PD Ports

Source: Exec Digital UK

Date :10/12/2007 10:08:13

A leading UK ports business, PD Ports sees scope for growth, which will include the development of two major new projects. ExecUK spoke to Group development director, Martyn Pellew

Written by Rebecca Waters and produced by Mark Skillicorn

Over the last few years, PD Ports has been working to change the basic structure of its business in order to obtain an improved balance. “I’ve been here five years, during which time we have changed the strategy of the business quite significantly,” explains Martyn Pellew, group development director.

According to Pellew, this change and flexibility to the market is needed. Although the company’s main cargo is its oil and gas business, in 2007 it welcomed the much anticipated arrival of the first liquefied natural gas (LNG) vessel at Teesport.

This marked the commissioning of the world’s first ever dockside regasification port facility. This facility allows LNG to be revapourized onboard the specially designed vessels before being fed into the National Transmission System. In the longer term, Pellew adds, the company is looking at newer energy sources including bio fuels, liquid natural gas and ways of extending the life of oil and gas fuels in the North Sea, improving the quality, which has not accessible in the past.

This streamlining has also been seen in the corporate structure of the business. Over the past eight years, the leading ports and logistics business has seen restructuring of its corporate ownership four times, five since 1992 when it was privatised by Margaret Thatcher, to its present ownership under Australian global advisory and investment firm Babcock and Browne Infrastructure Ltd who acquired the company in January last year for a value of £556 million.

Supply chain

As well as its operations at Teesport, a major deep sea port on the North East Cost of England, PD Ports owns and/or operates in ports on the Humber estuary, the Rivers Trent and Ouse and Medina Wharf, on the Isle of Wight. The company also has a separate logistics business - PD Logistics - to support its port operations.

“Although this is a port business we recognise that we are part of an international supply chain,” an industry Pellew is well experienced with, working principally in the logistics and rail sectors before joining PD Ports in 2002. “The port is about a strategy. We recognise our existence is entirely dependent on whether there are goods to import or export for the area to succeed. It is important for us to play a wider role rather than just operating the port.”

The business itself takes every opportunity to capitalise on these opportunities, for instance in terms of steel, the firm’s main cargo, the company exports to places such as Korea, Mexico and Italy to be processed into things like ships and containers, a term Pellew calls “international-bashing.” As well, it is functional in the emerging markets of Eastern Europe, and offers direct services from Teesport to the Middle East, Africa and the Far East.

Improving ports

Owning 925 hectares, 85 percent of which is freehold land - primarily located at Teesport, PD Ports has an extensive property portfolio, which it aims to increase over the next few years. Recently the company has moved closer to obtaining the rights to build ‘The Northern Gateway,’ a new £300 million deep sea container terminal at Teeside which it hopes to get full approval for by Christmas this year, generating a possible 5500 jobs within the local area.

However, as Pellew concedes, obtaining the planning for the new port hasn’t been a straightforward process. The main constraint has been the fact that there has been a dependence on the South East, which is the main port for bringing in products. Getting the containers to Leeds, Manchester or Edinburgh from the ports in Felixstowe and Southampton involves them travelling the length of the country.

Moreover, obtaining planning approval itself takes a long time. “At Felixstowe they took five years, the same at the London gateway,” Pellew explains. “Southampton was also a massive project that took over five years,” he adds.

The philosophy behind the new port terminal is clear. PD Ports wants to create an efficient and cost effective port which will deliver a product to its clients through a greener footprint. “What we’re saying is ‘if people in the North of England want to buy a product why shouldn’t it come from a Northern Port?’” explains Pellew. What PD Ports aims to do is improve the ports in the North, using the sea as a natural resource; instead of containers travelling on land they can use the sea, which explains Pellew, has a lot of capacity. This would mean that shipping lines such as Asda, who have an import centre in the North, could call on these ports, bringing their products much closer to their market for a greener footprint.

Core values

As the company itself expands, simultaneously the people portfolio will expand. As ‘a firm believer in its employees’, the firm employs around 1300 staff altogether, 570 of which work in Teesport – which operates the ports of Tees and Hartlepool - with over 2000 working on the docks. In order to ensure the progress and development of these people, PD Ports actively sets core values which the company, from dock operators to senior management adhere to. These include: ‘investment in Capital and People’, ’commitment to equal opportunities for all employees’ and ‘working to a ‘Safety First’ philosophy.’

In setting these values, PD Ports aims to meet and develop the expectations of its employees and customers, whilst maintaining a safe and enjoyable working environment - in short, to enhance its productive and growing business. This includes training its people better which Pellew adds, ‘makes things happen.’

Certainly this value is concurrent companywide. With potential developments such as the awaited final approval for the deep sea container development, as well the newly-announced 1.2 million square foot import centre at Tees Dock in Redcar - which will create a possible 800 new jobs over the next two years - PD Ports almost certainly looks to have a productive future.