Interview: Soren Hansen, CEO, Aqaba Container Terminals
A long list filled with descriptions of infamous battles pops up on my screen when I enter the name ‘Aqaba’ into a search engine. Taking a deep breath, I scroll down the list from the start of the Jordanian city’s colourful 6000-year history.
I see a list of conquests by Edomites and then Arab Nabataeans, a roughly 500-year period of Roman rule starting in 106 AD and ending with defeat to a flourishing Islamic Empire under the then Caliph Umar ibn al-Khattab. Further down is a brief reign by the Crusader armies in the 12th century, before recapture by the famed Islamic general Saladin.
Near the end of the list lies the Battle of Aqaba, a 1917 First World War skirmish that saw the involvement of a certain Lieutenant Colonel Thomas Edward Lawrence – better known as ‘Lawrence of Arabia’.
But, in spite of the wars – or perhaps because of them - the city of Aqaba and its port have flourished. It was a war after all, which prompted the Jordanian hierarchy to tender out the management of the port in 2004 to its current handlers APM Terminals, part of the Danish AP Moller-Maersk Group.
The surge of cargo volumes brought on by the start of the US and her allies’ ‘war on terror’ in Iraq in 2003, reportedly brought the port to a standstill, as too many containers were being pushed through its facilities. A tender was put out soon afterwards; APM were nominated as the preferred bidder and took over the management of the port – a 25-year contract – the following year.
Then in 2006, a joint venture between APM terminals and Aqaba Development Corporation was established to form the operating subsidiary, Aqaba Container Terminals (ACT) – making APM Terminals both management and partners in the port.
“What we saw then was, as we see today, a phenomenal opportunity,” reveals ACT CEO Soren Hansen, when I ask him about the reason for APM’s initial interest in the port. “There are very few geographic or natural gateways, if you will, to main markets, but Aqaba is one of them. It’s at the end of the Red Sea and historically, I mean it goes back to the old Silk Road.
“Historically, for many decades and centuries, this here has been a natural gateway to the wider Levant region. And that’s what we’re building on. So, why are we attracted to it? We’re attracted to it because it’s a great location,” he adds.
And it is the location and the ease of access Aqaba provides to the growing economy of Iraq that the company wants to promote. Iraq is on the mend and commodities are needed. Earlier this year the country’s deputy central bank governor, Mudher Kasim, announced he expected Iraq’s GDP to jump to $360 billion from its current $170 billion in the next four years – maintaining its average 9.4 per cent yearly growth.
And so, ACT has decided to travel to different countries around the world to promote its ‘gateway to Iraq’. Goods arriving in the Aqaba port can reach Iraq, via truck, within 48 hours, it claims. “We want to meet those end customers that are the ones to place the order when they need to bring a container in or to ship a container out. And we want to reach out to them so that they are aware that we are offering a competitive product,” says Hansen.
“It could be that there are people in Dubai doing business in Iraq, investing in Iraq, not knowing that there is a competitive gateway through Jordan for their cargo. That’s one of the aims.
“The other aim is also to bring together people who are keen to learn more about Iraq. We believe that there’s a phenomenal market, for our business at least, and to bring these people together and introduce our proposition to them. And we know that the Iraqi community is spread over many different places: Dubai, in Jordan and also in China. So, we’ll go and meet them where they are to introduce our proposition.”
But while the CEO, who was appointed in January 2011, feels at ease now, he reveals the first year in the job was “tough”. It was, after all, a Middle East working debut for the Denmark-born Hansen and it couldn’t have come at a more eventful time – right in the middle of the ‘Arab Spring’.
“Tough and fun,” adds Hansen with a smile. “It’s been tough in many ways, because we have also seen challenges. We have high aspirations, very high aspirations, and we’re very competitive, so we make sure that the product that we’re selling is also what we’re delivering.
“I’ve worked in various different places around the world, but it’s my first stint in the Middle East and I’ve been very warmly welcomed by people in Jordan.
“But, it also happened that I arrived just as the Arab Spring was starting up, so I was a little bit concerned about being in the region; what I realised very quickly, though, is that Jordan is a safe place, relatively speaking, compared to other places in the world.
“Of course, there are also people in Jordan that, should we say, are now also voicing their frustrations. But, what I see is the commitment from the king all the way through to the authorities, to deliver reforms and make sure that Jordan is a sustainable place to do business and a good safe place to live and work.
“The Arab Spring has been around and we’ve, touch wood, we’ve managed to stay away from trouble. We’ve not had any interruptions to work. We’ve had a few external factors with a few trucker strikes here and there, but all things being equal, Jordan has been a safe place to work and a safe place to do business in 2011, and that’s why we believe we have a very competitive gateway to Iraq.”
But, despite the external distractions, ACT’s end-of-year figures for 2011 show double-digit growth in all sectors. The port experienced a total growth of 16.5 per cent, export growth of 13.6 per cent, import growth of 19.1 per cent and reefer growth of 17.9 per cent.
Hansen, however, explains that to achieve these levels and be able to market the attractions of the Aqaba port, a process of rebuilding had to take place.
“I wanted to make it a sustainable company - today, tomorrow and beyond. But, it was obvious when I joined that the volumes that we had in 2010 were not good,” he says. “It actually dropped instead of increasing, because of the instability in Iraq. We lost market share in Iraq in 2010. And being of a competitive nature, I wanted to regain that, and that’s what we did. So, we built up a new commercial team, and we’ve now built up, and are still building up, our reputation in Iraq. Now, I think we have a phenomenal product to sell.
“We are going through an expansion phase right now as we have done since 2006. We’re investing up to US$250 million in this facility. So financially, we are committed to this very strongly. The figures that regiment in terms of the growth of the businesses are also telling a very clear story. We are growing our business and that’s, I think, because of the product that we deliver, because of the committed people that we have working here for us and because of the location that we have.
“In 2011, transit cargo increased by 63 per cent, and we expect to take this growth even further in 2012. We have also taken steps to modernise the existing equipment and operations over the last few years, while also embarking on a major expansion of our berth. This means that the volume of cargo we are able to handle is increasing, whereas the time it takes us to process our cargo is decreasing. That is why we are seeing more and more businesses in Iraq and Saudi Arabia now viewing Aqaba as a long-term, sustainable element in their supply chain.”
A quick calculation from my list of Aqaba battles reveals that, statistically speaking, the city is only due to see another war in 500 plus years. So, if you are of a superstitious nature, the omens for another period of flourishing trade at the port are good for generations to come.