KINGSTON Wharves Limited (KWL) has invested over US$60 million as it moves ahead with its bullish expansion plans.

“What we’re doing is preparing your company to continue to be a big deal in the Caribbean and Latin America, and if you are elsewhere you will know that we are not small fry,”said Chief Operating Officer Mark Williams to shareholders during their annual general meeting at the AC Hotel in Kingston on Thursday.

The investment spans three areas of development: terminal, logistics and digital transformation.

“We must be a terminal that is fully invested with the requisite infrastructure readiness and equipment that is required to do the business that we do at an international level,” he further expressed.

In highlighting the plans of KWL to be achieved over the next 18 to 36 months, Williams says recently the focus has been on its customers, to deliver good efficient service. To do that, KWL is making way for bigger ships and more commercial activity in its space with its investment of US$30 million in the redevelopment project, Berth 7.

“What this will do is align our Berth 8 and 9 with 7, thus allowing us to facilitate the docking and stevedoring of multiple post Panamax vessels,” explained Williams.

In the redevelopment plans is the relocation of old buildings on the property that conduct services not needed on the terminal. In explaining the vision of the new Berth 7, Williams announced that the new terminal will be able to manage one million TEUs (twenty foot equivalent units) of container operations through the port of Kingston. The location currently manages 500,000 – 600,000 TEUs. Included in its capital investment is the process of acquiring more land space to expand the footprint of its terminal in the Newport West area.

“We believe that in the next 12 to 18 months we will be able to move the boundaries of the terminal by one block. That will allow us to have 25 per cent more capacity, berthing and yard space capacity so we can expand this business,” he said.

One of the reasons cited for the terminal expansion is the revelation that Jamaica’s position in the Caribbean puts it at a great advantage for potential near-shoring opportunities. KWL is now positioning itself to grab some of those opportunities when they arise.

On logistics, with an investment of US$25 million, a new world-class warehouse cold storage logistics facility is in the making.

“The capital work has started. In phase one we’ll be delivering approximately 60,000 square feet of cold storage facility — and then also we would have 70,000 square feet for dry goods,” Williams announced.

KWL’s terminal business for the year ended December 2022, generated 70 per cent of its revenues and 75 per cent of its profits, while logistics earned the other 30 per cent of revenues and 25 per cent of its profits.

“We feel that as a company, we want to get into every area of logistics and transportation and that’s what we plan to do. We want to consolidate our position as an auto transhipment hub in the Caribbean, we want to sweat the assets, we want to diversify the offering and we want to expand our terminal business and our logistics infrastructure,” Williams expressed confidently.

One of KWL’s key revenue drivers is motor unit moves, which have grown by 66 per cent over the last five years. Williams believes if the wharf had more space, the business would have grown exponentially.

The expansion continues with digital transformation. While the CEO did not reveal the amount invested in this segment, the company will be upgrading its terminal operating system.

“When you’re moving cargo through a terminal at the level that we’re moving, you need an efficient, robust IT system to do that,” he said.

In addition, patrons and shareholders were reminded of KWL’s “click n connect” contactless cargo clearance service which has been a part of its thrust towards digital transformation launched in 2021. It eliminates the hectic, time-consuming process of collecting personal cargo by using the e-service platform for more convenience.

“You go on your smartphone and you pay all your charges, including Jamaica Customs and you do a curbside pickup, so there’s no longer a need to be at the wharf for two hours, you can do everything in 10 minutes by doing everything on your mobile phone,” said Williams.

KWL wrapped up the year with an increase in its revenues of 9.5 billion, a 9 per cent increase, but its operating profits saw a decline of 16 per cent to $3.3 billion.

In explaining the cause of the decline in operating profits, Williams gave the perspective that the majority of KWL’s cash position is held in US dollars. As a net earner of foreign exchange with much of its capital expenditure in US dollars, he says, it makes sense to hold its funds in the same currency. However, market volatility resulted in a hit in 2022 when the Jamaican dollar appreciated for the first time in a long time, resulting in the company losing $177 million. The loss, equated with the gains of $432 million in 2021, resulted in a net loss of over $600 million.

” If you normalise that, our profit would have been up by 1.6 per cent, the business is solid — if you take a five-year look at the performance of Kingston Wharves, you will see that the revenues grow compound over the five years by 31 per cent,” Williams explained to shareholders while showing a graph of the growth performance.

With the continued growth, shareholders’ equity grew by 2 per cent and KWL impressively holds $42.7 billion in assets. According to Williams, “We’re using that cash to bolster the business, prepare for the future.”