DP World, the Dubai-based global port operator, is set to develop a new edible oil terminal at the Port of Berbera in Somaliland. The facility is expected to reduce supply chain costs and create local jobs. DP World has already agreed to a long-term lease for the terminal.
With an initial storage capacity of 18,000 tonnes, the terminal will be able to service vessels with a draught of up to 16 meters, enabling Berbera Port to handle bulk imports of edible oil for the first time.
The new edible oil terminal at the Port of Berbera is a specialized facility designed to store, handle, and distribute various edible oils, such as vegetable oils like soybean oil, palm oil, canola oil, sunflower oil, corn oil, olive oil, and cottonseed oil, animal fats like lard and tallow, as well as specialty oils like coconut oil, sesame oil, and peanut oil.
The ability to import oil in bulk and package it locally will make edible oil more affordable for people in the region and create jobs locally.
The facility is already fully leased long-term to Mzahim Investment LLC, a subsidiary of Essa Al Ghurair Investments (EGI) of the United Arab Emirates. Mzahim Investment will also develop a local packaging plant in Berbera to supply existing customers in Somaliland and the wider Horn of Africa, which could employ up to 100 people.
In collaboration with the Government of Somaliland, DP World recently inaugurated the Berbera Economic Zone (BEZ), a promising trade center in the Horn of Africa, to complement the Port of Berbera. The BEZ will replicate DP World’s Jebel Ali Free Zone in Dubai. Spread over 1,200 hectares, the BEZ’s Master Plan aims to enhance the zone’s capacity as required.
DP World and UAE-based food company IFFCO have already agreed to develop a 300,000 sq. ft. plant for edible oil packing. A dozen other firms from different industries have registered their interest. The BEZ is situated on the Berbera-Wajaale road, 15 kilometres from the Port of Berbera, connecting to Ethiopia’s capital, Addis Ababa.
Suhail Albanna, CEO and Managing Director of DP World Middle East and Africa, said that the development of the edible oil terminal is a game-changer for the region and is another example of how they are reducing the cost to trade by finding solutions that meet the needs of their customers while having a positive impact on local communities in terms of job creation and easier access to goods.
Essa Abdulla Al Ghurair, Chairman of Essa Al Ghurair Investments, said that having a facility in Berbera will continue to strengthen its business ties with the region. He added that the Berbera edible oil facility would allow them to manufacture locally, ensuring essential commodities such as edible oil are affordable and freshly available to the locals.
DP World plans to transform Berbera, which sits alongside one of the world’s busiest sea routes, into an integrated maritime, logistics, and industrial trade hub to serve the Horn of Africa, a region with more than 140 million people. The World Bank estimates the volumes handled in the Port of Berbera are expected to increase from 3.0 million tons in 2016 to 18.1 million tons in 2050.
DP World signed a $442 million agreement with the government of Somaliland in May 2016 to operate a regional trade and logistics hub at the Port of Berbera. The Ethiopian government purchases a 19 percent stak in Somaliland’s Port of Berbera in March 2018. However, in June 2022, Somaliland Finance Minister Saad Ali Shire said that Ethiopia had lost its shares over its failure to fulfill the conditions required to complete the ownership deal, which included financial contributions for the construction of the port. The 2018 contract stipulated that DP World said it would retain a 51 percent stake in the port, and Somaliland would retain 30 percent.
DP World’s deal with Ethiopia came a week after neighbouring Djibouti ended its contract with DP World to run its Doraleh Container Terminal. The port operator has called the move an illegal seizure. Djibouti was directed to pay $54 million annually following the London Court of International Arbitration’s ruling, which found the nation guilty of neglecting to return the Doraleh terminal to DP World. The arbitrators ruled in favour of DP World and its affiliate, the Doraleh Container Terminal, awarding them $200,752,000 in damages due to the lack of access to the Djibouti-based terminal.
Muse Bihi Abdi, President of Somaliland, Sultan Ahmed bin Sulayem, Group Chairman and CEO of DP World, and an Ethiopian government delegation led by Ahmed Shide, Minister of Finance, and Dagmawit Moges, Minister of Transport, officially inaugurated the new container terminal in Berbera Port on June 24, 2021. Berbera’s new terminal will increase the port’s container capacity from 150,000 Twenty-Foot Equivalent Units (TEUs) to 500,000 TEUs annually. Somaliland’s port also provides some transport links for neighbouring Ethiopia, a landlocked country with friendly relations with the breakaway region.
