Gulftainer considers Brazil pull-out

Gulftainer, the Sharjah-based port operator, is considering pulling out of Brazil where it operates a port on the country’s northeastern coast, chief executive Flemming Dalgaard said.

Brazil’s economy is expected to contract 3.8 per cent this year as the country experiences its worst recession since at least the 1930s. Gulftainer, 50 per cent owned by conglomerate Crescent Enterprises, was awarded an operator certificate for Brazil’s Recife port in 2011.

“We will make a decision before the end of the year,” Dalgaard told Gulf News at the Sharjah FDI Forum when asked about pulling out.

In March, Daalgard told Gulf News that the port was “not performing as would like it to” and that there had been no decision at the time on whether it should withdraw.

This week, Moody’s said that Brazil’s economy had likely started to rebound and could see positive growth in 2017.

Daalgaard also said Wednesday that Gulftainer remains in discussions to operate two ports in the United States. The terminal operator entered the US market in 2015 with a 35-year contract for Port Canaveral in Florida.

Daalgaard said there were “issues in terms of the ownership” with one of the US ports and that the “other one just hadn’t progressed.” He declined to give further details but said Gulftainer is also looking at “two other opportunities” outside the US and the United Arab Emirates. Gulftainer operates two ports in Sharjah.

Gulftainer has looked “at a number” of ports in Iran, but has so far decided against entering the market, Daalgard said.

“The ports are still very undeveloped,” he said. “There is a need to find out exactly what opportunities in Iran are going to present themselves and that is still not known.”

VAT clarification

Daalgard also said there needs to be a clarification on how value-added-tax (VAT) will be applied and rebated on land and sea transhipment cargo in the six Gulf Cooperation Council (GCC) states. The GCC, which is Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE, is expected to introduce VAT at a rate of 5 per cent from January 2018.

Daalgard said it is unclear how VAT would be applied and whether businesses would be rebated despite indications from the UAE federal government that firms would be reimbursed.

“Do I have to pay the import duty in the UAE then reclaim it after it has gone to Riyadh? Or will I even get it back?” he wondered.

Source: Gulfnews