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British bulk ports look beyond Brexit

Terminal operators are investing in readying UK facilities for growing volumes, whether for construction aggregates and steel products or grain and fertilisers

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BS, ABP Humber and DB Cargo seek to be one of four logistics hub for Heathrow Airport's expansion
BS, ABP Humber and DB Cargo seek to be one of four logistics hub for Heathrow Airport's expansion

As the UK vexes over Brexit, its bulk port operators have invested steadily for trade whether inside or outside of the European Union. As operators look beyond once staple flows such as coal and ores, much of this expansion is targeted at meeting the growing demand for steel, construction materials and agricultural bulk.


According to the UK Infrastructure and Projects Authority, Britain’s pipeline of announced investment in 2018 was more than £400B, with £190B due by 2021, much of which involves significant building work, including major road, rail, power and port projects, and large quantities of concrete and construction steel.


Coordination

 

These opportunities are galvanising the UK’s port and steel sectors to coordinate investments. In Lincolnshire, UK producer British Steel is looking to be one of four logistics hubs for Heathrow Airport’s third runway expansion, reaching a shortlist in March with the support of Associated British Ports (ABP) Humber and DB Cargo.

 

In November, ABP took over Immingham Bulk Terminal Limited as part of a £65M investment in the facility, after British Steel handed over the operation ahead of its lease expiring in 2028. ABP will invest in new cranes and quayside equipment and bulk handling infrastructure.

 

The terminal handles 5.5 Mtpa of bulk cargo, including iron ore and coal, for British Steel’s Scunthorpe plant. British Steel was founded in 2016 when Greybull Capital, the UK investor, paid £1 to Indian industrial group Tata for its European long products business based at the Scunthorpe works.

 

Gerald Reichmann, chief financial officer at British Steel, said the deal allows it to focus on core steelmaking activities and offers additional berthing opportunities for further growth. Simon Bird, regional director of ABP Humber, said the deal offered scope for further expansion of steel manufacturing in the Humber region.


British Steel also has a 50% holding in the Redcar Bulk Terminal, which had serviced the former SSI steelworks on Teesside before liquidation in 2015. Redcar exports coking coal and furnace-ready scrap. The steelmaker also runs Teesside Beam Mill at Lackenby, which produced sections for London’s Shard skyscraper.


Meanwhile, ABP has secured new business at Immingham to handle 40,000t of steel for freight forwarder RM Maritime, which is destined for the UK’s booming construction sector. In January, ABP discharged almost 12,580t of steel beams from the UAE for Scunthorpebased Rainham Steel.

 

Agri and infra


ABP also continues to invest in agricultural handling in the UK, including £1M last year in a bagging plant and equipment at Immingham Bulk Park for Thomas Bell & Sons, following the signing of a five-year deal to handle an extra 80,000 tpa of fertiliser.

 

In 2016, ABP and Thomas Bell invested £0.5M to build a fertiliser blending facility at the bulk park. The UK’s largest agribulk terminal handles 1 Mtpa and 25,000t-plus cargoes, taking a 26,000t cargo of granular urea last November from Egypt for Gleadell Agriculture.


The UK operator has also invested to accommodate for growth in agribulk cargo volumes in South Wales. ABP spent £4.5M last year on agribulk warehousing at Newport, offering 70,000 ft2 of covered bulk storage facilities. In 2015, £3.3M was spent on new cranes, and the following year, £2.3M was invested in a 3,500 ft2 warehouse.

 

Ambitious UK infrastructure and construction work and plans have also spurred investment across ABP’s facilities, including in South Wales. In September last year, the company purchased Neptune Works, a 190,000 ft2 former engineering facility on a 10-acre site adjacent to the port of Newport, for manufacturing and storage.


Rhys Morgan, head of property at ABP South Wales, said Neptune’s size, height of access, cranes and space are particularly attractive for plant and engineering projects for major infrastructure projects in South Wales and the South West, including the Hinkley Point C nuclear power station development in Somerset.


Demand from the UK construction activity also underpinned PD Ports-owned Teesport’s five-year contract with British Gypsum, which imports rock gypsum for its northern factories. Frans Calje, CEO of PD Ports, said the deal is part of a £50M long-term strategy to cater for the growing need for bulk and aggregates.

 

Regional construction activity, as well as agriculture, is crucial for the port of Great Yarmouth on the east coast of Norfolk, which installed a new LHM 280 mobile harbour crane in February. Owner Peel Port has invested in the integration of the river port and deepwater harbour since 2015, with an eye on serving extensive construction projects around Cambridge.

 

The grain terminal at the Port of Tilbury remains the premier strategic facility in the South East for the import and export of combine-harvested crops. In April, owner Forth Port completed its flat storage facility at the terminal, increasing the capacity by 16,000t for both imported and exported wheat.

 

Tilbury’s grain terminal can now store 136,000t for customers such as long-term partners Frontier and Millford Grain. Built adjacent to the existing grain terminal, the flat store can in-load 500 tph using a mill gallery conveyor system with overhead conveyors that automatically feed the storage unit.

 

The Tilbury grain terminal has over 200 silos ranging in size from 60t to over 2,000t, supporting the flour and ingredient market for the South East, London and the Midlands. The terminal also operates a monthly coastal shipping service from Tilbury to its sister port in Kirkcaldy, Scotland for Carr’s Milling.

Peel Ports Great Yarmouth has invested in a new LHM 280 mobile harbour crane
Peel Ports Great Yarmouth has invested in a new LHM 280 mobile harbour crane

Building up

 

Meanwhile, meeting the needs of the UK’s construction sector, particularly around London and the South East, is driving the Tilbury2 port development, which won building consent in February from the UK secretary of state for transport. UK civil engineering company Graham was nominated as the principal contractor.

 

Part of a £1B investment from 2012-2020, the new port on 150 acres of the former Tilbury Power Station is due to open by 2020. Along with a ro-ro terminal, catering largely for the European steel trade, Tilbury2 will be the UK’s biggest hub for importing, processing, manufacturing and distributing materials for the construction sector.

 

The port is looking to meet the rising demand for building materials and aggregates from the UK sector. The £200M-plus construction project will include a new rail and road connection, deepwater jetty and pontoon. The rail terminal will accommodate the longest freight trains of 775m.


Across the Thames Estuary, Peel Ports London Medway last year completed a £5.4M investment in grain facilities at the Port of Sheerness, which serves Kent’s grain market. The upgrade included refurbished handling and storage facilities at the southeast port, a new elevator/conveyor and a new Liebherr LHM 280 crane.

 

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