Fertiglobe, AD Ports partner to explore supply chain opportunities

AD Ports Group has partnered with Abu Dhabi-listed fertiliser maker Fertiglobe to explore logistics and supply chain opportunities for storing and shipping urea and ammonia at ports in Egypt and the UAE.

The two firms agreed to explore opportunities to leverage AD Ports’ cargo handling and storage infrastructure as Fertiglobe strengthens its urea and ammonia storage and shipping capabilities, reduces its greenhouse gas footprint, and enhances operational efficiency.

“Through this MoU, we will identify compelling opportunities across our logistics and supply chain management requirements, enabling us to bolster our ability to store and ship urea and ammonia from Egypt and further optimise our logistics’ cost structure,” said Ahmed El-Hoshy, the CEO of Fertiglobe.

Fertiglobe seeks to further optimise its logistics’ cost structure, targeting $50m in recurring annualised cost savings by the end of 2024, by capitalising on AD Ports’ robust supply chain capabilities and sustainable modes of inland transportation.

“We are pleased that, by leveraging our integrated portfolio and extensive infrastructure and supply chain expertise, Fertiglobe can strengthen its urea and ammonia storage and shipping capabilities,” said Juma Al Shamisi, managing director and Group CEO of AD Ports Group.

The two entities seek to explore opportunities in other geographies and develop supply chain solutions for green ammonia, a hydrogen carrier, with Fertiglobe’s existing operations strategically located near key shipping routes.

AD Ports’ growth prospects

Meanwhile, AD Ports reported a 66 per cent year-on-year (YoY) rise in first-quarter revenue, driven by volume growth in key sectors, business diversification as well as local, regional, and international expansion both organically and through mergers and acquisitions (M&A).

The shipping and logistics group’s revenue in the three months to June 30 reached Dhs2.1bn, from Dhs1.2bn in the same period a year earlier.

AD Ports attributed the growth in its revenues to its maritime, digital, and ports clusters portfolios with 208 per cent, 26 per cent, and 22 per cent YoY, respectively.

The company’s earnings before interests, taxes, depreciation and amortisation (EBITDA) reached Dhs686m in the second quarter of the year, up 29 per cent YoY with an EBITDA margin of 33.3 per cent for the quarter compared to 38.5 per cent in Q2 2022.

Read: How AD Ports’ logistics cluster is supporting global trade