Dip beliesPort progress

Over the past five years the Port has branched out to provide dredging and consultancy services beyond these shores and in a relatively novel development a number of key customers are now exporting tens of thousands of tonnes in cargo from what was traditionally a 100 per cent import harbour.

Mr Gillespie acknowledges the fact that bottom-line operating profits are down but he points to a sustained cargo trade of close to 2million tonnes each year since 2007 as a healthy vital sign.

He paints an upbeat picture of the health of trade at the local port and explains that it’s no longer just simply about coal, grain and spuds: “The story the figures and the cold numbers aren’t telling you is the diversification strategy that we put in place in 2007/2008, when we started branching out into marine services,” he explains.

This involved the acquisition of a one-off dredging contract for the new Stena terminal at Cairnryan last year, which complements a number of ongoing dredging contracts at ports across the island.

Before 2007 Londonderry Port and Harbour Commissioners used to spend between £250k and £300k a year paying an outside contractor to dredge the silted up Foyle channels.

It was decided that with the help of a loan from the Department of Regional Development (DRD) a dredger should be purchased and the Port should dredge the Foyle itself 60 days of the year and offer dredging services for the surplus 300 days of the year.

Now the Londonderry-owned dredger services ports right across Northern Ireland and the Irish Republic.

The Cairnryan job was the local boat’s first venture into marine construction services but one that gave the port a bit of a lift last year.

“That gave us a big boost last year in our turnover,” says Mr Gillespie. “Obviously, that’s a one off. We are not going to get those sort of marine construction projects year-on-year.

“Where it’s kind of settling for us in that market is we are dredging ports like Drogheda, Warrenpoint, Waterford, Larne, we’ve been in Belfast.

“So we’ve got regular contracts now. Cairnryan was a one-off six month project that gave us a big boost.”

Despite the boost the reality is that kept profits fell from £702k to £427k over the year. Mr Gillespie puts this down to a reduction in cargo coming through the port, pure and simple.

“It’s specifically to do with the reduction in cargo,” he says.

With less coal, oil, fertiliser, grain, potatoes and various other cargo coming through the port is able to bring in less through its ships dues and handling, crannage and tuggage fees. However, prior to the bumper year of 2008 it was not unusual for kept profits to fall below the £400k mark.

‘It’s not unusual to have been down there. In 2005, where we had a fifteen month year, it was only about £300,000 for the whole year. And that was during a fifteen month financial period,” says Mr Gillespie.

Bright spot

Another bright spot on the horizon is the fact that gross tonnage exports from the port were up last year, from 82,172 tonnes in 2011 to 140,036 in 2012, bucking the overall trend. This is something Mr Gillespie is hoping will continue.

One of the main coal importer/exporters on the island is one of the port’s biggest customers, for example. And this customer is only now beginning to export coal to Spain from Londonderry.

Equally, City Industrial Waste have started exporting recycled cardboard bales all over Europe for uses as fuel and Clearway - who recycle waste metal - are now also exporting from the Port and have plans to expand their operations there. On the whole scope for optimism.

“Exports have been good and should continue in that we have two new customers and one customer doing new business,” says Mr Gillespie.

“The two new customers: one would be City Waste. They’ve been doing the waste bales and sending them into Europe, Alicante, Germany and now it’s going to Latvia. They are processing those and baling it and then it goes out for fuel,” he adds.

He reckons City Industrial Waste will soon be exporting 70,000 tonnes a year to Europe from the North West: “On top of that we have Clearway. They are huge waste metal recyclers on the island of Ireland and they have moved into the North West.

“Previously, they only operated out of Belfast and they would have bought stuff in this region and brought it on down to Belfast. They’ve now decided strategically they are going to set up a plant here for this area and they are going to export,” he explains.

He believes Clearway will soon be exporting between 15,000 to 20,000 tonnes annually from the port. And then there’s the coal.

“The third aspect is our coal importer, exporting coal into Spain. That has really kicked off for him. That’s a new market for his business. For that business, we make our money on it coming in. We be charging only for crannage so it’s not a big revenue earner but it’s good business. We are hoping those three businesses start to improve the exports from here,” he says.

Another exciting prospect is the imminent establishment of a new woodchip bioenergy plant at Lisahally. Mr Gillespie believes Evermore Renewables is at the final stages of putting the finances together for the plant and that it could be under development in the next few years.

“It’s very, very close. The planning permission is all done,” he says.

“They are just in the final throes of finance. We are hoping that’ll be anytime now.”

All in all the port is holding its own in comparison to similar sized ports. Warrenpoint, for instance, is being squeezed particularly between the predatory East Coast ports of Dublin and Belfast.

But Londonderry acted to protect itself from these kinds of predations by signing a number of long term 10-20 year contracts with loyal and established customers back in 2007/8.

The key to continued success will be the port’s flexibility.

“We can’t compete on price and scale with Belfast, Cork and Dublin. But where we can compete is we are very light on our feet and very flexible,” said Mr Gillespie.

“We can tailor deals to suit customers. The bigger ports are a bit more rigid in what they do and don’t do.’”