China Merchants Port looks to partner with carrier to stabilise growth
CHINA Merchants Port is seeking co-operation with other container shipping lines to ride out economic headwinds that are impacting its throughput growth
CHINA Merchants Port is seeking co-operation with other container shipping lines to ride out economic headwinds that are impacting its throughput growth.
One of its new objectives is to attract equity investment from carriers involved in some new and existing port projects operated by the Hong Kong-listed operator, a subsidiary of state conglomerate China Merchants Group, according to its managing director Bai Jingtao.
'We are in talks with them, and selecting the projects,' Mr Bai told Lloyd's List on the side lines of a results press conference in Hong Kong.
The move comes as closer ties are being cemented between ports and the liner shipping industry, as the latter sector has become increasingly consolidated - through the mergers and alliance reshuffles of recent years - and subsequently become more influential on port traffic.
Cosco Shipping Ports chairman Zhang Wei said it normally took between five years and seven years to break even for a greenfield project, however, his company was confident of 'reducing that time significantly' backed by the world's third-largest box ship fleet of its parent.
'More and more ports are teaming up with carriers nowadays,' Mr Bai said. 'This is perhaps something that we all have to do at the current stage of the industry.'
He added that such a strategy will help shorten the 'incubation period' of a new port project and shore up handling volume, which is especially important for transshipment hubs.
The comments also coincide with a struggle in throughput growth faced by CM Port's terminals, both in domestic and overseas markets amid a slowing global economy and mounting geopolitical uncertainties.
CM Port's total container throughput rose by just 1.4 per cent year on year in the first half of 2019 to stand at 54.6 million TEU, while recurrent net profit from ports operation fell by 4.9 per cent to HK$2.7 billion (US$338 million).
Mr Bai forecasts full-year throughput growth of two to three per cent, the slowest since 2009.
A breakdown of the results showed that CM Port's box handling in mainland China grew 1.3 per cent in the first six months of the year, while that in Hong Kong and Taiwan decreased by 4.7 per cent. Volume generated by overseas facilities rose by four per cent.
Throughput at Colombo International Container Terminals in Sri Lanka rose by 5.75 per cent, but was down from the 16.4 per cent growth registered the year-ago period.
One major exception was CM Port's TCP Participacoes SA in Brazil, which benefited from the shift of cargo flows amid the US-China trade war, Mr Bai said. There volumes were up 70 per cent to 440,000 TEU, on the back of growth in the trade of agricultural and meat products.