Saif Powertec becomes first local firm to operate ships from abroad

Infographic: TBS

Saif Powertec Limited is set to become the first Bangladeshi company to operate in the shipping and logistics sector abroad. 

The company will operate eight vessels to transport imported goods from Fujairah Port of the United Arab Emirates (UAE) to Chattogram and Mongla ports, and other ports in South-East Asia and the Indian subcontinent.

This arrangement will allow for easier and low cost shipment of goods from the UAE, company authorities said.

On 28 February, Saif Powertec informed the Dhaka Stock Exchange (DSE) that it had signed an agreement with Safeen Feeder Company of the UAE in this regard.

Safeen Feeder is a UAE-based container feeder services company launched in 2020 by AD Ports Group, with a focus on the container distribution network in the Arabian Gulf and Indian subcontinent.

AD Ports Group, in a press release, said that under the terms of the agreement, Safeen Feeders and Saif Powertec will collaborate on cargo services from the UAE to Bangladesh over a period of 15 years.

For this, Saif Powertec has launched a subsidiary company, Saif United Shipping & Trading, in the UAE.

Saif Powertec has also informed the DSE that for the transport of goods it will charter eight ocean-going vessels from Safeen Feeder. The vessels will be operated by Saif United Shipping.

According to a statement made by the company, Saif Powertec would use the ships to import dry construction materials from the UAE.

Each ship will have a capacity of 55,000 DWT. It, however, did not disclose the amount of investment made in the business.

The vessels are each expected to bring in an income of Tk154 crore for Saif Powertec, registering a profit of Tk15.48 crore. 

Contacted, the company's Managing Director Tarafder Md Ruhul Amin, however, refused to comment on the matter.

AD Ports Group, meanwhile, said in its press release that it would operate bulk shipping services which will promote maritime trade between the MENA (Middle East and Northern Africa) region and the Asian subcontinent.

The scope of the agreement also covers future areas of collaboration to jointly develop and invest in the maritime infrastructure and projects of Bangladesh and the UAE.

According to the Bangladesh Bank data, in the fiscal year 2020-21, the country imported goods worth $1.32 billion from the UAE, which was 83% higher than the previous year.

In the fiscal year 2020-21, goods worth $0.49 billion were exported from Bangladesh. In the first seven months of the current financial year, the value of exports already stands at $0.41 billion.

Saif Powertec is the country's lone terminal operator, handling around 58% of containers at the Chattogram Port. It also handles containers at Mongla and Pangoan ports.

The company is also involved in logistics and civil engineering, electrical equipment and automotive or car batteries.

Saif Powertec's investment plan

During a recent interview with The Business Standard, Saif Powertec's Managing Director (MD) Tarafder Md Ruhul Amin said Tk2,600 crore was being invested in multimodal container terminals, oil and gas exploration and building a jetty at Mongla port for business diversification.

The company was expanding into gas and oil exploration with Uzbekistan's Ariel Service & Support by investing Tk473 crore.

The MD pointed out that currently, all the gas and oil explorations in the country were conducted by foreign firms.

"If we were to do it ourselves, we could save our money.  Moreover, Bangladesh would gain skilled professionals in this field. Although Bangladesh is ahead in other sectors, we rely on foreign firms here [for this]," he said.

He added that by working with foreign companies, Bangladesh would be able to develop local experts.

"It might not yield a profit for me, but it will have a significant impact on Bangladesh's economy and its development. We are in discussions with the ministry and PetroBangla about how to begin working in this sector," he said.

Additionally, in October 2021, Saif Powertec's subsidiary Saif Logistics Alliance signed an agreement with the Container Company of Bangladesh Limited (CCBL), a subsidiary of the Bangladesh Railway, to build the country's first multimodal container terminal at Halishahar in the port city at an estimated cost of Tk500 crore.

Tarafder Md Ruhul Amin said the terminal would be launched in 2023.

Saif Powertec's other focus is on a multipurpose jetty at the Mongla port, for which they have invested an estimated Tk1,600 crore. The jetty will handle both container and cargo ships with the construction expected to be completed by 2023.

Furthermore, the company will also invest Tk75 crore in the information technology business, from where they expect to earn Tk100 crore. 

Saif Powertec earned Tk479.50 crore from its port operations, battery business and subsidiaries in the fiscal year 2020-21, which was 25% higher than the previous fiscal year.

In the same year, they made a profit of Tk62.63 crore, paying 10% cash and 6% stock dividend to shareholders.

In the first half of this fiscal year, its revenue slightly increased to Tk217.72 crore, but the net profit came down to Tk37.46 crore compared to the same period in the last fiscal year.

"We are now recovering from the plunge caused by the pandemic. The government stimulus package has given us the necessary fuel to turn things around. We are grateful to the premier for her support which helps many businessmen to survive," Tarafder Md Ruhul Amin said.

At the DSE, its share fell by 3.68% to close at Tk39.30 on Tuesday despite the announcement regarding the latest ship operation business abroad.