PSA International acquires Chinese port container terminal
A subsidiary of PSA International has acquired a stake in a new container terminal company in Lianyungang Port in Jiangsu Province, China - its first major venture in the Yangtze River Delta region.
PSA International Pte Ltd, formerly Port of Singapore Authority is one of the world's largest port operators.
The Port of Lianyungang lies near the mouth of the Qiangwei River in northern Jiangsu Province in eastern China about 620 kilometers southeast of Beijing and 386 kilometers southwest of China's Port of Yantai. It is also located at the northern end of a canal network on the Yunyan River that is linked to countless salt pans located in the coastal districts of the province.
Singapore's PSA International won a tender floated by China Shipping Container Lines (CSCL) for its stake in the port.
According to sources, CSCL is in desperate needs of cash as it posted a net loss of 1.67 billion yuan (US$272 million) during the first nine months of the year. Shipping companies have been dumping assets this year in the wake of heavy losses as a result of a downturn in the shipping industry.
CSCL said it would sell its 55 % stake in Lianyungang port for 756 million yuan (US$123 million). The Lianyungang city government will acquire 6 % while PSA the remaining 49 % because the government is required to keep a controlling stake in port assets.
The latest acquisition is the latest in the Singaporean operator's efforts to expand in China. It already has 37 berths in seven terminals across five cities.
Tan Chong Meng, Group CEO of PSA, said:"Lianyungang's strategic location, established transport infrastructure and extensive hinterland offer tremendous potential for this joint venture to ride the waves of continuous growth in the Yangtze River Delta region"Bai Li Qun, Lianyungang Port Group chairman, said:
"Lianyungang Port handles the highest intermodal container volume by sea and rail in China, servicing the hinterland of Central and West China. The collaboration between PSA and Lianyungang Port Group will help to spur economic growth in the region."
The port made a net profit of 142 million yuan (US$23.1 million) in the first three quarters of the year, 4.76 % more than in the same period last year despite an 8.57 % drop in revenue.
Lianyungang container terminal has a designed capacity of 2.8 million teu and will be a premium facility to service the world's mega container vessels. It has 1,700m of quay length, Super-Port Panamax quay cranes and a water depth of 16.5m.
