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DP World to Expand in Latin America, Africa, Chairman Says

March 24 (Bloomberg) -- DP World Ltd., the world’s third-largest port operator, wants to expand in Latin America and Africa as the cost of investment in the U.S. remains high, the Dubai-based company’s chairman said.

“We are well placed in Latin America,” Sultan Ahmed bin Sulayem said in a March 22 interview with Bloomberg TV. “There are other markets we would like to go to. We do negotiate with certain countries in Latin American to acquire ports.” He declined to specify which countries.

DP World, which operates more than 60 terminals in six continents, said March 7 it made $249 million from asset sales in Australia, Europe and the Middle East. The company said it is selling stakes in two container terminals and a logistics center in Hong Kong for $742 million as part of a reshuffle of assets in favor of fast-growing emerging markets.

The company avoids investing in transit terminals, preferring container ports that service local markets, bin Sulayem told Al Arabiya TV today. Investments in transit terminals is riskier because shipping companies could choose another point for the transshipment of containers, he said.

The port operator posted a 21 percent jump in 2012 profit last year. Gross container volumes rose 2 percent to 56 million twenty-foot equivalent units during 2012, while consolidated throughput increased 1 percent to 27 million TEUs.

Growth came from the Middle East, Africa, Latin America, and part of the Far East, bin Sulayem said in the interview with Bloomberg. DP World didn’t’ see “that much growth still” in its European business, he said.

Fuel Cost Concerns

For 2013, there are “uncertainties in the market,” including concerns about fuel and energy costs needed to run the operation, bin Sulayem said. “All I can only talk about are the first two months of this year, which we did exactly according to what we expected. The rest of the year, we have to see.”

DP World isn’t expanding into the U.S., the world’s largest economy, as the cost of investment in ports deters the company, bin Sulayem said. “So far, we haven’t seen a feasible project in the States for us. It is very expensive to invest in the U.S.”

The company is confident about the European economy, bin Sulayem said. “Europe is going to come back.”

To contact the reporter on this story: Francine Lacqua in London at flacqua@bloomberg.net

To contact the editor responsible for this story: Andrew J. Barden at barden@bloomberg.net

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