Deemed one of the most prestigious projects in the Sultanate of Oman, the Port boasts the four largest shipping lines. business is booming. Both its terminals saw double digit growth in the past five years, with general cargo growing at over 20 percent per annum, despite the onset of the recession.
We spoke to the CEO Peter Ford, about the secret of Salalah's success, the company's continued growth and expansion plans, and to find out what the future has in store.
Mr Ford joined the Port of Salalah from APM Terminals, which manages the Port, where he worked for more than sixteen years. He has as a wealth of experience in the shipping industry both on vessels and in terminal management; is a graduate of both the US Merchant Marine Academy and the Lloyd's Maritime Academy; holds a BSc in Marine Transport and Business and an MBA in Global Management.
The Port of Salalah itself began operating in 1998, at what used to be Mina Raysut and developed with extraordinary speed. Its strategic location made Salalah an ideal location to tranship cargo to destinations such as the Arabian Gulf, Red Sea, East/ South Africa and the Indian subcontinent.
Now the biggest port in Oman and the second largest in the region, Salalah is thriving but the secret to its success is down to a number of different factors according to Mr Ford; location, expansion, good leadership and a pro-business environment.
All the ports in the region are competing for business, but it is Salalah that has a number of unique advantages keeping it ahead of the competition; it's main ones being its location, strong vibrant economy and its pro-business climate provided by the Omani government, Peter explains.
“We also ensure that Port of Salalah builds on its natural advantages and maintains high levels of productivity with state of the art equipment, a focus on innovation and a commitment to earning our customers.”
A new methodology is also being rolled out by the company. Lean Six Sigma has already been deemed a great success within APM terminals, its key features being to improve customer service, reduce waste and improve agility. Mr Ford added that:
“We will continue to improve efficiencies to both allow our existing customers the opportunity for consolidation and to take advantage of scale as well to attract new customers to our port.”
Tough on results
Leadership is a crucial part of the Port's success, according to Mr Ford. He believes that it is his more inclusive style of leadership that is the most effective, balancing delegation and empowerment with accountability.
“We believe that the command and control version of leadership does not work in today's workplace. The workforce is smart and they have opinions and views on the world and we should listen to the people doing the work rather than direct from the top down.
“I encourage freedom of thought amongst my managers and staff but I ensure that each one has the proper training and background as well as understanding their responsibility and accountability. I think for the most part my leadership style could be described as allowing individual responsibility but being tough on results.”
Business may be going well, but there's always room to build on the Port's success continues the company's CEO.
The key to further improving the Port's success is to build on the fantastic location that Salalah already has and expanding when it comes to distribution, according to Mr Ford.
Both the Omani government and Port Salalah agree on the way forward following the company's impressive growth to date.
“We cannot and will not rest on that advantage and both the government and the port plan to invest significant amounts in equipment, land and the ability to serve our customers.
“The vision of our business is to improve our levels of service beyond even what the current customer may desire in order to cater to the future growth they will deliver and attract new customers to Salalah.
“Between the government and Port of Salalah we have invested over $1.3bn in the current facilities. The government of Oman envisions the Port of Salalah to continue to maintain its premier position as a regional transshipment port and to also play an increasingly important role in the maritime trade of the world.”
The Port of Salalah is also committed not only to providing world-class port facilities, but also to creating new jobs within the country.
“With the continued support of the government we expect to act as a catalyst for the economic and social development of the southern region of Oman and provide career opportunities to Omani nationals.”
The secret of their success
In just one generation, Oman has become a role model for social and economic development. Ford praises the government and holds Sultan Qaboos in high regard, as he is of the opinion that both are responsible for the country's success.
“There have been numerous remarkable achievements during the 40 year reign of His Majesty Sultan Qaboos particularly in education, health, human rights and the standard of living of its citizens.
“The government has built a business friendly environment and developed a national infrastructure which has facilitated the launch of numerous major projects.
“A focus on education, investing in people and a national system that believes the people should benefit from the country's economic and social development has meant that the country has done nothing but succeed.
“I can only describe Oman as a shining star and congratulate the people on their success and his majesty on his leadership.”
Oman as a country has also a long history when it comes to private equity investment. It is considered a stable, low-risk country and Mr Ford believes that there are many industries that could benefit from setting up operations in Oman in particular.
“Clearly infrastructure in a developing country is long term and stable cash flow that is attractive to many types of investors.
“I believe Oman is an ideal fit for a regional distribution hub. This will benefit from Port of Salalah's existing development plan and strategic location. We sit at the centre of the Asia-Europe trade and north south from East Africa and the Arabian Gulf, as well as India and Pakistan, so we find ourselves at the centre of some significant emerging markets that are incredibly attractive to the manufacturers of consumer goods.”
Oman's also shares cultural similarities with the locations from which equity funds are managed, which is another benefit for those wishing to invest.
They wish to highlight and build on the benefits a world class port and free zone like Salalah can offer and also push its potential as an ideal warehousing location.
“By marketing ourselves with the Salalah Free Zone and offering attractive investment packages we believe we will attract significant interest from some of the world's major manufacturers and distributors wishing to reach these markets.”
The port has also recently joined forces with a government entity called the Salalah Free Zone to try and attract major blue chip companies to come and set up in Salalah.
Mr Ford continues, revealing that Salalah has in fact just recently been ranked as the second best warehousing location in the region by LOG Middle East.
The Master Plan
So what does the future hold for the Port? More success if the past is anything to go by. Salalah is prepared for the future and their plans are focussed on growth, innovation and a commitment to their customers.
Mr Ford explains that they've recently completed a new 20 year master plan, outlining their future campaign for development and expansion.
The plan includes immediate expansion of their General Cargo Terminal, to handle up to 40 million tons of dry bulk commodities and over 5 million tons of liquid products annually, and, when required, an expected 6m TEU expansion at the container terminal.
“The tender process is finalised for the General Cargo terminal and 1.2km of multipurpose berths with drafts of 16 to 18m and work is expected to begin in the coming months.
“This expansion will lead to additional developments of bulk and liquid handling facilities and provide space for cruise and ferry facilities at the port.”