Hapag-Lloyd invests in growing East African Market

Hapag-Lloyd container shipping line is significantly growing its import and export in the East African region, where it handles massive investments.The firm recently announced that it will continue to focus on the growing market in East Africa, which has a great potential.

With annual growth rates of approximately 6%, it said that the region tops the list on the African continent. Kenya, in particular, is progressing along its successful course – with significantly rising import and export figures, as well as massive investments in public infrastructure.

According to the 2018 African Development Bank East African Economic Outlook report released in Q1 this year, the overall economic performance of the growing East African Market is expected to grow to 6.2% in 2019, from 5.9% in 2017.

With its East Africa Service (EAS), a weekly service from Jeddah to Mombasa and Dar es Salaam, Hapag-Lloyd is connecting these African countries to markets in the Far East, Europe, North America, Middle East and India. Via both ports, Hapag-Lloyd also offers transports to East African hinterland locations of Bujumbura (Burundi), Kigali (Rwanda), Lubumbashi (Democratic Republic of Congo), Lusaka (Zambia) and Kampala (Uganda).

“I am delighted that our EAS service from and to Kenya is developing so positively. After only four months in operation, we have significantly expanded our business with overall vessel utilisation beyond our expectations,” says Dheeraj Bhatia, Managing Director Africa, Middle East and Indian Subcontinent for Hapag-Lloyd AG. “With our East African Service, which links Saudi Arabia with Kenya and Tanzania, we have entered a new trade with which we optimally connect East Africa to our global network. The booking development is extremely pleasing and shows the great economic potential of Kenya,” the management stated.

With the entrance of Hapag-Lloyd and improved capacities at the ports of Mombasa and Dar es Salaam, and a highly improved ease of doing business across the EAC (East African Community) region, trade costs are likely to reduce and there will be increased participation of EAC states in trade with the rest of the world. The weekly EAS service sails from Jeddah to Mombasa, and from there to Dar es Salaam, in Tanzania, as well as from there back to Jeddah.

Hapag-Lloyd is among the world’s largest container shipping lines, which was founded in 1847 in Hamburg. The shipping firm facilitates world trade with its more than 220 ships across the various continents in Europe, North America, the Middle East, India as well as the Far East.

The owners of Hapag-Lloyd are CSAV (25.8%), Klaus Michael Kühne (incl. Kühne Holding AG) and Kühne Maritime GmbH (25.0%), HGV Hamburger Gesellschaft für Vermögens- und Beteiligungs management mbH (13.9%), Qatar Investment Authority (14.5%), the Public Investment Fund on behalf of the Kingdom of Saudi Arabia (10.2%), plus a free float of 10.6% (percentages have been rounded-off, and the free float includes institutional shareholders with a shareholding of less than 5%). Its customers are either global forwarders like DHL, Schenker, Kuehne and Nagel – and/or shippers like multinational companies or local businesses.

Hapag-Lloyd boasts of a transport capacity of 1.6 million TEU (Twenty Foot Equivalent Units), as well as a container stock of more than 2.3 million TEU, including one of the world’s largest and most modern reefer container fleets. A total of 120 liner services worldwide ensure fast and reliable connections between more than 600 ports on all the continents.

With its recently opened East Africa Service (EAS), a weekly service from Jeddah to Mombasa and Dar es Salaam, Hapag-Lloyd is connecting these African countries to markets in the Far East, Europe, North America, Middle East and India – and already has around 100 clients.

Hapag-Lloyd has established local representations in Kenya, Tanzania and Uganda – through Diamond Shipping Services Ltd. This will enable them to provide a wide range of hinterland connections, such as Bujumbura (Burundi), Kigali (Rwanda), Lubumbashi (Democratic Republic of Congo), Lusaka (Zambia) and Kampala (Uganda).

For Hapag-Lloyd, Kenya is open for investments, has a reliable legal system, good growth rates, and a key country for doing business within East African markets. The EAS service from and to Kenya has developed very positively, and Hapag-Lloyd could significantly expand the business with an overall vessel utilisation beyond expectations increasing volumes, sustainable rates and trade growth – leading to better balanced import and export numbers.

Source: African Strategic-Ventures (ASV) & Capitalfm.