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Stability in difficult times: The Port of Duisburg continues to grow in 2019
• Sales revenues up 5 percent/Net income up 6.8 percent/EUR 6.4 million increase in investments
• Coronavirus crisis: Supply and disposal function for North Rhine-Westphalia is secured during the crisis.
• The recession will have a long-term effect on sales revenues and net income for 2020 and subsequent years.
• The second structural transformation and imminent recession represent the main challenges in the future.
Duisburg, 21 April 2020 – The duisport Group's diversified business model demonstrated its stability in 2019 - an aspect that became evident during the press conference for the duisport Group’s financial statements, which was held in an on-line format for the first time on 21 April. Even though the economic environment had already become much more challenging in 2019, the duisport Group was nevertheless able to stay the course during the past financial year. While the total handling volume in the port declined, also because of the reduction in coal and steel tonnages due to the structural transformation, the increasingly diversified company was nevertheless able to generate sales revenues of EUR 292.6 million in 2019. This is 5.1% or EUR 14.1 million higher than the comparative figure of the previous year (EUR 278.5 million).
The operating result (EBITDA) improved by 2.1% from EUR 42.5 million to EUR 43.4 million. The net profit increased by EUR 12.2 million in 2018 to EUR 13.0 million.
This represents an increase of 6.8%.
Big challenges and strategic projects continue to be addressed!
“Following a 21-year stretch of uninterrupted growth, the Port of Duisburg is facing a number of significant challenges. The recession that will follow the pandemic, and the second structural transformation on the Rhine and Ruhr, will have a negative effect in the current and future financial years. The subsequent catch-up effects and the decline in the automotive and industrial sector are already big factors today, and they will be noticeable until well into the fall. Overall, I expect a 10% contraction in total economic performance over the course of 2020,” says Erich Staake, Chief Executive Officer of the duisport Group, as part of his assessment of the situation. “We will have to pursue an approach of ‘driving on sight’ while using a sense of proportion and reality, but we cannot neglect our strategic projects. We must actively adjust our business models for the second structural transformation towards digitized logistics and industry, which is why - with regard to digitization - we will continue to expand our startport incubator as planned. Other demanding infrastructure projects such as logport VI will also be continued. The coronavirus situation cannot lead to a paralysis in this regard; on the contrary, it challenges us to become creative when it comes to our business. We will accept the expected setbacks, but we will also continue to look ahead with confidence. It is the only way to overcome the crisis,” continues Staake.
Overview of the four divisions
The largest business segment - Packing Logistics - reported strong growth of 8.9%, from EUR 93.6 million to EUR 102.0 million.
In the Contract Logistics segment, duisport grew sales revenues by EUR 24.4 million to EUR 29.7 million.
The Infra and Superstructure segment reported sales revenues of EUR 53.5 million, which slightly lower (-1.6%) compared to the previous year (EUR 54.3 million).
Revenues in the Logistic Services segment decreased by 1.5% from EUR 77.1 million to EUR 75.9 million.
Investments
In 2019, the duisport Group increased its investments in fixed and financial assets from EUR 20 million in 2018 to EUR 26.4 million.
Total handling volume
The total handling volume of the duisport Group declined from 65.3 million tonnes to approximately 61.1 million tonnes in 2019. This represents a drop of 4.2 million tonnes.
The main reasons include weaker industry demand and Germany's move away from coal-based electricity, which led to another significant decrease in bulk cargo. With 20%, the coal and steel segment was below the previous year’s level. Other factors include the closure of the Öresund bridge, which has significantly impacted the trade with Scandinavia, and weaker demand for preliminary chemical products.
In contrast, with a volume of approximately 4.0 million TEU, the 2019 container handling volumes of Duisburger Hafen AG remained at the level of 2018 (4.1 million TEU). With a share of around 60 percent, container handling is now duisport's most important business segment.
“The exit from coal, the continued crisis in the steel sector, the uncertain political environment associated with the energy transformation, the challenges of digitization and the apparent economic downturn - all these factors are akin to a second structural transformation for the entire North Rhine-Westphalia region. The diversified business model of Duisburger Hafen AG is well-equipped for these challenges. But even a company as prepared as ours cannot buck a progressively deteriorating trend in the long term,” concludes duisport Chief Executive Officer Erich Staake with regard to the handling statistics for the year 2019.
Central hub
At the same time, duisport continues its successful expansion strategy to become a central hub for goods in central Europe. Approximately 30% of the trade between China and Europe transported by freight train is already processed through the Port of Duisburg. This means that the Rhine-Ruhr region is becoming an increasingly important player in the trade between the EU and China. Every week, up to 40 trains run between Duisburg and a dozen destinations in China.
Further growth along the corridors of the Silk Road is supposed to be achieved for the benefit of the German export industry through cooperations with premium partners from China, Switzerland and eastern Europe.
The China Railway Container Transport Corp., Ltd (CRCT) plays an important role in this regard. A framework agreement for the continued joint optimization of Chinese transports was signed with this leading railway company in November 2019. At the same time, CRCT Europe Logistics GmbH also opened its official European office in Duisburg. In this way, the two leading companies in the transport and logistics sector are promoting rail freight between China and Duisburg. It has also allowed duisport to offer an additional service to its customers and strengthen its position as Europe's main hinterland hub.
Major projects 2019
Great Stone
At the initiative and under the leadership of duisport, and together with the partners China Merchants China-Belarus, the Belarusian national railway and the Swiss company Hupac, a bimodal rail terminal that is modeled on the logport concept and that includes large logistics areas, will be built on a 80-hectare parcel. The corresponding shareholder agreement was signed in Minsk. Construction work is expected to begin in 2020.
DIG Duisburger Infrastrukturgesellschaft – a model start-up
Duisburger Infrastrukturgesellschaft (DIG) was founded by the city of Duisburg (75.1 percent) and Duisburger Hafen AG (24.9 percent) in February 2019. The goal is the rapid and needs-oriented implementation of infrastructure projects around the port by bundling urban project responsibility including the respective eligibility and planning, financing and implementation experience on the side of the port company.
logport VI in Duisburg-Walsum
On the 40-hectare logport VI areal, duisport is building a trimodal connected container terminal directly on the Rhine. In September 2019, logport VI, the second-largest development project since logport I, reached its first milestone. At that time, the demolition of the factory buildings of the Walsum paper factory (which went bankrupt in 2016) was complete and the plot was ready for construction.
City of Duisburg and duisport: Working hand in hand for reduced truck traffic
As part of the continued development of logport VI, duisport has prepared the approval-related information for the construction of the container terminal and the internal access road for logport VI: In short order, DIG is supposed to be engaged to complete the site development plan proceedings for the second building section of the Walsum link road; in addition, DIG will also look after the construction of the first building section on behalf of the city. As the main shareholder of the Duisburger Infrastrukturgesellschaft (DIG), the city of Duisburg will also formally award the planning contract for the second building section.
logport V in Oberhausen
logport ruhr GmbH, a joint venture of duisport and RAG Montan Immobilien, is in the process of preparing a 30-hectare area in Oberhausen for Edeka Handelsgesellschaft Rhein Ruhr mbH. The parcel will be home to a central warehouse that will create over 1,000 jobs. In June 2019, EDEKA Rhein-Ruhr received approval to build and operate the warehouse from the city of Oberhausen. The ground-breaking ceremony was held in October 2019, within sight of the A3 motorway. While the logistics buildings are being built, logport ruhr GmbH is working to complete a two-kilometer connecting road to the motorway access point. EDEKA plans to open the warehouse in time for the start of the 2021 Christmas season.
CargoBeamer
In 2019, Duisburger Hafen AG and Leipzig-based rail technology company CargoBeamer AG entered into a long-term cooperation for more growth in the combined transportation (rail/road) segment. The objective of this collaboration is a massive increase in freight transport by rail, i.e. to reduce the pressure on roads and motorways. Three elements will be used to promote a climate-friendly transportation transformation: Automated handling for tractor trailers from road to rail, robotized cargo centers and the electromobility-based distribution of goods to industrial centers and urban metropolitan areas.
Jobs for the Rhine-Ruhr region
The duisport Group is one of the largest and most important employers in the Rhine-Ruhr region: Particularly the logport premises in the Port of Duisburg act as a job engine for the entire metropolitan region. In the year 2019, a total of 47,000 workplaces are directly or indirectly linked to the various transport and logistics companies in the port. The duisport Group alone has 1,500 employees. With its long-term education and continuing training strategy, duisport is a driving force in this area and offers training for 12 occupational profiles. Since 1998, duisport has been responsible for the creation of approximately 30,000 well-rounded, diverse and viable workplaces.
Crane Simulator
The duisport Group presented its own crane simulator in the Duisburg free port: A first for combined transportation in the hinterland. With this initiative, the world's largest inland port not only sets new trends for technical innovation in the logistics industry but also invests in the professional training and continuing education of its own employees.
startport
startport is the innovation platform of the Port of Duisburg. Since its launch at the end of 2017, it has already provided 35 start-up companies with an opportunity to develop innovative solutions for the logistics industry together with the startport accelerator. At the beginning of 2020, the group of young start-up founders from Germany was joined by two start-up companies from Finland and Slovenia at the startport headquarters in the Duisburg interior port. At the same time, the startport GmbH team also grew to 12 employees in the 2019 financial year.
startport exclusive partners Evonik, Klöckner & Co. and the Initiativkreis Ruhr were joined by the RAG Stiftung and Borussia Dortmund at the beginning of 2019. In 2020, startport wants to continue to expand its circle of exclusive partners. duisport rounds off its engagement in digital logistics innovations with an active participation in the Digital Hub of the Dortmund Fraunhofer-Institut.
“With startport in the duisport network, we attract young entrepreneurs who develop new value chains for local companies. Together with our network, we turn logistics into an innovation driver, and Industry 4.0 into reality,” says duisport Chief Executive Officer Erich Staake.
Sustainability and research projects
Three shore power fueling stations operated by innogy were installed in Duisburg-Ruhrort in the spring of 2019. They can supply electricity to up to six moored inland water vessels simultaneously.
Research project with RWE Supply & Trading + Universität Duisburg-Essen: Increased use of the environmentally-friendly liquefied natural gas LNG in the port. The companies Rolande and Liquind set up fueling stations that will go into operation in the middle of 2020.
Steady retrofitting of building lighting: In total, the port has already fitted more than 100,000 square meters of building space with energy-efficient LED lights. Since 2019, the luminaires on the port's roads and rail premises, which number over 1,000, have been retrofitted to LED.
Since June 2019, Duisburger Hafen AG (duisport) and the Fraunhofer-Institut Umsicht have been working in a joint project to develop a master concept for the use and supply of energy in the 1,550 hectare port areal. The name of the project is “enerport”, and it is financially assisted by the German Federal Ministry for Economic Affairs and Energy in the amount of EUR 1 million. Using the Port of Duisburg as an example, it pursues a cross-industrial approach for linking the energy industry with the residential, business, industrial, logistics and transportation sectors.
duisport also plays a major role in the three research projects of the support program “Innovative Port Technologies” (IHATEC) of the Federal Department for Transport and Digital Infrastructure (BMVI). This project, which includes partners from the scientific and practical fields, focuses on the development of application-based innovations in the port sector:
The InnoPortAR project develops innovative application fields for Augmented Reality, which are demonstrated using several application cases.
The objective of the TrailerPort project is to mitigate the parking problems that result from the growing number of tractor trailers in the handling terminals using intelligent technical and organizational solutions, and to increase/maintain the capacity of the terminal.
The third project, “SecProPort”, uses prototypes to identify solutions for a safety architecture in port communications. This is supposed to help with defending against future threats from cyber attacks. By participating in these projects, duisport confirms its innovative power and continues to expand its tight network to include partners in the science and logistics fields.
Key supply and disposal functions in North Rhine-Westphalia must be secured
- Operating processes are bundled by crisis unit
On 11 March 2020, the World Health Organization classified the spread of the COVID-19 virus as a global pandemic. The crisis unit at the Port of Duisburg has responded to the current worsening of the coronavirus crisis with a series of preventative measures that were initiated in coordination with the recommendations of the Robert Koch Institute and government authorities.
Similar to other companies, operational processes at the Port of Duisburg are also affected by the restrictions resulting from the hygiene and health measures.
“In view of this tense situation, the crisis unit is bundling the requirements and tasks from all areas of the company in order to minimize the negative impact on the port’s supply and disposal function for the entire North Rhine-Westphalia region,” says Erich Staake, Chief Executive Officer of Duisburger Hafen AG. “Ensuring the integrity of our workforce is key to maintaining the port’s key functions,” Staake continues.
Therefore protecting the health of employees is the top priority of the crisis unit: Employees are regularly informed of the current situation and the recommendations released by government authorities and the Robert Koch Institute to protect the health and safety of the population.
No confirmed cases of infection thus far
At this time, there are no confirmed cases of COVID-19 in the duisport Group.
The main crisis unit measures at a glance:
Clear processes and contingency plans
Working with all divisions of the duisport Group, the crisis unit has defined binding processes that will trigger immediate contingency plans in the event that business operations are negatively affected, in order to minimize the impact on supply and disposal processes.
Identical hygiene regulations for all
The crisis unit also informs external partners that they must comply with the preventative health measures of the Port of Duisburg for incoming and outgoing deliveries of goods.
Reduction in business travel
Business travel by all employees of the duisport Group will be limited to essential travel until further notice.
Information for media representatives
The spread of the coronavirus has also created a very fluid news situation. We would be pleased to keep you informed of the impact of the COVID-19 virus on the logistics processes at the Port of Duisburg.
But please understand that given the current situation, we cannot authorize filming requests or personal interviews on our premises. Of course, you can also contact us in writing at presse@duisport.de.