Facing stagnant growth, port operators in Shenzhen in south China are investing in faster-growing ports in other parts of the country and diversifying their business.
“Shenzhen port operators think northern ports have greater growth potential,” said Ma Yongzhi, a vice-director general of Shenzhen Port Administration.
In the first nine months of this year, throughput at Shenzhen, China’s second-busiest container port, rose just 2.9% to 17.3M TEU.
By comparison, Ningbo, China’s third-busiest port, saw throughput rise 9.9% to 12.3M TEU. “There is the possibility of Ningbo surpassing Shenzhen in the future,” said Bank of China analyst Matthew Xu.
“A lot of industries are shifting from the Pearl River Delta to the Yangtze River Delta and central China, which benefits Ningbo.
“What Shenzhen port companies are doing is to find a new source of growth. It’s pretty obvious the growth of Shenzhen will slow or stagnate in the next couple of years. Investing in other areas is the only way for the business to grow,” he said.
In August last year, Shenzhen Yantian Port Holdings paid US$215.41M for a 35% stake in Caofeidian port in Hebei province, which handles preimarily dry and liquid bulk cargoes. “The company will use this investment to extend its business to the Bohai Sea, where Caofeidian is located and will benefit the company’s long-term development,” it said.
In the first half of this year, Yantian Port booked its first profit of US$5.17M from Caofeidian. This was a significant portion of overall group profit, given that it dropped 23.62% to US$28.57m in the period.
In August 2010, Shenzhen Chiwan Wharf Holdings acquired a 40% stake in Laizhou port for US$119.13M. Laizhou, at the mouth of the Yellow River in Shandong province, is a hub for bulk cargo including oil, minerals and metals.
The port was highly profitable, Chiwan Wharf said. “The company believes Laizhou has great development potential, especially in oil, coal and minerals.”
By subscribing you will have:
