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Interview

Josep Andreu – President & CEO, Port of Tarragona, Spain

Josep Andreu, president and CEO of the Port of Tarragona, a leading Spanish port hub focused in petrochemicals, provides an overview of the Spanish port sector and the impact of recently completed upgrades which have doubled capacity in Tarragona. He goes on to analyze the port’s interactions within Europe and how they plan to bolster their reputation and put themselves on the petrochemical map in the competitive Mediterranean environment.

Could you please introduce the Port of Tarragona to our international readers and the current activities that are being undertaken here?

“Despite Tarragona’s port containing a diverse range of established industries, 65 percent of our activities still belong to the petrochemical sector.”

Tarragona has always had a port throughout its rich history, and centuries ago this exact port was utilized by the Romans for imports and exports into the area. The port itself only really started to expand in the 1960s and 1970s as the most important and influential chemical companies began positioning themselves in Tarragona, in conjunction with the port’s utilization as a raw materials production site. Since then the port has continued to grow with the introduction of key industries, namely agriculture and general cargo containers. Despite Tarragona’s port containing a diverse range of established industries, 65 percent of our activities still belong to the petrochemical sector.

Therefore, the port has inevitably always been linked directly with fluctuation in the global petrochemical market. When the traffic in the market increases, we go with it – vice-versa – if the market drops, the port decreases in traffic. Nevertheless, we have been able to avert this risk by linking ourselves via the national network of CLH pipelines and this in-turn acts as a competitive advantage for the port. We are able to undertake operations in a cost-effective manner, the key for the effective running of any busy international port.

Furthermore, five years ago we envisioned the future growth of the petrochemical market and invested EUR 70 million (USD 80 million) into doubling petrochemical storage capacity. Now, the Port of Tarragona can go hand in hand with worldwide traffic increases, as the port has been completed and is fully operational, and we are working diligently to fully utilize the added space.

Where is the demand coming from to fill this additional area?

The storage capacity for petrochemicals has grown with the additions from 18 to 36 hectares – as mentioned – doubling capacity and showing the potential of the port as in independent liquid storage space. We are working to fill the space with the connections we have established with the keys players in the petrochemical field. Such companies are looking to invest in the two hectares currently available, with another 18 hectares being utilized as part of projects designed by various companies.

We are not looking to identify specific companies with a particular profile – in-fact – we are identifying entities who wish to take advantage of the port’s facilities and services that make Tarragona a destination for the petrochemical sector. We want to help companies set their roots in the port, which in turn will benefit the city of Tarragona as a whole.

Tarragona is one of the leading Mediterranean ports, though faces stiff competition. How does the Port of Tarragona differentiate itself in this challenging market?

First and foremost, the Port of Tarragona – I am proud to say – is the leading port in the Mediterranean for agri-food, with five million tons being trafficked through the port annually. This exemplifies our ability to be a number one player in a highly competitive and lucrative sector throughout the Mediterranean.

Across Europe there are ports that are considered world renowned port hubs, like Rotterdam and Hamburg in the north; although throughout the Mediterranean in the petrochemical market there is no single port that possesses raw materials like Tarragona – therefore – we understand our potential to establish ourselves as the leader in this geographic region.

At the Port of Tarragona, we work on two levels; firstly, we possess the logistic infrastructure for petrochemicals and secondly, we have a vision to be connected not only by sea, but also via railway and road to allow us to distribute across all branches of the industry. This is only a vision and we have a long way to go, but we are planning for our future now and adopting a pro-active approach.

Recently stevedore strikes have affected many Spanish ports; how has this impacted the Port of Tarragona?

At present in the Port of Tarragona we are primarily concerned with liquid bulk and petrochemicals and this is approximately 65 percent of our business; luckily, this traffic does not require a vast number of stevedores which are more employed in the areas of general cargo and containers; therefore, the strikes do not affect us as much as other large Spanish ports. On the other hand, we do hope these strikes are resolved so all operations can return to 100 percent efficiency.

Spain contains 39 cargo ports and eight regasification plants, many more than its neighboring countries. Do you believe there is synergy between ports or are they all working as independent entities?

Looking from the outside into Spain, it does seem like a high volume. Studies have been conducted looking at projections of lowering these numbers and creating larger, unified ports. In Catalonia, for example, the large ports of Barcelona and Tarragona which are distant from 100 kilometers could join, with each respective port specializing in a certain area, such as Barcelona in general cargo and containers and Tarragona in petrochemicals and agri-food. I believe this is the future, with these larger ports having one director and equal strategic and commercial visions.

Nevertheless, for this to ever occur we must change the current regulations which inhibit any chance of port unification. Guidelines need to be redrawn with clear differentiation between each port and a transition period put in place as ports change their statuses. This study envisioning the future of Spanish ports resulted in 12 large ports remaining, with the smaller one being engulfed – but funnily enough – the same study believed Tarragona should stand alone, independent of Barcelona, and this highlights the Port of Tarragona’s great potential in Spain and across wider Europe.

In what capacity does the Port of Tarragona interact with its counterpart in Barcelona?

At present, we have a great relationship with the Port of Barcelona, and in reality, if both ports work together in the future, we will both benefit immensely. We collaborate with Barcelona in areas such as logistics, safety procedures, training and harbor patrols. In these processes, it is illogical to construct one plan in Tarragona, and a separate plan in Barcelona only 80 kilometers (50 miles) north.

On the other hand, from a business perspective it is extremely difficult to join forces as we must grow our businesses independently in the current legislative environment. This is not because we are void of a functioning relationship between both parties – far from it – the main reason is that it is extremely difficult to manage a business while in the meantime constructing a plan to merge two separate entities. I do believe in the future this is a possibility but only time will tell.

In terms of volume, Spanish ports have lower traffic compared to large European ports like Amsterdam, Rotterdam and Antwerp (ARA). What do Spanish ports offer that make them unique?

Geographically Spain has immense potential to grow as we sit in the entrance to the Mediterranean, acting as a gateway to the Middle East, Europe and the Americas – all in all – a great logistic position. We must now learn how to take advantage of this opportunity by accelerating our business strategies.

Four or five years ago the Spanish petrochemical sector forecasted a shift in the relation to production, evolving the industry’s strategy and moving away from chemical commodities. If a company today continues to produce these commodities, it will cease to exist in five to ten years’ time. This highlights that Spain is thinking and looking into the future and has enacted a proactive approach. The Port of Tarragona is taking this lead by evolving its facilities, and now we are capable of producing a large array of products, allowing us to have good business even during market fluctuations.

For me it is not only important to have a vision, but to have the guts to make crucial decisions – that is – to stop everything to construct new investment opportunities and change the overall mindset and methodology. I am extremely proud to have made these decisions and now our petrochemical business is competitive and can sustain itself in the future.

What are the next steps to advance the Port of Tarragona in the future?

The Port of Tarragona has positioned itself excellently to be competitive through Europe, especially in petrochemicals and liquid bulk. Saying that – we see a few areas we must concern ourselves with going forward. Firstly, we need to focus on electric energy, and this is of paramount importance if we are to remain competitive. Secondly, we must continue to evolve our connections with greater Europe, not just in petrochemicals, but as a port hub in general.

How can the Port of Tarragona act as a model for other ports around the world?

We are continuously interacting with companies and organizations across the globe, and recently we added the Peruvian Chamber of Commerce as a valuable contact. The question of how we will grow is a very important one. We cannot sit on our seat and look out the window, wondering what could or may happen in the future. At the Port of Tarragona, we must initiate a proactive approach as we do not hold a world-renowned status like, for example, Barcelona, which can build a powerful brand and business on reputation alone.

Therefore, we must work tirelessly to build brand reputation and promote the port throughout the world. We do this to position ourselves in various markets, especially traffics we may expand into further down the line. We must equally be selective in which opportunities to pursue, for example, Peru, who require our structural and infrastructure support in the area of petrochemicals, and to a lesser extent general cargo. In this way, we will connect ourselves with other nations and important target companies – and furthermore – put the thriving Catalan city of Tarragona on the petrochemical map.

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