www.portofsalalah.com

Message from the ChairmanIt seems like yesterday that I witnessed the first container vessel call at the port of Salalah. In just 10 years our vision of a mega port at Salalah has become a reality. The Port of Salalah has grown to be Oman’s largest port and a regional powerhouse in shipping. Over 15 million containers have been handled and over 2,000 jobs created. The port’s achievements have been remarkable and we will continue to build on the port’s success in the next 10 years. New berths are planned and we will more than double the port’s current capacity.

I have observed the Port of Salalah grow and develop steadily into an enterprise bringing initiative and opportunities to the Dhofar region and sustainable positive change into the lives of countless young people.

On behalf of the board of directors I congratulate the management and staff of the port on their 10th Anniversary and thank the shareholders and government of Oman for their continued support. To all the staff at Port of Salalah I would like to say that the work you do is invaluable to the company, but more importantly to the community and the nation and I encourage all of you to be positive role models and leaders.

“Happy Anniversary”

Abdul Aziz Shanfari.

Deputy CEO’s Message

CEO’s MessageOn the occasion of the Port of Salalah’s 10th Anniversary I would like to thank some of the key contributors to the ports great success. The Government of Oman under the wise leadership of His Majesty Sultan Qaboos, the board of directors, shareholders, our key customers - Maersk Line, APL and Mediterranean Shipping Company and most especially the management and staff of Port of Salalah.

In my role at APM Terminals I have worked at a number of terminals around the globe and wherever I have been the Port of Salalah has been viewed as a role model for other terminals to emulate and one of the most successful port developments in the region. I feel privileged and honored to be a member of the team that will lead the port into its second decade of operation. A decade of growth which will see the current handling capacity doubled in the first five years and the creation of many new jobs and opportunities in the community. A period in which the port will strive for a better, stronger and healthier future for us all and make the Port of Salalah the leading transshipment hub in the region. Happy 10th Anniversary! It takes vision, determination and hard work to make something this innovative and significant succeed.

“Congratulations to everyone on this historic milestone.”

Martijn van de Linde

The Port’s First CEOIt doesn’t seem possible that it has been 10 years since the opening of The Port of Salalah Transshipment Hub which has added great value for the Country and local people.

Prior to 1996 I had no knowledge of Oman and certainly did not know where Salalah was. However after I visited the Sultanate and Salalah in October of 1996 I quickly fell in love with the country, the people and especially the challenge and opportunity of developing the Port of Salalah. Fortunately for me, I was nominated by Sea Land and Maersk to be the first Chief Executive of Salalah Port Services. It is gratifying now to see that our early vision for the Port and the Sultanate is coming to fruition and it gives me great pleasure and satisfaction to have been a part of that development and success. Salalah is now known around the world in the shipping industry. I congratulate everyone and especially the visionaries who have been a part of this success story. I have wonderful memories of the 10 years that I lived and worked in the Sultanate and the most wonderful story is that the Port continues to grow and become ever more prominent in the global shipping community.

Jack Helton

As a native of Dhofar it gives me great pleasure to congratulate the staff of the port today. To all my colleagues I wish to convey to you how proud I am of you all and the tremendous contribution that you are making to the company and the community. I think we stand out as an organization with a very vital stewardship in character education and leadership development. What you are all doing is so needed in providing a model for the entire country.

During my tenure at the port I have seen it grow from strength to strength developing a port for the future that the region and the nation can be proud of. I am honored to be part of a company that makes it a priority to harness and nurture the leadership potential of young Omanis. I have had the pleasure to work with people who I have witnessed grow in confidence, in their own ability and a mature respect for their peers and seniors. Every interaction I have with you inspires my confidence for the future of the port and the future of Oman.

Congratulations!”

Ahmed Ali Akaak

Strategic Salalah - ten years of progress

In ten years the Port of Salalah has established itself as a world class container port with an everincreasing number of vessels calling and containers handled. Salalah sits on the world’s fastestgrowing and second largest container route between Europe and the Far East and provides easyaccess to the Arabian Gulf, Red Sea, Indian Ocean and East African Coast.

Situated at the mouth of the Gulf, Dhofar has a proud maritime trade history which dates back to the ancient frankincense trade. Today as a regional transshipment hub the Port of Salalah coversan area of over 3 billion consumers. It’s location in the Sultanate of Oman means that The Portof Salalah operates outside the Gulf in a politically and economically stable environment, with a government that is universally regarded as ‘pro-business’, particularly when privatizationschemes and foreign investment are involved.

The Port of Salalah has established itself as an ideal facility, from which carriers can performfeeder relays into the Gulf. This coupled with effective and simple customs procedures,competitive tariffs and dynamic management has helped the Port of Salalah to develop into thenations largest port and one of the largest transhipment terminals in the region.

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Market

From the perspective of a container ship network from Salalah the Gulf is the largest market.Then comes the Sub-continent, East/South Africa and the Red Sea. For vessels serving the Gulf region and Europe/Asia shipping lanes, using the Port of Salalah as a relay hub affordssignificant time saving over almost every other port in the region.

It is estimated that a carrier operating on the Europe to Asia route, calling at Salalah rather than aport in the upper Gulf, represents a 3.5 day reduction in sailing times. If served in both directions,East and West bound, the saving amounts to one full week in time. This added to the significantcost savings of an entire week’s fuel make The Port of Salalah an attractive value proposition tomany of the container lines that call in the region.

High Productivity

One of the most notable developments in container shipping is the ever increasing vessel size and the speed of the container vessel. This demands readily available berth space at all times and high levels of productivity from all ports of call. Productivity in consumer ports is measured from the time the vessel arrives until it sails and the number of container moves achieved within this time. During its short history the Port has broken the world record for productivity twice and continues to work closely with customers and look for innovative solutions to improve on its productivity taking into consideration future developments and requirements of the industry.

Currently the container terminal has a total area of 1,200,000 square metres with six linear berthstotaling 2,205 metres of quay wall and with an annual capacity exceeding 4.5m TEU*. The berthshave depths of between 16 and 18 metres with an approach channel of 18.5 metres.

Today 17 of the world’s largest cranes have been installed on the berths with a further 8 on order.

*Twenty Foot Container Equivalent Unit

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New Capacity for the future

With the increase in demand for port facilities in this region, the Port of Salalah has made significant investment in providing new facilities to ensure it remains an industry leader.

Investment is being made in eight more Super Post-Panamax cranes to add to the 17 cranes already operating. These cranes have the ability to reach containers stacked 24 across on deck, and can service the largest container vessels in the world. The recent opening of the ports fifth and sixth berths and the signing of an MOU with the Government of Oman for a further 3 berths will bring the port’s capacity to over 9 million TEU annually by mid 2012.

Further Expansion Plans

The constant expansion and development of the Port of Salalah plays an important role in meeting increasing customer requirements. At the same time, it also ensures increased efficiency and faster vessel turnarounds. The Port’s growth strategy is laying the foundation for success in reaching it’s goal of becoming one of the world’s foremost transshipment hubs.

“Terminal 2” which will comprise 3 additional berths was given the green light by the governmentin 2008. The area incorporating Terminal 2 will be the ports berths 7 to 9 and will ultimately givea total quay length of 3,555 metres. This latest expansion will add an additional 1,350 metresof quay wall and another 3 million TEU to the port’s annual capacity. Berth 7 is expected to beoperational during the first quarter of 2011, with Berths 8 and 9 scheduled for completion in thefollowing year.

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General Cargo Terminal

The General Cargo Terminal which was the original “Mina Raysut” continues to play a vital role inthe life of the port. It serves the regional community by providing handling facilities for all othertypes of non containerised cargo. The General Cargo Terminal covers a wide array of products and a variety of packaging formats, from individual pieces like steel pipes to unitized, bundled, flat,crated, palletized and even live animals. A number of commodities are handled in the general cargo terminal including cement, limestone, gypsum, wheat, plastic and resin. The terminal also handles cruise vessels and future plans include a dedicated cruise terminal.

The General Cargo Terminal has 12 berths ranging from 115 to 600 metres in length with drafts of up to 16 metres, and a dedicated oil pier. The terminal has been recording double digit growth for seven consecutive years and in 2007 handled 2.8 million tones, which is 21 per cent more than in 2006. With the development of a Free Trade Zone in Salalah the exceptional growth is expected to continue well into the future and be a platform for new projects in the Dhofar region.

Storage and Warehousing

The Port of Salalah provides cost effective long and short term storage. Regular and specializedwarehouse management services are available through both contract and public facilities as wellas recently developed speculative warehousing for new businesses ventures. The port also hasavailable full warehouse servicing, including stuffing and stripping marine containers and offersboth covered space and open storage.

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Training

Port of Salalah realized at the outset it had to design it’s own training programmes to meet it’sown specific and demanding needs. The port therefore decided to invest in a training centre tocater to the needs of the port, its customers and port users, as well as regional and affiliatedports around the globe. Committed to identifying training needs and imparting training skills toa workforce of over 2,000 requires an expansive range of activities. This includes IT Training,Mechanical and Electrical Training, Port Equipment Training, English Language Training, Health and Safety, Management and Professional Development.

The Port of Salalah provides training to personnel from other ports as well, to associatedindustries, government, customs, coast guards, port users and customers. The training centre isseen as part of company policy to ensure it is regarded as a responsible corporate body, mergingthe company’s training needs with the expectations of the community.

To date the Port of Salalah has provided training to numerous ports in Asia, Middle East and Africa

The Crane Simulator

The Training Centre has procured a state of the art CraneSIM specially developed to teach thenext generation of crane operators without reducing the port’s efficiency and risking fatal errors.The quality set up of the simulator and part task-desks help the trainees to focus on learning.

The results have been above expectation, with the trainees rating between 25 and 30 moves perhour. Currently the CraneSim is being used to train the port staff as well as other terminals withinthe APM Terminals Group.

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Health and Safety

The Port of Salalah works closely with the government, industry specialists and customers to achieve the safest working environment possible, all the while maintaining the highest level of terminal security. Through education, safety training and other programs, the port has brought about a focus on crucial health, safety and security issues to its employees, customers, port users and the general environment.

Health Safety And The Environment

There is an unrelenting commitment to health and personnel safety, safety of the Port, and of theenvironment. In this regard the Port of Salalah adopted the APM Terminals’ Safety for Life program to improve uncompromisingly and continuously the port’s safety practice at all levels throughout the organization.

The Port sponsors a number of environmental projects in Oman including the EnviromentSociety of Oman and the Oman Whale and Dolphin Research Team in the ports aim of helping to promote knowledge and promote conservation efforts. The Port has also hosted seminars on pollution control and oil spill response, preparing personnel for any incident that might occur.The Port strongly believes that this type of training aimed at preventing incidents and protectingthe environment is a critical factor in the long term goals and success of the Port and the Region.

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Omanisation

Omanisation has been a key priority from the outset of the port’s establishment. The leadership provided by the Board of Directors and the port’s senior management emphasized from the very beginning the importance, economically and socially, of the employment of local nationals. Today the port is proud to have over 60% of the workforce represented by Omanis. Human capital development is at the forefront of successful companies, and the Port of Salalah is no exception. This is a program that has several aspects: recruitment and placement of the right talent, training for specific jobs, and career development to help employees advance, whether within or outside the organization. In particular, the company has placed great emphasis on the recruitment and development of Omani nationals as a cornerstone of its HR policy. By equipping young Omanis with the necessary skills to work and grow in a world-class transshipment terminal, the Port of Salalah aims to make a significant contribution not only to Oman’s economy, but crucially, also to support the development of the country’s human capital. The resultant benefits not only accrue to the port and the Dhofar region, but to the wider community as well.

The Port of Salalah has spared no efforts to train and develop its staff through a concerted and comprehensive HR program. State-of-the-art training facilities enable the Omani staff to be conversant with the latest port technology, thereby making it possible for the port to compete not only with local and regional ports, but internationally as well. Central to the Port of Salalah’s HR policy is a clear-cut strategy to actively support the career development of its Omani staff. As part of this strategy, Omani personnel are given the authority and responsibility to act within the scope of their job assignments, thereby encouraging them to perform with a sense of mission and dedication. They are also given the requisite tools to upgrade their skills and enhance their productivity and advancement opportunities.

The focus of training opportunities is not limited to enhancing the skill-sets of the Omani staff, but is more broad-based. It adopts a holistic approach to career and professional development, by encouraging employees to pursue higher learning opportunities, improve their language and communications skills, develop their understanding of health and safety, and to pass their knowledge and experience on through programs such as “train the trainer” and student internships. Underlining its commitment to Omanisation, the Port of Salalah has set up a purpose-built training centre that will underpin the company’s efforts in advancing the skill-sets of its existing staff, while preparing new staff for rewarding careers at the region’s leading transshipment hub.