Experience of China's Shekou inspires port development in Djibouti

Updated: December 19, 2022 Source: China Merchants Group
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As an important part of Djibouti's economic development, port logistics industry accounts for about 70 percent of the GDP of the country, which is the reason why the Djibouti government attaches great importance to the development of Djibouti Port.

Inspired by the successful experience in developing the Shekou Industrial Zone in Shenzhen, south China's Guangdong Province, China Merchants Group (CMG) has adapted to local conditions to apply the Shekou integrated development model 4.0. The "port-park-city" model takes the port as the leading and entry point, and the port-centered industrial park as the core and main carrier, systematically solving the shortcomings of the soft and hard environment that restrict the industrial transfer of the host country, and creating a platform for international production capacity cooperation.

Djibouti's "Port" - Upgrading port operation mode to enhance local economic development

In February 2013, CMG acquired 23.5 percent of shares of Port of Djibouti Limited (PDSA) for 185 million U.S. dollars, becoming the "minority shareholder and butler" of all port businesses in Djibouti. In August 2014, PDSA built the Doraleh Multi-purpose Port (DMP), with a total investment of 580 million U.S. dollars. It was put into operation in May 2017, with a designed annual throughput of 7.08 million tons of bulk cargo and 200,000 TEUs. The main port includes six 100,000-ton multi-purpose berths, with a total coastline length of 1,200 meters and apron water depth of 15.3 meters.

Doraleh Multipurpose Port (DMP) began operations in May 2017.

After CMG took a stake in Djibouti Port, it has comprehensively improved the operation and management of Djibouti Port by promoting the construction of the new DMP port and changing the operation mode. The cargo throughput and the recurring profit of the old port are equivalent to 160 percent and 284 percent respectively of those before China Merchants Group took a stake.

Djibouti's "Park" - Building a free trade park of first-class brand

In November 2016, CMG took the lead in signing an investment agreement with the government of Djibouti for the Djibouti Free Trade Zone, which has a planned area of about 48.2 square kilometers. The project was fully commenced in early 2017 and officially opened in July 2018.

Djibouti Free Trade Park officially opened in July 2018

During the construction of the project, the China-Djibouti construction team worked closely together to overcome harsh weather conditions such as high temperature and sandstorm. Through three shifts of construction every day without interruption, the construction of the park took only 300 days from commencement to completion, creating a new speed in Africa. The project is designed, constructed and accepted according to Chinese standards, and the first-class architectural quality has been highly praised by the Djibouti side. Among them, the 16-story modern office building - Djibouti International Building and high-end business hotel have become Djibouti landmark buildings.

Djibouti International Free Trade Zone

Focusing on the industrial strategy of "one city, two platforms and four centers", Djibouti Free Trade Park has attracted leading Chinese enterprises such as Yiwu Mall, China Electronics Corporation (CEC), Transsion, Dongfeng Commercial Vehicle, CIMC, GWH, and State Grid E-commerce since its opening, continuously enriching its industrial service functions and building an international trade and logistics center and an export processing center. By October 2021, 189 international enterprises have settled in the Free Trade Zone, and the occupancy rate of built warehouses is 100%. The trade and logistics business has developed steadily, with a cumulative cargo handling volume of 890,000 cubic meters. The park operating company itself creates nearly 200 jobs, and the whole park creates nearly 2,000 direct jobs, greatly improving the local labor employment rate.

At the opening ceremony on July 5, 2018, the heads of states of Djibouti, Rwanda, Sudan, Somalia and Ethiopia and Chairman of the African Union attended  all spoke highly of the Djibouti International Free Trade Zone. Guelleh, president of Djibouti, said at the opening ceremony: "The construction of the Djibouti International Free Trade Zone will further strengthen Djibouti's role as a corridor linking Africa and the Middle East and connecting Europe and Asia, and will have an unprecedented driving effect on Djibouti's economy."

Djibouti's "City" - Building a city to plant "seeds" of people-to-people bond

As the new port area was put into operation in the middle of 2017, the business of the original old port was gradually relocated to the new port. China Merchants Shekou, China Merchants Port and Djibouti Port and Free Trade Zone Administration jointly invested and developed the "East African International Special Business District" project in the old port area, which will form a pattern of "one port and three areas" with Djibouti New Port, Djibouti International Free Trade Zone and Damerjog Industrial Zone, so as to realize the economic diversification of Djibouti and help Djibouti to build an international trade hub.

East African International Special Business District, helping Djibouti to build an international trade hub

Through the top-level design, the project is planned to transform the old port area of Djibouti into "one core" (international demonstration area), "two belts" (coastal activities and cruise tourism belt, urban culture and education belt) and "three areas" (international headquarters office area, seascape residential and commercial area, coastal business and conference area), which are developed in six phases. In order to show the national image and development vision of Djibouti and promote China-Africa cooperation and youth development, China Merchants Group and Djibouti Port and Free Trade Zone Administration jointly invested and launched the first-mover project to build Djibouti's new landmark - Special Promotion Complex. Construction of the project starts in 2020, with the grand opening on June 23, 2022. The Djibouti International Exhibition Center (with a construction area of about 5,000 square meters) and the supporting international-standard apartment accommodation facilities (with 121 apartment rooms, conference rooms, restaurants and other facilities) included in the complex will fully display the overall planning and development blueprint of the old port area and provide a crowdsourcing space for Djibouti youth.

The Djibouti Special Promotion Complex opened on June 23, 2022, with the exhibition center, youth entrepreneurship center, hotel apartment and other facilities put into operation.

In April 2022, China Merchants Group officially launched the operation of the "African Youth Innovation and Entrepreneurship Training Center", donating 767,000 U.S. dollars for the first phase. The project introduced China's leading innovative education resources for Djibouti and Africa, and helped Djibouti's young elites gather and link various entrepreneurial resources to provide all-round business incubation services. On September 15, 2022, the first-phase training camp on digital innovation and cross-border e-commerce was opened, and is recognized and supported by the president of Djibouti and Chinese ministries and commissions such as the Ministry of Commerce, the Ministry of Foreign Affairs and the International Department of the Central Committee of the Communist Party of China. The project aims to select 30 to 50 young talents to study, train and practice at the center every year, and cultivate 300 young leaders or entrepreneurial elites for Africa within five years, becoming an important platform for China Merchants Group to link Djibouti youth and China's resources, creating a new highland, building a new platform and providing new opportunities for youth innovation and entrepreneurship in East Africa, helping Djibouti to realize "Vision 2035" and deepen cooperation between China and Djibouti in various fields.

Editor: Yu Huichen