Reporting 2021

A strong presence

The new Tanger Med II container terminal is proof: EUROGATE’s impressive networking capabilities are paying off. Well-coordinated teams and the right partners on the ground have written a real success story in Morocco despite the pandemic.

The best vantage point is from the bird’s eye perspective. From a lofty lifting height of 54 meters, the crane operators at Tanger Med II can marvel at an amazing panoramic view: in the distance the shimmering blue of the Strait of Gibraltar and the mountain ranges behind Tangier. In the hustle and bustle on the ground below them, on the other hand, a lot of work awaits. Covering an area of 36 hectares in the north of Morocco, Tanger Med II is a modern container terminal built in an ideal location. Since early 2021, EUROGATE’s equity interest in Tanger Med II has contributed to the overall success of BLG’s CONTAINER Division with stable processes and good operating figures.

Number one in the Mediterranean

With a total handling volume of around 7.17 million TEUs, Tangier was the most successful container port in the Mediterranean in 2021, recording a rise in throughput of almost 25 percent in the first year since Tanger Med II became operational. The surrounding area is characterized by modern infrastructure, with companies such as Renault and Peugeot having production facilities nearby. DHL is also among the companies contributing to Tangier’s strong growth with a logistics center that opened here in 2020.

Tanger Med II

The thriving port has established itself as a hub for the movement of goods between Europe, Africa, America, and Asia. Operating at this strategically located intersection for north/south and east/west traffic, the Tanger Alliance joint venture, a consortium made up of local port operator Marsa Maroc, Contship Italia, Hapag-Lloyd and EUROGATE International, has already made a lot of things happen. The official commissioning of Tanger Med II on January 1, 2021 was the result of good teamwork and careful planning.

Carl Augustin

“We didn’t start from scratch, but were fortunate in being able to draw on our local experience and good partnerships.“

Carl Augustin, Managing Director
of EUROGATE International GmbH

Successful first year

When the spreaders are tightened, everything clicks in tandem. As vessels are loaded and unloaded, eight container gantries operating in shifts keep up a continuous whirring sound. Around one million TEUs were handled at Tanger Med II within the first year of operations. The 800-meter-long quayside is a buzzing hive of activity. That’s why it’s all the more important that the supporting role of the overhead gantries, tractor units and trucks functions like clockwork. Cohesive and well-choreographed teamwork sees to it that around 300 permanent employees and up to 200 external service providers do an effective job. You only need to spend a few minutes as an observer immersed in the daily hubbub of Tanger Med II to understand the important role this terminal plays.

Its success has a backstory, which Carl Augustin is keen to share. The Managing Director of EUROGATE International GmbH looks back with pride on a project whose planning began in the fall of 2017. “We didn’t start from scratch, but were fortunate in being able to draw on our local experience and good partnerships,” Augustin explains. Tanger Med II is one of four handling facilities in two adjacent sections of the port. EUROGATE has been operating here since 2008 and is continuing its course of success with the second development phase of the Port of Tangier.

However, the commissioning of Tanger Med II wasn’t without its challenges. The general disruptions in the logistics chains, coupled, among other things, with the unique circumstances of Brexit, had caused a container backlog at British ports at the beginning of 2021, which had a ripple effect all the way to Tangier. “Instead of a gradual ramp-up, Tanger Med II was catapulted into live operations requiring a high degree of flexibility from the get-go. Thousands of containers destined for onward transport to England suddenly had to be temporarily stored. Without the necessary lead time, it was all a bit wild west. But we got there in the end,” says Augustin. He has headed up EUROGATE International since 2008 and can draw on experience from numerous large-scale international projects.

Container bridges in front of a loaded container ship

One year after commissioning, Tanger Med II is already a success story for EUROGATE.

View on Tanger Med 2

TEUs in Tanger Med II increased by almost 25 percent within just one year after being commissioned.

Driving transformation forward together

Over the past few years, Augustin has made a number of trips by plane, car, and ferry to hold on-site coordination meetings in Tangier. His bottom line: Despite the coronavirus pandemic, commitment on the ground was imperative in further advancing the EUROGATE transformation process with the terminal project. For him, the key to success was good teamwork among EUROGATE colleagues and well-tuned partnerships on an equal footing. In his view, on-site presence is essential if both are to thrive.

“Instead of a gradual ramp-up, Tanger Med II was catapulted into live operations requiring a high degree of flexibility from the get-go.”

Carl Augustin, Managing Director
of EUROGATE International GmbH

The need to introduce a range of precautionary measures to protect against coronavirus infections led to a number of delays. New technical personnel in some cases had to be trained remotely in digital meetings. For important fine-tuning, EUROGATE experts remained in Tangier for months at a time. Encouraging figures are proof that the commitment of everyone concerned has paid off. In the first quarter of 2021, the initial handling rate at Tanger Med II was 12 containers per crane and hour. By the fourth quarter of the first operating year, this number had already more than doubled to 26 containers. One year after commissioning, Tanger Med II is already a success story for EUROGATE, and yet marks only the beginning of the new container terminal, which will continue to bring added value for EUROGATE’s customers, shareholders and the Moroccan economy for decades to come.

The “Future EUROGATE” transformation program was launched two years ago with the objective to make the German terminals more competitive.

3 questions to Michael Blach

Chairman of the EUROGATE Group Management Board

Michael Blach

Mr Blach, how is EUROGATE mastering the currently very complex challenges?

Our terminals are a vital hub for global freight transport. All political, social and global economic developments have an impact on container shipping and thus have direct and indirect repercussions for our business operations. While we are still facing the challenge of dealing with the consequences of the pandemic for global supply chains, the Ukraine war is now at the forefront of our thoughts. At the moment, we continue to do all we can to provide the best possible services for our customers. Our terminals have the necessary infrastructure and flexibility that give us the ability to deploy available capacities in a targeted manner and find joint solutions for many problems working closely with our customers. Of course, it also helps that we are present at several locations in Germany with different strengths and can therefore usually offer an alternative.

The “Future EUROGATE” transformation program was launched at the end of 2019. Why does transformation still remain such an important mission?

Competition for container transshipment volumes is growing fiercer all the time and we have to hold our own against strong competitors from the West and East. In our industry, price and performance, among others, are powerful arguments. And here it’s important that we draw level with our competitors, and overtake them when it comes to the details. That’s what our transformation process is aiming to achieve. The changes necessary to accomplish this have now largely been set in motion and will ensure that in the course of the next two years our processes become more efficient and commercially viable. We must see the transformation for what it is: the prelude to a long and continuous effort to permanently adapt to the conditions and requirements of the industry. Change must become part of our DNA. We can no longer afford to simply rest on our laurels.

What milestones does EUROGATE want to reach in the current year in terms of the transformation project?

Our aim in 2022 is to translate the agreements and action plans we have so far defined as quickly as possible into something tangible and measurable. By taking initial decisions and implementing the first measures, in 2021 we already reached around 25 percent of the targeted savings potential of a total of 84 million euros over the long term. But the road to achieving that target is long and bumpy. Plus, we are struggling with unplanned price increases, for instance for energy and investments. The transformation will not be a success until all the measures have been implemented and we have brought the new structures and workflows to life in our day-to-day operations. We are currently hard at work to accomplish this and in some areas are already in the middle of the test or implementation phase. I would like to express my special thanks to our team for this, because introducing new processes during ongoing is not something that can be taken for granted, especially considering the current order situation, persistent disruptions in shipping schedules, congested ports, and the fact that under the present circumstances handling is difficult to plan. In the medium to long term, we will focus on significantly increasing the degree of automation in our handling processes, because automation is an irreversible trend in our industry and a challenge that we must and will rise to.