Going to bed at around midnight after a work dinner in Odessa, getting back into a taxi at half past five in the morning to catch another flight at seven and then attending a last-minute meeting with the Ukrainian railway director in the country’s capital, Kiev. And then in the evening, it’s time to fly back to Hamburg via Warsaw. Philip Sweens, who makes a time slot available for an interview between one of these landings and take-offs, says that he took 220 flights last year: “I’m sure it won’t be as many this year.”
Sweens (48), Managing Director of HHLA International, has been expanding the international business of the Hamburg-based port logistics group assisted by a handful of employees since 2017. He has big ambitions. HHLA had achieved steady growth outside of the Hamburg area in the freight transport sector with its subsidiary Metrans. But it had been some time since the Group had taken measures to push forward its expansion on foreign quaysides. That all changed when Angela Titzrath took over as Chairwoman of HHLA’s Executive Board back in early 2017.
Since then, HHLA’s international port business has been back on the agenda and Sweens is the person who has been given responsibility for it. Although HHLA does not make the revenue and profit attributable to his business unit public, Sweens says: “We expect HHLA International to become much more important to the Group as a whole in strategic terms over the next few years.”
HHLA had taken over a terminal in the Ukrainian city of Odessa, on the Black Sea, in 2001. Despite the war in the east of the country and Russia’s annexation of the Crimean Peninsula in 2014, the Group invested around 150 million dollars in modernising the site from 2005 onwards, recently doubling its surface area by expanding into the sea. In 2018, HHLA also took over a terminal operator in Muuga, close to the Estonian capital, Tallinn. Both terminals, like many of HHLA’s smaller foreign companies, are part of Sweens’ business unit. “I’m not involved in the operational management in Muuga or Odessa; we have fully staffed management teams on site to do that. My role is to ensure that we achieve the results we are aiming for and to oversee the strategic further development of the business. I’m also in close contact with the individual authorities and governments.”
Sweens, who was born in Switzerland and is also a citizen of the Netherlands, moved to HHLA from the shipping company UASC. The experienced port and shipping manager is to be responsible for expanding the international network of Hamburg’s biggest port company. “Takeovers of terminals in Europe, such as the recent one in Muuga, are all about developing logistical hubs and we are placing particular emphasis on the transport flows of the future”, he says. “What is more, the terminals in Estonia and Ukraine offer considerable growth potential irrespective of this.”
In its quest for expansion, HHLA started focusing on Eastern Europe in the 1990s. At that time, this was mainly due to the opening of the Eastern European and Russian market. Nowadays, these moves are also being pursued with the strategic aim of forging as close links as possible between the Port of Hamburg and the development of new trading routes to Asia as part of China’s “New Silk Road” project.
Given the tension between Russia and the European Union – especially over the Ukraine conflict – this entails a constant risk: “It goes without saying that the current tensions between the EU and Russia are having an impact on our business", says Sweens. “But the investment in the terminals in Muuga and in Odessa, which aren’t located far from Russia, are intended to be a long-term commitment. We expect the political situation to ease in the long term.”
Sweens says that HHLA could also seek expansion opportunities beyond Europe’s borders over the next few years if they present themselves. The company, which is 68 percent owned by the city of Hamburg, held an interest in a terminal in Chile for a few years before disposing of it again. The subsidiary HPC, which originally also took over the terminal in Odessa, is familiar with the global market for equity investments. HHLA also looked at a large number of terminals in several other countries before finally opting to take over the operator in Estonia. “We examine new investments to see whether they offer us an appropriate return, whether they give us more clout in our dealings with shipping companies and whether we can capitalise on our expertise”, says Sweens. We don’t necessarily have to be a majority owner.”
The company’s investments are, however, always highly specialised and require precise knowledge of the country concerned. “When it comes to expanding our international business, we do not intend to, and indeed will not, measure ourselves against market leaders like Hutchison or Dubai Ports. The key aspect for us is that acquisitions are a good fit for our network and for HHLA’s expansion”, says Sweens. “HHLA isn’t focusing on maximum size, but rather first and foremost on the new diversity that is emerging in the logistics and port business. And obviously it’s about creating added value for our owners.”
In the long term, Sweens says that the aim is also to establish links between HHLA’s terminals in Eastern Europe and the rail freight network of its subsidiary, Metrans. For the time being, however, the company wants to improve the road and rail links between its existing terminals and the hinterland, especially in Odessa. This is something that can only be achieved with the backing of local policymakers. And that’s exactly why Sweens had to get up very early today to make sure he didn’t miss his flight to Kiev.