Page 269 - Aamir Rehman - Dubai & Co Global Strategies for Doing Business in the Gulf States-McGraw-Hill (2007)

Getting Things Done: Operations Strategy and the GCC 251

entities that formed DPW and of DPW itself is instructive in show-
ing how core competencies can be nurtured and scaled internation-
ally. The DPW story is also useful in understanding how Gulf-based
companies have the potential to become serious global competitors
when they combine deep expertise with capital and ambition.
DPA, in managing Dubai’s own Port Rashid and Jebel Ali, was
a leader in technology and became increasingly expert in advanced
13
port operations as it built on its success. DPI was created in 1999
as a platform for taking this expertise abroad and growing into
other markets. Its first international partnership was in Saudi
Arabia, with the Jeddah Islamic Port. With DPI’s support, Saudi
Arabia’s first 1 million TEU (a standard unit for measuring
shipping volume) terminal was achieved. Thereafter, DPI began
operating ports in relatively obscure but important locations such
as Djibouti (2000) and Vizag, India (2002). By 2005, DPI was one of
the top six port operators worldwide. 14
Through a consolidation with DPA and a 2005 acquisition of
CSX World Terminals, the platform called DPW greatly expanded
its presence and began managing ports in Hong Kong and China,
15
Australia, Germany, and Latin America. DPW was now a major
force in the port management sector and a truly global establish-
ment. When it acquired the British ports management giant P&O
(the Peninsular and Oriental Steam Navigation Company) in 2006
for $6.8 billion, DPW’s profile moved to a whole new level. The
acquisition would make DPW the world’s second-largest port man-
ager in throughput terms and would place control of five US ports
(including New York–New Jersey) in DPW’s hands. 16
Although the Bush administration supported the deal, US con-
gressional leaders and other opinion-makers saw the move as a
security risk and expressed concern about management of US ports
by an Arab-based entity. Supporters of the deal pointed out DPW’s
solid track record, as well as that under P&O these ports were
already under foreign management. Through a tumultuous process
dubbed a “debacle” in a Harvard Business School case, 17 DPW
agreed not to take control of the US assets and instead to spin them
off to a US-based entity. Ultimately the American insurer AIG took
the assets for an undisclosed sum.
DPW today manages 51 terminals in 24 countries. Its staff
exceeds 30,000. It operates terminals in Hong Kong, Shanghai,