priority sector for the country and the region. Whereas Jafza, due to its location, is a strategic access point to the Middle East, Africa, and South Asia, contributing around 70 percent of the UAE’s foreign trade in petrochemical products.”
The facility, which is set to open in the third quarter of 2023, will supply chemical raw materials in significant quantities to both existing and innovative sectors in the UAE. The terminal will have a capacity of about 40,000 CBM for the storage of various products and will also be equipped with distillation and processing units.
Mr. Yogesh Mehta said, “Since our inception in Jafza, we have had the privilege of having an ideal business environment that has truly added to our growth figures. Today, our annual turnover is over $680 million (AED2.5 billion) and with the new project, we are expecting short-term and long-term gains of about 10-15 percent of our investment. Our existing state-of-the-art Jebel Ali terminal has helped us strengthen the portfolios of our clients while helping us offer prompt logistics services and specially blended quality products.”
“As quality is our key area of concern, our terminal adheres to the strictest of health and safety norms and is also environment friendly. We owe part of our success to Jafza as it has helped us position ourselves as the largest independent chemical distributor in the Middle East and the 11th largest in the world. We are certain that the agreement will bring about a positive shift in the industry that is known for its rapidly changing regulations, new introductions of technology disruptions, and evolving customer demands,” Mr. Mehta added.
With this project, Petrochem proposes to construct 24-30 bulk chemicals storage tanks of different sizes large and small, and some stainless-steel tanks with a total capacity of 40,000 m3. It also comprises a day tank farm, tanker and truck loading facility, nitrogen generation plant, and automatic drum filling machines, as per the company.