OT Logistics: key to modern logistics and port development in Poland [WIND]

In response to the dynamically developing logistics market and growing demand for cereals exports, OT Port Świnoujście, a key port on the Polish coast, announces an ambitious project to expand its AGRO terminal. President of OT Logistics, Kamil Onlyk, emphasises the importance of this project to strengthen Poland's international position in the logistics industry and to support the national economy.

What are the main objectives of the extension of the AGRO terminal in OT Port Świnoujście, and what specific changes will be introduced under this project?

Located at the mouth of the Świny River to the Baltic Sea OT Port Świnoujście S.A.. is the now dynamically developing universal port, as well as the largest mass cargo centre on the Polish coast. We guarantee fast and reliable delivery of handling and storage services for bulk goods and general goods, both in exports and imports, from any means of land or water transport. The terminal operates 24/7.

The investment in the extension of the AGRO terminal responds to market demand. For some time, we have been observing an increasing trend in the area of AGRO product logistics, which will be an impetus to the development of Polish terminals in the coming years. The trend is due, on the one hand, to the increase in domestic production, which, at the same time as internal consumption declines, makes it necessary to direct the surplus to foreign markets – and on the other hand to increase the transit volumes of cereals from Ukraine, which must be handled, among others, by Polish ports. The extension of the AGRO terminal at OT Port Świnoujście will transform it into one of the most modern terminals implementing grain handling in a fully automated way.

How will the planned expansion increase the efficiency and capacity of OT Port Świnoujście?

Currently in OTPŚ we conduct handling of AGRO products, but these are not significant volumes, as the investment made 5 years ago was the first stage of the AGRO terminal. Then a modern flat warehouse with a capacity of 85 thousand tons of grain products was created, the second stage that we are about to start is the connection of the warehouse to the wharf and the installation of a high-performance loading device.

Thanks to the investment, annual handling capacity for AGRO products in OT Port Świnoujście will exceed two million tonnes and the offered loading instalment in this respect will be the highest on the Polish market. After expansion, the terminal will become very efficient and will be an important point on the AGRO map in Poland.

In Poland, the current handling potential for cereals in export does not match the demand for port services. This demand is much higher and will grow, assuming stable growth of AGRO products and further development of rail and transhipment infrastructure at the eastern border.

It should also be noted that the port in Świnoujście, as the highest located terminal in Poland, will have the potential to compete with German terminals, which also partially serve cereals from western Poland. OT Port Świnoujście is located within the borders of the TEN-T trans-European transport network (corridors: Szczecin/Świnoujście – Poznań – Wrocław – Ostrava and Szczecin/Świnoujście – Berlin – Magdeburg – Braunschweig – Hannover), which further increases the attractiveness of the port in terms of grain delivery by rail, in particular given the fact of the ever-growing railway infrastructure.

What are the expected economic benefits of the extension of the AGRO terminal for the region and the entire Polish economy?

Demand for grain storage, processing and export services from Poland is growing rapidly. Published in March 2023 Ministry of Finance showed that in 2022 Poland exported almost 9.2 million tonnes of cereals and cereal products for a record amount of EUR 3.125 billion. For comparison, in 2021 export of cereals in our country reached 8.6 million tonnes worth EUR 1.946 billion. This means an increase of 6.1% in domestic grain exports in tonnes and 61% in euro.

According to various estimates of the Ministry of Agriculture and Rural Development and the Chamber of Cereals and Peasants, Polish farmers "relieve" now from 2 to 4 million tonnes of Polish grain for export from previous harvests. Some sources say that this data is imprecise, and that in fact, the grain lying on the farmers may be up to 10-12 million tonnes. Meanwhile, the export capacity of cereals in Poland is estimated at between 8.4 and 12 million tonnes per year. Increasing these volumes is not possible without adequate investments in Polish ports.

The main problem in this area is inadequate technologies and non-specialised loading equipment in Polish ports, which achieve much smaller loading instalments than e.g. competitive terminals in European ports. Meanwhile, additional pressure on Polish port terminals imposes a much larger than the Polish, Ukrainian market.

The dynamic development of trans-shipment terminals at the border with Ukraine, as well as along the freight LHS railway line connecting Poland with our eastern neighbour, will certainly cause that, also after the full unlocking of Ukrainian ports, part of grain cargo from western Ukraine will be served by European corridors, including Polish corridors.

To what extent is cooperation with POL INVEST PROJECTS crucial for the extension of the AGRO terminal in OT Port Świnoujście and what specific competences and experience will this company bring to this project?

POL INVEST PROJECTS will be responsible for expanding the AGRO terminal in the system to design and build. The investment will be carried out on the Chemic Waterfront, and the terminal will benefit from a technological line and a loading device for ships, which will be communicated with the existing modern flat warehouse with infrastructure to operate wagons and cars. The development is planned to end in the second half of 2025.

What are the main technical and logistical challenges of the project and how do you plan to overcome them?

The most important determinant of the project is ecology. The design of the designed conveyor technology line shall maximise environmental protection and minimise dusting. For this purpose, a special structure of overflows will be implemented, conveyor string guards and dust filters will be installed. It's actually going on. time-consuming process of preparation of documentation, obtaining permits and approvals. This is a major undertaking which requires appropriate administrative decisions, including construction permits. In the next stage, the investment will begin.

OT Port Świnoujście is working at the same time on a modern communication solution (a system of interconnected applications – operating, communication, Internet and mobile) and as a result of this technological solutions customers of OT Port Świnoujście using grain component-handling services (as well as various types of institutions controlling throughCargo these goods – such as the National Tax Administration, Veterinary and sanitary Services – will have their own interface to control in real time the storage and handling of their goods.

What is the current work schedule and are there any significant progress in implementing the project that could be mentioned?

The preparation of the documentation needed to obtain all necessary permits and approvals has begun. In parallel, a detailed concept of the design of the technology line for the transport and handling of cereals to Chemical wharf. Technological solutions are also being developed to combine existing grain elevations with the Chemists' wharf with a technological cycle of grain transport and allow forCargo ships carrying 70,000 DWT.

Construction solutions will have to take into account the planned further extension of the AGRO terminal at the wharf.

Are the plans for the extension of the AGRO terminal to address sustainability issues and minimise environmental impacts?

The project will be implemented with complete compliance with environmental requirements. We take into account the most sensitive issues already in the preparation phase. We show the environmental impact and how we want to minimize it. Technical solution applied
and the logistics I mentioned earlier are fully correlated with sustainable development. We are working on updating our strategy in which the extension of the AGRO terminal in OTPŚ will be described in detail, including taking into account environmental aspects.

What are the long-term development plans of OT Port Świnoujście after the extension of the AGRO terminal and how does this investment fit into the future port vision?

We will inform about the long-term development plans of the OT Logistics Group.

The extension of the AGRO terminal at OT Port Świnoujście will transform it into one of the most modern terminals performing grain handling in a fully automated way. Please also note that the investment will take into account the planned further expansion of the AGRO terminal at the wharf.

Will the extension of the AGRO terminal affect the international cooperation and relations of OT Port Świnoujście with other ports or logistics companies in the world?

The market for cargo handling in seaports is highly competitive. We are motivated to take on the challenge and to compete also with German ports. For example, in the case of investments in Świnoujście, we focus on operational excellence and on offering new quality on the market.

We are convinced that this terminal can make a big difference in the logistics of AGRO products in Poland and Europe. Currently, a large part of agro products from Western Poland are exported to Germany and loaded there on ships. Through appropriate trade policy and thanks to new operational capabilities, we plan to attract those products which are not currently loaded in Poland to our port.

Our terminal has a convenient geographical location, very close to the open sea, at the interface of main shipping routes and good inland, rail and road connections to land facilities. Moreover, the Port of Świnoujście is characterized by very favourable navigation conditions. In particular, it is a non-freezing port in which there are no sea tides and no flooding. The navigational entrance channel to the port is 32 nautical miles long, 180 to 200 m wide, depth 14 m. Ships enter the port directly from the Gulf of Pomerania.

What are the expectations of changes in the market for the transshipment of agro goods after the expansion of the terminal and what new opportunities could open up to the port?

The macroeconomic environment is still very dynamic. Our aim is to respond quickly to changes in the economy or geopolitical and to respond smoothly to what is happening on the market. In our industry, it is the one who can best adapt to extremely fast market changes. Therefore, our ports are diversified and serve various industries and sectors of the economy, including strategic branches.

As far as grain forecasts are concerned, everything indicates that it will be a very prospective product. Except that domestic production of cereals is increasing and, of course, we still have the issue of Ukrainian cereals. After the war, all logistics chains will certainly not return to their old corridors. Ukrainian customers and contractors with whom we speak have already redesigned part of their business so that the routes have their alternatives. They already run through alternative ports, through European ports.

Recently in Polish ports there were also transhipments of Ukrainian ores, which later went by sea to customers in the Netherlands and Africa.

Returning to agro products, the Chamber of Cereals-Paszowa estimates that in the next agricultural season the surplus of cereals on the Polish market can reach several million tonnes, counting domestic grain production and imports from Ukraine.

Demand for warehouse and handling services of agro products in Polish ports offers many opportunities. Export potential of agro products in Poland was limited due to outdated technology and inadequate infrastructure for both transport and port (limiting the handling capacity of terminals). In response to market demand OT Logistics Group has made a number of investments, the total value of which exceeds PLN 100 million. After the expansion of the agro terminal in OT Port Świnoujście it will be converted into one of the most modern terminals implementing grain handling in a fully automated way.

How does the planned extension of the AGRO terminal in OT Port Świnoujście fit into the broader OT Logistics Group development strategy? Are similar investments planned in other ports belonging to the group, such as OT Port Gdynia?

We are constantly monitoring trends in this market and the expansion of the agro terminal is a response to market demand for such investments.

OT Port Gdynia is already the most universal port terminal in Poland, and the strategic investment was made in the beginning of 2023 by the purchase of Shiploader, a device thanks to whichCargo cereals on ships are moved up to 50% faster. Thanks to this investment, the company gained a huge competitive advantage, as it is the only mobile shiploader on the Polish coast.

In OT Port Gdynia we also carry out a number of other investments. Part of the general warehouses have been adapted for agro products, loading capacity increases. Four new smaller warehouses were put into service, and further expansion of the component area is planned. At the port, PV installations of XX kW were also installed and launched, which are part of a long-term strategy to introduce solutions to reduce the negative environmental impact of economic activities.

How does OT Logistics plan to promote cooperation and synergies between different ports in the group, including between OT Port Świnoujście and OT Port Gdynia, to increase operational efficiency and market competitiveness?

As OT Logistics Group, we are the largest and most versatile port operator in Poland.

OT Port Gdynia is a universal general terminal. The terminal has a dominant position in Poland in handling in ro-ro technology (rolling loads, semitrailers) and a significant position in lo-lo technology. The port also provides bulk handling services such as grain, sharps and fodder, biomass, coke, coal, aggregate, rocking and other bulk loads.

OT Port Świnoujście is the largest mass cargo handling centre on the Polish western coast (both agro loads, i.e. grain, sharps, fodder, biomass and other mass loads, i.e. coke, coal, iron ore, aggregate, fertilizers or forest products). The OTPŚ also supports general cargo (steel products, paper products, big-bag loads, palletised loads, wood-based products, heavy pieces max up to 250 tons, oversized loads or investment supplies) and containers (handling all types of containers, including refrigerated ones; the possibility of introducing container trains).

What are the main objectives and plans of OT Logistics in the context of the development of port infrastructure in Poland, especially in the light of growing logistical and commercial needs?

As the OT Logistics Group, we have very ambitious investment plans and designated development directions. We know which way we would like to develop our group and this will be presented in a strategy that we will probably present in the first quarter of 2024.

We are aware that in this market the one who has the greatest flexibility and ability to adapt quickly to changes and turbulence wins. Hence, the investments we have been talking about for a long time and hence the drive to increase the universality of our ports. This is the key to success. We've done a lot of work lately.

A lot of new investments have been made, and there are more in the plans. We purchased two next generation Liebherr LHM 550 cranes for bulk, oversized and container handling. We harden warehouses, we change technological and transport lines. All of this aims to be flexible and ready to take advantage of market developments.

We are also making changes in terms of contracts and securing our business. We concluded an annex concerning the lease agreement for the port in Świnoujście. The extension to 30 years of the lease of the property on which the terminal operates increases the stabilization of OT Port Świnoujście and significantly facilitates further investment decisions.

We also invest in ecology. As I mentioned in Gdynia, we launched PV installations.

What are the biggest challenges facing OT Logistics in the context of port management and what are future plans for developing port activities and services?

The macroeconomic, geopolitical and economic environment is very volatile. On the other hand, the industry in which we operate is very competitive. And these are the challenges that we turn to the strengths of the OTL Group. Our goal is to be a Group as universal as possible so that we can react quickly to these changes, adapt quickly to what is happening on the market, because it is the winner who best can adapt to extremely fast conditions.

Port assets are now a key element of the OTL Group's activities and seaports play a strategic role in the global economy. We are the largest and most versatile port operator in Poland. OT Port Świnoujście implements very important, from the point of view of the OTL Group and the entire Polish economy, the handling of bulk goods. OT Port Gdynia is already the most universal port terminal in Poland.

Poland has a chance to become a logistics hub for the whole of Europe. The advantages and powerful opportunities are given by the natural location of ports at the intersection of trans-European trade routes east-west and north-south. Both the ports in Świnoujście and Gdynia are on the TENT network, the Trans-European Transport Network.

The biggest terminal in Poland - Port in Świnoujście, already has great opportunities to compete with German terminals. The ongoing expansion of the agro terminal will not only strengthen its competitiveness, but will support, so expected by Polish agriculture, the export stream.

Please note that our ports faced an urgent need last year to import above average amounts of coal, then store it. This year there was a topic of grain, which must be urgently exported from Poland. We are prepared for challenges and a rapidly changing market. We have a whole range of goods that are kept stable by ports, that is, coke, coke and iron ore.

Biomass, which is an alternative energy raw material, is also a growing interest. Its imports to Poland by sea grow every year. OT Port Świnoujście with many years of experience is an ideal terminal for handling biomass supplies. It has appropriate warehouses, unloading facilities and the possibility of further rail logistics.

In summary OT Logistics Group ports are geared towards diversification and serve various industries and sectors of the economy, including strategic ones for the functioning of the Polish and EU economy.

Mariusz Dasiewicz spoke to the President of OT Logistics Kamil Jedek.