China Merchants to invest in 10 more overseas ports
China Merchants Holdings International (CMHI) is planning to invest in about 10 more overseas ports as the state-owned company continues its global expansion and implementation of China’s One Belt One Road strategy.
CMHI is looking for new investment opportunities in several regions, including southeast Asia, east and west Africa, southern Africa, the Baltic Sea and Russia, Bai Jingtao, managing director, CMHI, told IHS Fairplay.
“It is important for the nation of China to build international connections so it can develop together with different countries. Our development plan mirrors One Belt One Road and this is the primary driver of our expansion strategy. We continue to look for more partners to work with overseas.”
New projects would be announced over the course of the next five years and beyond, as CMHI locates suitable partners and deals, Bai said. “We need to find the right partners in the right locations. Different countries and organisations have different visions and we need to find those whose goals and approach can complement our own.”
It was in 2008 that CMHI began its overseas expansion and the group now has interests in more than 320 berths in 29 ports in 15 countries and regions. It has invested in Belgium, Djibouti, France, Côte d’Ivoire, Malta, Morocco, Nigeria, South Korea, Sri Lanka, Taiwan, Togo, Turkey, and the United States. In China it has operations in Dalian, Hong Kong, Ningbo, Qingdao, Shanghai, Shenzhen, Tianjin, Xiamen, Zhangzhou, and Zhanjiang.
Similar to the overseas projects already complete or under way, the new projects will be holistic in nature and designed to help drive the economic development of the countries and regions in which they are located. Broadly, the project components include development of physical port infrastructure, supporting information technology platforms, logistics operations facilities, export reprocessing zones, exhibition centres, and customs and cross-border clearance capabilities.
“This is the broad vision and it is modelled on the service stations along the ancient Silk Road, which were much more than simply places where goods were loaded and unloaded. Clearly, the nature of the projects depends on individual scenarios and some will not require us to develop all of these elements,” said Bai.
CMHI is engaging closely with shipping lines and the alliances in order to bring new services to drive growth at its terminals and ports.
“We are providing infrastructure to support the development of these countries. As national infrastructure, the ports cater for economic development: they drive growth and national export trade. As a port operator we need commercial benefits, so there is synergy between the needs of the countries we invest in and our own business.”
Bai said he was pleased with the status and progress of the projects the group had announced recently.
These include investment as part of a consortium in Turkey’s third-largest container terminal, Kumport. The terminal has a capacity of 1.84 million teu with room to expand to 3.5 million teu and can handle vessels up to 18,000 teu in size.
The joint venture, known as Consortium SPV, purchased of 65% of the terminal and CMHI holds a 40% stake in the venture.
The large greenfield project at Bagamoyo in Tanzania on Africa’s east coast is still in planning stage, with negotiations continuing with the local port authority ahead of the start of work.
Closer to home, CMHI announced in December that it would acquire a 21.05% stake in Dalian Port Co, making it the second-largest shareholder of the northeast China port operator. News of the investment followed closely on the announcement of a merger of Sinotrans & CSC with China Merchants Group in a move aimed at increasing competitiveness through synergies and scale as the group extends its presence in overseas markets.
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