Business Activities News
- China Merchants may add bulk terminals
Date: 6-Jul-2007 Sources: (Shenzhen Daily)
CHINA Merchants Holdings (International) Co., the owner of stakes in the country's five largest container ports, may invest in more dry-bulk terminals because of surging Chinese imports of iron ore and coal.
'We are studying China's long-term needs for resources and minerals to see if there is a shortage of bulk terminals,'' chairman Fu Yuning said Wednesday. The company is also planning to invest in more container terminals both in China and overseas.
China Merchants has boosted profit five years in a row because the country's surging exports of toys, clothes and other goods has fueled demand for container shipments. The company now plans to increase its investments in bulk terminals because of rising imports of raw materials in China, already the biggest user of steel, rubber, coal and other commodities.
'Bulk is a good business as China's economic growth will spur domestic trade and demand for bulk cargo shipments,'' said Paul Chan, who helps manage about US$1.8 billion at Invesco Asia Ltd. in Hong Kong.
China's coal imports surged 44 percent in the first five months of the year from a year earlier, while steel product exports more than doubled to 27.4 million tons, according to the county's customs agency.
China Merchants and its subsidiaries, including Shanghai International Port (Group) Co., operate 132 bulk cargo berths. Volume rose 69 percent last year to 149 million tons. The company's container traffic climbed 64 percent to 40.24 million 20-foot boxes.
The company has container terminals in Hong Kong, Shanghai, Shenzhen, Qingdao, Ningbao, Tianjin and Zhanzhou. It has also agreed to take a 14 percent stake in the 7.27 billion yuan (US$957 million) Dachan Bay Phase II project in Shenzhen, it said June 25. It may also invest in another container terminal in the northern city of Tianjin, Fu said.
China Merchants plans to add more facilities in China because of the country's booming export growth, he added.
'China's container terminals enjoy nice growth,'' Fu said. 'We don't see any problem to meet double-digit growth for the next five years.''
The country may handle more than 100 million boxes this year, he added. Chinese ports' handled 93.6 million 20-foot equivalent units last year, more than triple 2001's tally.
China Merchants may also invest in more ports overseas. Its parent has already agreed to invest in a US$1 billion project led by Vietnam National Shipping Lines to build a deep-water port near Ho Chi Minh City.
'We will explore similar opportunities elsewhere,'' said Fu, who is also president of China Merchants Group. 'I don't mind looking beyond Asia,'' he added.
The company may struggle to win overseas investments because of competition from rivals including Hutchison Port Holdings Ltd. and Singapore-based PSA International Pte, the world's two-largest container terminal operators, and because of political opposition, said Invesco's Chan.
'It will be more difficult for Chinese companies to invest overseas in strategic ports,'' he added.
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