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Kuwait Shipping Report Q1 2011
Business Monitor International, Dec 2010, Pages: 93
Business Monitor International's Kuwait Freight Transport Report provides industry professionals and strategists, corporate analysts, freight transportation associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Kuwait's freight transportation industry.
Throughput at Kuwait's largest port, Shuaiba, is on course to reach BMI's throughput targets for 2010, posting a small growth in the year after not being able to beat the global downturn in trade in 2009 with tonnage at the facility falling by 10.15% y-o-y and container volumes decreasing by 9.52% y-o-y. This offers a sound base for BMI's forecasts for port throughput at Shuaiba for 2011 and for the rest of the mid term.
We predict that port's tonnage will reach 25.8mn tonnes in 2015, increasing by 27.3% on the projected 2011 handling figure. Container volumes for the same period will increase by 26.8% to reach 144,588 20-foot equivalent units (TEUs) in 2015.
Headline Industry Data
- 2011 port of Shuaiba tonnage throughput forecast +2.2% following projected growth of 1% in 2010.
- 2011 port of Shuwaikh container throughput forecast +2.9% following projected growth of 0.6% in 2010.
- 2011 total trade growth forecast at +1.57%.
Key Industry Trends
Design Auditor and Construction Supervisor for Bubiyan - URS/Scott Wilson is going to provide design audit and construction supervision for the US$1.2bn first port contract of the new commercial sea port development on Bubiyan Island, according to TradeArabia News Service. The company won a four-year contract and will be reporting to country's Ministry of Public Works.
Mubarak Al-Kabeer To Become the Top Container Port - Kuwait's Mubarak Al-Kabeer port, part of a wider development on the island of Bubiyan, is expected to receive nearly 1.8mn containers per year by 2015, according to Adel Al-Turki, undersecretary for the major projects department of the Ministry of Public Works. BMI believes that Kuwaiti plans to develop Bubiyan Island into an economic free zone and port will enable the Gulf state to capitalise on the huge potential rewards to be found in Iraq and Iran. The port development will provide upside potential to our current forecasts. More Ports for Fishing, Recreational Usage and Ferries - Consultancy and engineeri ng firm DHV is currently developing plans for nine ports in Kuwait. The project, commissioned by the Kuwait Ports
Authority, embraces the redevelopment of three existing ports in Kuwait City, in addition to six new facilities along the 300km long coastline. DHV's partners on this project are Dutch consultancy KuiperCompagnons and local company SIEF Engineering Consultants.Locations for the new ports are to be identified as a result of the negotiations with the Kuwaiti government.
More Vessels at Shuwaikh and Shuaiba - The most recent data indicate growth at the ports of Shuwaikh and Shuaiba, according to Kuwait News Agency. Kuwait Ports Authority announced that the movement of ships in July 2010 increased to 205, or by 4%, compared with the same month in 2009. The throughput of incoming and outgoing containers amounted to 70,468 in July. Iron imports continued it rise for the fifth month in a row, reaching 59,590 tonnes during the month while pipe imports also increased in July.
Risks To Outlook
There is potential upside risk to BMI's throughput forecasts as a result of Kuwait's economy, with BMI's country risk team holding the view that the 2010 spike in oil prices bodes well for BMI's positive stance on Kuwait. We forecast Kuwait's budget surplus to remain elevated in FY10/11, coming in at 14.9% of GDP. With total trade expected to grow in the real terms in the mid-term, we expect it to have a positive impact on the throughput at the country's ports.
Potential downside risks to our throughput forecasts come in the form of the exposure to oil price volatility and a slowdown in global demand. Despite the broadly healthy picture of Kuwait's public finances, high reliance on oil, which accounts for 94% of total revenues, exposes the budget and, consequently, trade to oil price volatility.
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