As one of the UK’s leading
ports and logistics services provider, PD Ports is headquartered in the North East of England and operates domestic port services at Teesport, Hartlepool, Humberside, the Isle of Wight and Felixstowe. The company operates as part of the Babcock & Brown Infrastructure Group, and is currently the third largest port business in the UK by volume. Handling over 40 million tonnes of cargo a year, it represents approximately nine per cent of the country’s trade in goods.
Despite holding such a strong position in the market, the company is currently feeling the affects of the ongoing financial crisis. Group development director at PD Ports, Martyn Pellew, explains how the downturn is affecting the ports industry, particularly in containerised cargo: “The UK ports are a very good indicator of the overall level of the economy, as 95 per cent of everything we need in this country is imported by sea. Most UK ports are down ten to 20 per cent in volumes, which is a significant drop, and areas such as car imports have been heavily affected because consumers are reluctant to spend money on luxury items. This has also affected retail, and there has been a decrease in the number of white goods and high electronic value items like flat screen TVTVs, mobile phones and PCs coming into the country too.”
PD Ports also handles bulk cargo, and it has traditionally been a key player in transporting goods for the chemicals sector. Martyn discusses how operations here have also felt the impact: “Downstream requirements for products such as plastic bottles or paints have decreased, and this has led to the partial or full closure of a number of plants in the Tees Valley area. Dow Chemicals, Croda, Artenius and Elementis are all companies that have announced closure plans for plants here, and this means there is less export of manufactured goods taking place. Because our natural traffic sits at a ratio of approximately two to one exports to imports, we have seen a large dip in activity here too.”
Whilst the crisis has indeed brought many challenges to PD Ports, there have also been several positive developments in the area recently that will alleviate some of the pressure of the economic situation. One of these is a new import centre constructed by Tesco, which opened in August. Martyn highlights the benefits that the new centre will bring: “This is a 1.2 million square foot facility that will create 800 new jobs – making it the largest single job creation project in the North of England this year. As one of the company’s largest single investments ever, it will allow Tesco to deliver to its retail outlets and regional distribution centre (RDC) network across the North of the country by use of a Northern port.”
Another important venture taking place that will increase business for PD Ports is at Hartlepool, where a leading subsea cables provider, JDR Cables, has set up a manufacturing facility. The 100,000 square foot site is designed specifically for the production of subsea power cables for the offshore renewable energy market. Martyn elaborates upon the advantages of the project: “We carry out a lot of work in the renewable energy sector, and this is an increasingly important market. Both the current UK Government and its Tory opposition are committed to meeting international targets on CO2 emissions. This country is looking at new energy sources, moving away from fossil fuels to alternate options, such as liquefied natural gas (LNG), or wind power. There are a considerable number of offshore wind farms being built or planned at the moment, and we will increase our custom with companies like JDR Cables who work heavily in this market.”
The expanding market for wind energy in particular will continue to provide new opportunities, according to Martyn: “There are Government plans in place that will focus upon round three of the wind farm markets, which refers to the units furthest out to sea in places such as the Dogger Bank. The initiative will be setting a target for 30 per cent of all UK energy to be produced by renewable energy sources within the next few years. It will therefore involve the creation of 25 gigawatts of capacity around the seas of England and a further eight around the seas of Scotland.” PD Ports is ideally situated and well equipped to provide for growing demand in this sector, as he continues: “Not only are we located near some of the windiest parts of sea in Europe, but we also have the right port facilities to load such large items. A large wind turbine can weigh upwards of 500 tonnes, and so very powerful lifting gear is required. They also need a lot of space, both for the storage and assembly, and our port at Hartlepool is wide and deep enough to meet such demands.”
Renewable energy is key to PD Ports’ agenda, and another project that will further increase business for the company is the construction of a new wood-burning power station on Teesside by MGT Power. Using biomass of wood chips to produce 295 megawatts of electricity, this facility will be completed by 2013, and will increase both employment and cargo traffic in the area.
The future for PD Ports continues to look optimistic, and the company has recently secured planning permission for the construction of a deep-sea container terminal, the Northern Gateway Container Terminal (NGCT), in order to further consolidate its growth. This is a £300 million investment that will enable shippers to save up to 40 per cent on delivering Northern UK cargoes by cutting down on road miles. Martyn concludes: “Whilst the financial crisis has slowed business down, it will not last beyond next year. In the meantime, developments like the Tesco import facility or the MGT Power biomass station will help drive increased demand for containers and traffic going through the port. We also have the Government’s short term decisions on wind energy to wait for, and once these are made we will certainly have some excellent prospect for 2011 onwards.”
Services: Port and logistical solutions