Chief executive officer Marco Neelsen discusses the crucial role KBSP is playing in the development of Bahrain as a centre of trade and economic activity.
With a total area of some 765 square kilometres, the island country of Bahrain may be small in size, but what it lacks in scale it more than makes up for in economic status. According to a January 2006 report by the United Nations Economic and Social Commission for Western Asia, Bahrain boasted the fastest growing economy in the Arab world. Two years later it was recognised as the world’s fastest growing financial centre by the City of London’s Global Financial Centres Index before being named the freest economy in the Middle East, and the twelfth overall in the world, in the Wall Street Journal’s 2011 Index of Economic Freedom.
Having opened for business on April 1, 2009, and located on 110 hectares of reclaimed land, Khalifa bin Salman Port (KBSP) is ideally positioned to be the premier transhipment hub for the northern Gulf. With its deep-water berths and approach channel, KBSP is a multipurpose terminal, able to accept large oceangoing container and passenger vessels.
“With one of the most diversified port service operations within our global portfolio, we are not solely reliant on containerised traffic, however this still makes up approximately 50 percent of our business revenue,” explains chief executive officer, Marco Neelsen. “Furthermore, we are taking on an increasing amount of transhipment business, steaming mainly from the upper Gulf, and that raises the profile of Bahrain immensely. Our land based activities, conducted within our terminal facility, include the operational management of several warehouses, where we strip and stuff containers and provide loose cargo load and delivery services.”
Under the management of global terminal operator APM Terminals, KBSP has quickly evolved into one of the most modern ports in the Gulf, capable of handling container vessels with a degree of efficiency that matches or exceeds any of the world’s most productive ports.
“In offering modern, innovative services for the shipping industry of the 21st century,” Neelsen continues, “KBSP is playing a fundamentally important role in the growth of Bahrain as a whole.” Three specific things highlight this fact. First is the history of the country as a trading community. Indeed, Bahrain has existed as an epicentre for Gulf trade for hundreds of years and to this day several highly influential trading families remain globally active, while being based in the country.
Secondly is the fact that, as an island, it is absolutely imperative that Bahrain maintains well-run ports throughout the country if it is to grow. Lastly, it is the very geography of the island that places it the enviable position of being something of a half-way point between Dubai and Kuwait, right at the heart of the Arab Gulf.
Depending on the business indicators, KBSP has the ability to increase its capacity by one-and-a-half times its current level, simply by bringing in additional quay and yard equipment. This will in turn support the company’s drive towards regional growth.
“While we do not see ourselves as being in direct competition with the UAE,” Neelsen states, “we are concentrating our efforts on targeting countries in the upper Gulf, such as Kuwait, Iraq and the Eastern Province of Saudi Arabia. In doing so we aim to promote Bahrain as something akin to a distribution epicentre within the region. Indeed this is where the geography of the island plays an important role in helping Bahrain achieve its mission of becoming much more visible in the Gulf.”
Another aspect of this mission to increase Bahrain’s global significance is the cruise business. While the cruise season in Europe may be over for another year, in the Middle East it is only now entering the first stages of its yearly cycle. For its part, KBSP has confirmed that it will play host to two cruise liners per week over the coming six months. Such a development is helping to put Bahrain back on the map as a cruise destination. This understandably provides the county’s tourism sector with an added boost and really highlights the importance of the port to Bahrain’s future prosperity.
“Looking at current levels,” Neelsen says, “we are seeing an increase in container volume throughput, driven mainly by regional transhipments, while local growth continues on both the containerised and general cargo side, with projects that were previously on hold during the global financial slowdown now starting to come on-stream as the country finds its feet again. The Free Trade Agreement that Bahrain has with the United States has made it an increasingly attractive option for those businesses that are looking to engage with the US market.”
KBSP’s commitment to the growth of Bahrain as a nation can also be seen in its employment of a localisation policy. Of its 530 strong workforce, some 400 plus employees are local Bahrainis, giving the company a localisation rate of more than 80 percent, a figure that exceeds its target as set out by the government. “For our part as a terminal operator with a global portfolio,” Neelsen states, “our job is to come in and run the port effectively, while training and grooming young talent to operate the port. Achieving this is core to our commitment to the country and, as our productivity results show, we are well on the way to succeeding.”
In the long term, KBSP plans to transform itself into a centre for transhipment in the northern Gulf region. “What we want above all else,” Neelsen enthuses, “is to make as many people within the maritime world as possible take notice of Bahrain. In doing so we believe they will quickly recognise the potential this country has when it comes to serving this part of the world, and that it is from here that we at KBSP can provide the transhipment solutions that assist in a customer’s movements through the international market.”
Written by Will Daynes, research by Abi Abagun
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