As the Point Lisas Industrial Port Development Corporation (Plipdeco) approaches its 50th anniversary in 2016, plans are being finalised for its billion dollar, ten-year expansion plan.
Having been around for almost half century, Plipdeco continues to grow and has almost completed plans for its long-awaited expansion and modernization, said Ashley Taylor, President, Plipdeco.
Although he could not give the total cost of the project as the feasibility study is not finished, he did say for the first phase the cost would not be less than US$150 million.
"This is just an estimate. It will be done on a phased basis. The phases will be done over a period of ten years or so. After that whole horizon has been completed people will see the facility well in excess of 1 million Twenty Foot Equivalent unit containers (TEU's). But the initial phase of development will smaller than that because you do not want to put spend a lot of money on infrastructure and not have the business to be able to pay back for the level of investment. It is better to take a more cautious approach and basically and do the development based on the level of business Plipdeco has," he told the Guardian on Monday.
Taylor gave the example of the movement of TEU's in which they broke their record last year.
"At the end of 2014, we have broken the 200,000 TEU's barrier and reached 208,000 TEU's as far as containerized cargo is concerned. In 2013, it was 192,000 TEU's. Several reasons account for this. We are still seeing increases in the value of goods going through Trinidad. We have taken market share from Port-of-Spain. We have a better service that Port-of-Spain and one of the shipping lines whose hub was in Port-of-Spain has moved operations to Plipdeco," he said.
He added that by international standards, Plipdeco is considered a small to medium port but the port is quickly moving towards full capacity.
"We are approaching capacity which is about 240,000 TEU's. As far as port operations go, any time a port reaches 100 per cent capacity there will be major congestion and chaos. So once a port reached 80 to 85 per cent, the port should expand at that point," he said.
He said the company is working with Pricewaterhouse Coopers (PWC) and they are assisting Plipdeco in concluding the feasibility study for the expansion of the Port.
"This will define for Plipdeco the mode and scope of the expansion that we are proposing. Before the Government announced plans to establish a major transshipment port in La Brea, the recent announcement was the decision had been taken to forego the development of the transshipment port and focus solely on the dry dock facility for La Brea and instead consideration be given to diverting some of those resources to Point Lisas. Be that as it may, we are not necessarily going to wait for the Government to tell us that this will be provided because we already had plans on stream anyway as far as advancing our programme for expansion of the port facility. That will be done on a phased basis."
He said the feasibility study should completed in the next week or two and then they will have a formal presentation.
"We will have presentations with the relevant ministries as well and then we will be given the green light to start the process in earnest as far as having the port expansion commence," he said.
Plipdeco, which is 51 percent owned by the Government and 49 percent private sector, is the landlord of the port and a 860-hectare industrial estate with over 100 companies with some of the major ones being involved in the downstream sector, which are the manufacturers of methanol, ammonia, melamine among other products.
"T&T is the largest producer and exporter of methanol in the world and is also one of the largest exporters of ammonia. The port has continuously grown over the last decade. We are considered the second major port in T&T after the Port-of-Port-of-Spain. There is a 50/50 per cent divide between domestic and transshipment cargo but for Plipdeco it is 85 per cent domestic and 15 per cent transshipment," he said.
Taylor spoke to the Guardian on Monday at the Hyatt Regency Hotel, Port-of-Spain.
According to Plipdeco's website, the port is often referred to as the "Gateways to the Americas" catering for containerized cargo from the US, Europe, United Kingdom and the Far East. Port Point Lisas is a multi-purpose cargo facility operating on a 24/7 basis.
With its six commercial berths, the port handles a wide range of traffic including dry and liquid bulks, containers, general cargo and break bulk servicing both the individual and business sectors alike. The port also has expertise in handling project cargo, mainly for new plants on the adjacent industrial estate.
According to its website, today, the estate is home to 94 companies involved in a range of activities. The petrochemical sector is dominant, however, with many multi-national production plants operating on the estate. Ease of access to vast resources of natural gas has been a strong incentive for some of the world's leading manufacturers of ammonia, urea, methanol, other petrochemicals and steel.
Profitable 2014
Taylor said the focus during 2014 was spent improving the way they do things.
Plipdeco's financial year is the same as the calendar year which is from January to December and Profit Before Tax for 2014 was TT $7.7 million.
He said one of the major issues to impact on their bottomline was wage negotiations.
"It would have been one of our better years if not for the conclusion of the salary negotiations with the Seamen and Waterfront Workers Trade Union (SWWTU). This impacted directly on our financial bottomline but we needed to maintain a stable industrial relations environment," he said.
Restructuring in other parts of the operations softened the blow of the large wage settlement.
"Due to us being able to do cost restructuring as well such as a realignment of our tariff structure, would have reduced the overall impact on our profitability. In October last year we rationalized out tariff structure which is the handling of containers and storage of containers," he said.
In 2014, Plipdeco also commissioned a new harbour crane which is a part of their phased replacement programme for their aging equipment infrastructure purchased at the cost of US$4 million.
Given international organized crime and contemporary threats like international terrorism, he said Plipdeco has invested in security cameras and other modern safety devices to protect operations at the port.
"Ports around the world are generally susceptible to illegal activities like transshipment of drugs or possibility of attacks. From a security perspective we must have an eye on what is going on. We embarked on a comprehensive programme outfitting the major parts of the port with CCTV cameras. The port has about 150 cameras strategically located on the compound," he said.
He said one of the Plipdeco's major achievements is their attempt to develop their own technology and technical skills of their employees.
"The installation of the cameras were done in house. During 2014, we ran a major fibre optic link between the ports and Plipdeco's head office. That enables a direct connection for transfer of the data between both locations. This will also diminish our dependence on companies like TSTT which eventually reduce our cost. The majority of work was done in house by our IT personnel," he said.
Future Plans
Taylor said in 2015, the company plans to focus on strategic initiatives on how Plipdeco can re-invent itself and diversifying away from simply being looked at as a "port."
"We are in the process of completing a new three year strategic plan which will be completed by the end of the month."
He said Plipdeco is looking at starting additional services to customers.
"We have launched our demurrage and detention services for shipping lines. Traditionally a service like this would be provided by private sector companies. We have realized the benefits of us providing that service for shipping lines. Not only from a revenue perspective but from the perspective of a suite of services we can offer," he said.
He added that the software for the demurrage and detention service was developed by Plipdeco.
"This is an area that we are looking at developing in the long term to the extent that we have two Caribbean ports who have expressed an interest in procuring this software. Part of our long term vision is not just as an industrial estate and land lord of just a port, we want to see ourselves as more as a logistics services provider," he said.
He regrets Plipdeco not being able to get into value added services in the past for the 100 tenants presently on the estate.
"There are 25 or so pretty large tenants that are involved in major manufacturing and heavy industries. The remainder of the tenants provide services for the larger tenants. We want to now provide them with a range of services whether it is from receiving the cargo for them, storing for them and ultimately distributing for them. Right now we are in the process of doing the relevant feasibility studies to see what are the suite of services that we could provide for them," he said.
He said Plipdeco is also looking at the possibility of providing bunkering services for vessels that come to Trinidad.
"We want to be able to facilitate that while the vessel is berthed and cargo operations are ongoing, we want to be able to receive bunkering services while being tied up. Bunkering operations can take up to six to eight hours so if a shipping line can do both operations simultaneously, one can imagine over the period of a year how much time ships can save which will go their bottom-line. This is seen as a potential revenue stream for us by partnering with the right partners," he said.
There are also plans to modernize infrastructure at the port, which Taylor described as being "costly."
"One of the big projects that we are doing is the rehabilitation of our berth infrastructure as well as our storage base. The berth repairs have already started. We are also going to acquire new equipment like six new yard trucks and one empty container handler. To acquire one empty container handler costs US $300,000 and cost of one truck is roughly US $110,000 ," he said.