Hambantota International Port unveils focused strategy to boost efficiency

• Says have signed with over 30 investors from UK, Singapore, Japan, Sri Lanka, China and the Maldives  for HIP’s industrial zone

Hambantota International Port Group (HIPG) CEO Johnson Liu

The new operational blueprint of the Hambantota International Port (HIP) is impacting all aspects of the port's

activities. ‘HIP Speed’ is a concept to increase efficiency and momentum across port operations for the benefit of all stakeholders.

“HIP Speed will bring a new dimension to investment in port operations and allied industries. We put this formula in place taking into consideration the opportunities that will emerge in the coming year, when supply and demand structures will change and trade routes will be reinvented. The Hambantota Port is well placed on the global maritime map for growth and investment, and this formula is to strengthen processes and infrastructure to capitalise on future opportunities. As per our overall plans HIP will be a port that will complement the services of other ports operating in Sri Lanka,” said Hambantota International Port Group (HIPG) CEO Johnson Liu.

HIP Speed is modeled on previous hands-on experience of the current CEO on other facilities managed by the CMPort, ensuring efficiency and momentum of projects that would otherwise have dragged their feet in planning and execution. The concept also extends to customers establishing their operations in the port’s industrial zone; so that they receive optimum support speed in clearing any bottlenecks. 

HIPG is also working on establishing branch offices of leading investor companies, shipping and logistics agents, and has leased out seven floors of the Maritime Centre to more than 30 interested parties. The One Stop Service (OSS) facility with representative offices from BOI and Customs have made the whole investment process more efficient, the same facility will be available from the Ministry of Industries in the near future. The aim of this effort is to minimise the burden on investors when obtaining required certification and approvals from Government institutions.

HIPG Chief Operating Officer Tissa Wickramasinghe said: “The first two years of our operations was dedicated to setting up the processes, which included drawing up the master plan and putting in place a Standard Operating Procedure (SOP). This was vital as when launching a project such as this we need to get everything right the first time over. While we looked at overseas models for benchmarking and maximising our operational efficiency, we were guided mainly by the global standards and procedures of CMPort, which operates more than 50 ports and terminals all over the world. In the first half of 2021, CMPort achieved double-digit growth on its container throughput and bulk cargo volume at home and abroad. The Group’s ports handled a total container throughput of 66.57 million TEUs, up by 21.3% compared with the corresponding period last year, and bulk cargo volume of 284 million tons, up by 42.8% over the same period of the previous year.”

Their partnership with the Shenzhen Xinji Group to set up a plug and play ‘park in park’ manufacturing facility within the industrial zone is an example of how HIP Speed operates.  The project went into construction within 20 days of signing the partnership agreement with HIPG. Likewise, several projects have reached the construction stage, like the Ceylon Tyre Manufacturing facility, which is nearing completion of levelling and clearing work

Another area HIP Speed has worked well is in fast tracking the promotion of the port internationally.  The promotional activities have garnered commendable results despite the gloomy market situation experienced globally.

“We are rapidly moving to diversify HIP’s industrial zone portfolio and at the same time we are widely promoting the location internationally. We have signed with more than 30 investors from across the globe i.e. UK, Singapore, Japan, Sri Lanka, China and now the Maldives,” said HIPG CEO Johnson Liu.

HIP Speed prioritises operational efficiency, constantly reviewing processes to maximise the throughput and give maximum benefit to customers.    

A state-of-the-art yacht building facility is also to be set up at the port by Sea Horse Yachts Ltd. HIPG recently entered into an agreement with the newly incorporated company, a premium luxury yacht builder which is privately owned by boating enthusiasts from Maldives. The initial investment for the facility, which will be located within the Hambantota International Port, is set at approximately $ 58 million (Rs. 11.5 billion) and production is set to commence by early 2022.

The port’s overall cargo handling volume increased by 186% in the first half of this year in comparison to the corresponding period in 2020. The total throughput increased from 420,421 MT by end June 2020, to a significant 1,206,425 MT.

The vision of HIPG is to develop the Hambantota International Port to become an energy hub for South Asia. In order to build this energy hub, HIPG entered into a strategic partnership with Sinopec Fuel Oil Lanka Ltd. (SFOL) to provide bunkering services as a wholesale exporter and also service vessels calling HIP as a value added service. Bunkering is an important part of HIP’s energy services portfolio. Sinopec with their vast resources guarantees the supply of VLSFO in Hambantota currently and MGO in the near future, enabling the port to service all vessels plying the principal sea route in the Indian Ocean.

Transhipment of LPG and delivery for local consumption is also a part of the energy hub mix at HIP, which has the two main players operating supply facilities within the port. HIP has also partnered with Intertek Lanka Ltd. to establish a state-of-the-art petroleum testing laboratory, within the port to provide services to the energy hub, further strengthening HIP capacity to provide these services.

Not only is HIP investing in the efficiency of port operations, they are also helping the surrounding community deal with the pandemic in a timely manner.  HIPG has provided funding to establish a fully-fledged PCR testing laboratory at the Hambantota District General Hospital. Part of the funding for the PCR testing facility comes from the China Merchants Foundation (CMF), the philanthropic arm of HIPG’s main shareholder, CMPort. Many donations of personal protection equipment have also been made to government institutions in Hambantota.

In addition to bringing in new foreign investment, HIPG is increasing its own investment footprint at Hambantota Port, as well as creating more employment opportunities for locals and promoting the development of local industries. The group will continue to promote the port and the Hambantota District, with a view to turning it into a new Maritime centre, which in turn will have the desired impact on the Sri Lankan economy as a whole.