Unifeeder, a fully owned subsidiary of DP World, has announced the acquisition of a 77% stake in Feedertech Group, enabling it to expand its feedering and short-sea services into Asia, the Indian Subcontinent and the Gulf trades.
The deal, which is expected to close in Q1 2020, is the latest step in DP World’s strategy to build end-to-end logistics capability to serve the needs of shipping lines and cargo owners.
Based in Singapore, Feedertech operates an independent feedering service as well as Perma, a regional shortsea network, with both connecting Asia to the Middle East via the Indian Subcontinent.
DP World’s strategic objective was to create additional value by using Unifeeder’s management expertise to replicate the asset-light model in other regions, and the Feedertech Group transaction is seen as the first stage of this value creation process.
Feedertech calls at 50 ports, generating a combined revenue of around US$200m from a diverse customer mix and transporting more than 600,000 teu annually.
Sultan Ahmed bin Sulayem, group chairman and CEO of DP World, said: “The acquisition of a stake in the Feedertech Group is another strategic step in our vision to build an end-to-end logistics capability and offer an integrated service suite that also engages end-customers and traders across the while optimising operations.
“Furthermore, it offers us exposure to the fast-growing coastal shortsea trade in the Indian Subcontinent, which is highly complementary to our existing India logistics strategy. The next and imminent stage of this development will be to launch a dedicated and efficient India-Gulf region service, which is an important route for our customers.”
Acquired by DP World in 2018, Unifeeder, is an integrated logistics company with the largest feeder and growing shortsea network in Northern Europe with connectivity to approximately 100 ports.
Through Feedertech and Perma, Unifeeder will have the capability to offer feedering and regional shortsea connectivity in Northern Europe, the Mediterranean, North Africa and now Asia and the Indian Subcontinent.
Ali Maghami, founder and chairman of Feedertech, said: “We believe the transaction with Unifeeder with the support of DP World, will allow us to take the business to the next stage of its growth.
“Both Feedertech and Unifeeder share similar business models and a desire to reduce inefficiencies, and by combining the expertise of the two entities, we believe we can deliver a high-quality product for our customers.”