Maersk places order for 10 mammoth ships
Daewoo Shipbuilding & Marine Engineering has won a US$2 billion order from A P Moeller-Maersk to build 10 vessels of 18,000 TEU capacity each, the world's biggest container ships.
Saturday, February 19, 2011
Monday, February 14, 2011
PORT FINANCING
Hutch to use IPO funds for port expansion
John Meredith, managing director of Hutchison Port Holdings, reckons that ports are ideal assets for a business trust and added that Hutchison would use the funds to be raised by the business trust IPO in Singapore to expand ports agressively.
"We are chasing ports in four countries," Meredith says. "Some are completely greenfield, where you have to go in and dredge and reclaim the land. Others are semi-built and just require modernisation — new equipment, new systems — and, structurally, the port is there."
"Even in a downturn, the port industry did not suffer anything like the shipping companies did," he said, during a press conference, reported The Edge.
"Ports are very resilient. They can take a lot of knocks. In the 40 years we've been operating, we've never had a year in which it's been negative growth — except in 2009, and it recovered very quickly."
Hutchison Port Holdings is part of Hong Kong billionaire Li Ka-shing's Hutchison Whampoa group, which said last month that it planned to spin off its existing and future deep-water container ports in Guangdong, Hong Kong and Macau into a Singapore-listed business trust. The IPO is expected to raise some US$6 billion, a record for the Singapore market. Hutchison Whampoa will retain a 25 percent interest in the trust.
With no listing documents filed yet, however, Meredith was unable to offer any further information on the upcoming IPO. But he had plenty to say about Hutchison Port Holdings, the largest port operator in the world, with an annual throughput of 65.3 million TEUs.
"You have something physical where you can go and kick the tyres. You have a hard asset, and it's a good industry," he says, adding that the company's main assets are in Hong Kong, Guangdong and Panama.
So, why is Hutchison Port Holdings planning to spin off some of its key assets? For one thing, building a port is an expensive exercise, frequently costing up to $1 billion. And, the company is in expansion mode now.
Besides requiring large amounts of cash to build, developing a new port often gets bogged down in governmental and legal issues, underscoring the need for an amply capitalised balance sheet. Meredith cites his company's efforts to expand in Mexico as an example.
"We gave some of our managers an exercise of finding a location in Mexico that could be linked by rail to the [US border]," he says, adding that the new port would be an alternative to Los Angeles. "Unfortunately, the negotiations became mired in legality. We called it Project Thomas, after Thomas the tank engine. It would have been $5 billion and a joint venture with the US."
Meredith says the project is still pending. Hutchison Ports Holdings already operates four ports in Mexico.
Apart from investing in new ports, Meredith is also focused on organic growth. "Every year, we increase our capacity without [adding] a location," he says. That involves investment in modern equipment to make its ports more productive.
"We buy new systems — GPS, advanced computer systems. We are the world's largest purchaser of marine dock equipment. Those cranes you see down at PSA, we actually have 500 of those around the world." Meredith says the size of its purchases enables it to get a better deal on port equipment than most other port operators.
Hutchison Port Holdings has interests in 51 ports across 25 countries. But, its assets closer to home will be of most interest to investors awaiting the listing of its new business trust.
In Hong Kong, the company operates Hong Kong International Terminals — owner and operator of Terminals 4, 6, 7 and two berths in Terminal 9 at Kwai Tsing in Hong Kong — as well as Cosco-HIT, owner and operator of Terminal 8 East, also at Kwai Tsing. In 2005, PSA International bought a 20 percent stake in both HIT and Cosco-HIT for US$925 million. That's likely to see PSA becoming a key investor in the new business trust.
John Meredith, managing director of Hutchison Port Holdings, reckons that ports are ideal assets for a business trust and added that Hutchison would use the funds to be raised by the business trust IPO in Singapore to expand ports agressively.
"We are chasing ports in four countries," Meredith says. "Some are completely greenfield, where you have to go in and dredge and reclaim the land. Others are semi-built and just require modernisation — new equipment, new systems — and, structurally, the port is there."
"Even in a downturn, the port industry did not suffer anything like the shipping companies did," he said, during a press conference, reported The Edge.
"Ports are very resilient. They can take a lot of knocks. In the 40 years we've been operating, we've never had a year in which it's been negative growth — except in 2009, and it recovered very quickly."
Hutchison Port Holdings is part of Hong Kong billionaire Li Ka-shing's Hutchison Whampoa group, which said last month that it planned to spin off its existing and future deep-water container ports in Guangdong, Hong Kong and Macau into a Singapore-listed business trust. The IPO is expected to raise some US$6 billion, a record for the Singapore market. Hutchison Whampoa will retain a 25 percent interest in the trust.
With no listing documents filed yet, however, Meredith was unable to offer any further information on the upcoming IPO. But he had plenty to say about Hutchison Port Holdings, the largest port operator in the world, with an annual throughput of 65.3 million TEUs.
"You have something physical where you can go and kick the tyres. You have a hard asset, and it's a good industry," he says, adding that the company's main assets are in Hong Kong, Guangdong and Panama.
So, why is Hutchison Port Holdings planning to spin off some of its key assets? For one thing, building a port is an expensive exercise, frequently costing up to $1 billion. And, the company is in expansion mode now.
Besides requiring large amounts of cash to build, developing a new port often gets bogged down in governmental and legal issues, underscoring the need for an amply capitalised balance sheet. Meredith cites his company's efforts to expand in Mexico as an example.
"We gave some of our managers an exercise of finding a location in Mexico that could be linked by rail to the [US border]," he says, adding that the new port would be an alternative to Los Angeles. "Unfortunately, the negotiations became mired in legality. We called it Project Thomas, after Thomas the tank engine. It would have been $5 billion and a joint venture with the US."
Meredith says the project is still pending. Hutchison Ports Holdings already operates four ports in Mexico.
Apart from investing in new ports, Meredith is also focused on organic growth. "Every year, we increase our capacity without [adding] a location," he says. That involves investment in modern equipment to make its ports more productive.
"We buy new systems — GPS, advanced computer systems. We are the world's largest purchaser of marine dock equipment. Those cranes you see down at PSA, we actually have 500 of those around the world." Meredith says the size of its purchases enables it to get a better deal on port equipment than most other port operators.
Hutchison Port Holdings has interests in 51 ports across 25 countries. But, its assets closer to home will be of most interest to investors awaiting the listing of its new business trust.
In Hong Kong, the company operates Hong Kong International Terminals — owner and operator of Terminals 4, 6, 7 and two berths in Terminal 9 at Kwai Tsing in Hong Kong — as well as Cosco-HIT, owner and operator of Terminal 8 East, also at Kwai Tsing. In 2005, PSA International bought a 20 percent stake in both HIT and Cosco-HIT for US$925 million. That's likely to see PSA becoming a key investor in the new business trust.
Sunday, February 13, 2011
PORT FEASIBILITY STUDIES
Kuantan Port City can attract RM38bil investments by 2020
KUALA LUMPUR: Kuantan Port City (KPC) is projected to attract up to RM38bil investments by 2020, and help the East Coast Economic Region (ECER) and the country’s first Special Economic Zone located within it, to be an industrial and logistics hub.
The ECER encompasses Kelantan, Terengganu and Pahang as well as the Mersing district in Johor.
KPC forms one of the main components of the development corridor. Encompassing 12,667ha, the completed project will see a throughput of 24 million tonnes, create 44,785 jobs and contribute RM9.3bil to the local economy by 2020.
According to a shipping analyst, KPC projects would certainly transform Kuantan Port into a mega port as the development calls for the expansion of Kuantan Port.
He said feasibility studies had been completed. “With new port facilities, it will enable the port to receive vessels above 40,000 tonnes or the next generation of container ships,” he said.
The analyst said KPC’s integrated development would also result in petrochemical, palm oil, automotive, container markets, as well as a major industrial and manufacturing zone serving the entire Asia-Pacific region.
He said KPC would also be the site for a Palm Oil Industrial Cluster (POIC) with one of its manufacturing components specialising in the downstream palm oil industry and the petrochemical cluster. Construction work at the POIC began in September last year. “The port city will improve the income and skills of the population while providing them with convenient and safe access to modern and efficient facilities and infrastructure,” the analyst said.
The Integrated Master Plan for KPC has been finalised and was handed over to the Kuantan Municipal Council last year.
Meanwhile, improvements in KPC’s main infrastructure, such as roads and drainage system, commenced this year.
To improve the water quality in KPC, a two-km water pipeline in Gebeng was completed and was handed over to the Pahang Water Supply Department in March last year. Land clearing and survey works for the construction of Panching Water Treatment Plant, are ongoing.
Once completed, the water treatment plant will have a capacity of 160 million litres per day, which will ensure adequate water supply, particularly in the Gebeng area.
To serve KPC, a multimodal network of highways, roads, railway and airports will move people and goods between KPC and the hinterland or the industrial clusters.
A logistics and distribution centre located near the port will also substantially improve the handling of goods.
KPC covers the existing Gebeng industrial area and Kuantan Port, up to the Mardi Institute in the north and the Pahang border in the west. — Bernama
KUALA LUMPUR: Kuantan Port City (KPC) is projected to attract up to RM38bil investments by 2020, and help the East Coast Economic Region (ECER) and the country’s first Special Economic Zone located within it, to be an industrial and logistics hub.
The ECER encompasses Kelantan, Terengganu and Pahang as well as the Mersing district in Johor.
KPC forms one of the main components of the development corridor. Encompassing 12,667ha, the completed project will see a throughput of 24 million tonnes, create 44,785 jobs and contribute RM9.3bil to the local economy by 2020.
According to a shipping analyst, KPC projects would certainly transform Kuantan Port into a mega port as the development calls for the expansion of Kuantan Port.
He said feasibility studies had been completed. “With new port facilities, it will enable the port to receive vessels above 40,000 tonnes or the next generation of container ships,” he said.
The analyst said KPC’s integrated development would also result in petrochemical, palm oil, automotive, container markets, as well as a major industrial and manufacturing zone serving the entire Asia-Pacific region.
He said KPC would also be the site for a Palm Oil Industrial Cluster (POIC) with one of its manufacturing components specialising in the downstream palm oil industry and the petrochemical cluster. Construction work at the POIC began in September last year. “The port city will improve the income and skills of the population while providing them with convenient and safe access to modern and efficient facilities and infrastructure,” the analyst said.
The Integrated Master Plan for KPC has been finalised and was handed over to the Kuantan Municipal Council last year.
Meanwhile, improvements in KPC’s main infrastructure, such as roads and drainage system, commenced this year.
To improve the water quality in KPC, a two-km water pipeline in Gebeng was completed and was handed over to the Pahang Water Supply Department in March last year. Land clearing and survey works for the construction of Panching Water Treatment Plant, are ongoing.
Once completed, the water treatment plant will have a capacity of 160 million litres per day, which will ensure adequate water supply, particularly in the Gebeng area.
To serve KPC, a multimodal network of highways, roads, railway and airports will move people and goods between KPC and the hinterland or the industrial clusters.
A logistics and distribution centre located near the port will also substantially improve the handling of goods.
KPC covers the existing Gebeng industrial area and Kuantan Port, up to the Mardi Institute in the north and the Pahang border in the west. — Bernama
SHIPPING-CONTAINER TRADE
Monday January 31, 2011
Delicate outlook for container, dry bulk
By SHARIDAN M. ALI
sharidan@thestar.com.my
PETALING JAYA: Container and dry-bulk shipping sectors in the Asia-Pacific are still facing uncertain times.
Slower demand from Europe and a stream of newbuildings that was anticipated to enter the market this year were factors impinging on the container shipping sector, said investment banking group Nomura International (HK) Ltd in a report recently.
Meanwhile, the dry-bulk sector continued to suffer from oversupply of vessels, and was currently hampered by low freight rates due to the recent floods in Australia, it said.
Nomura remains cautious on the container shipping sector as demand growth in Europe is set to be slower than that in the United States.
The key earnings driver would be the Asia-to-Europe routes, which experienced higher margins and profitability last year.
“Supply of vessels is likely to be focused on those exceeding 10,000-TEUs (twenty-foot equivalent units).
“The order book is skewed towards this segment, which accounts for 45%. The supply of vessels of this size is set to grow by 98% this year,” it said.
However, Nomura said port and route limitations were preventing these large vessels from operating on many Asia-to-US routes.
“Carriers also face cost pressures from higher bunker oil prices and terminal-handling charges, primarily from Chinese ports,” it said.
Nomura estimates that Asia-to-Europe freight rates would drop by 4% this year while trans-Pacific freight rates would increase 1% despite the fact that annual contracts, for which negotiation usually ends in May, are likely to be concluded marginally lower this year.
“The main reason for these diverging freight rates is the way the routes are structured, mainly on a quarterly basis for the Asia-to-Europe routes and annually for the trans-Pacific routes.
“We also estimate that Asia-to-Europe routes would have higher spot contracts and a greater percentage of freight forwarders on the European routes than end-users on the US routes,” it said.
For dry-bulk shipping, Nomura said oversupply, slower demand and inflation concerns continued to plague the outlook for sector.
“While we believe these are valid concerns, we estimate that current freight rates are at artificially low levels due to bad weather and flooding problems in Australia,” it said.
With iron ore and coal each accounting for 30% and 27% of total volumes, Australia is a key export region of the raw materials, given that the continent is the largest exporter of iron-ore and second-largest of thermal coal globally.
“Once the Australian flooding problem eases, we expect a rebound in freight rates, although this will still be lower than historical highs, given the problem with the supply of vessels,” it added.
Nomura said supply growth remained a concern for the sector. Despite record newbuilding deliveries last year, orderbook as a percentage of current fleet remains at 52%.
“We estimate net supply growth of 11.3% in 2011 and 2012 respectively, after factoring in a 42% newbuilding delivery slippages in both years.
“This is higher than in 2010 with newbuilding slippage of 36% due to lower freight rates this year and 2012,” it said, adding that scrapping was the wild card, given that 31% of the existing fleet was over 20 years old.
Newbuilding delivery slippages refers to new vessels that do not enter the market.
Nevertheless, Nomura remained relatively optimistic that demand for iron ore and coal (thermal and coking) would remain strong.
Delicate outlook for container, dry bulk
By SHARIDAN M. ALI
sharidan@thestar.com.my
PETALING JAYA: Container and dry-bulk shipping sectors in the Asia-Pacific are still facing uncertain times.
Slower demand from Europe and a stream of newbuildings that was anticipated to enter the market this year were factors impinging on the container shipping sector, said investment banking group Nomura International (HK) Ltd in a report recently.
Meanwhile, the dry-bulk sector continued to suffer from oversupply of vessels, and was currently hampered by low freight rates due to the recent floods in Australia, it said.
Nomura remains cautious on the container shipping sector as demand growth in Europe is set to be slower than that in the United States.
The key earnings driver would be the Asia-to-Europe routes, which experienced higher margins and profitability last year.
“Supply of vessels is likely to be focused on those exceeding 10,000-TEUs (twenty-foot equivalent units).
“The order book is skewed towards this segment, which accounts for 45%. The supply of vessels of this size is set to grow by 98% this year,” it said.
However, Nomura said port and route limitations were preventing these large vessels from operating on many Asia-to-US routes.
“Carriers also face cost pressures from higher bunker oil prices and terminal-handling charges, primarily from Chinese ports,” it said.
Nomura estimates that Asia-to-Europe freight rates would drop by 4% this year while trans-Pacific freight rates would increase 1% despite the fact that annual contracts, for which negotiation usually ends in May, are likely to be concluded marginally lower this year.
“The main reason for these diverging freight rates is the way the routes are structured, mainly on a quarterly basis for the Asia-to-Europe routes and annually for the trans-Pacific routes.
“We also estimate that Asia-to-Europe routes would have higher spot contracts and a greater percentage of freight forwarders on the European routes than end-users on the US routes,” it said.
For dry-bulk shipping, Nomura said oversupply, slower demand and inflation concerns continued to plague the outlook for sector.
“While we believe these are valid concerns, we estimate that current freight rates are at artificially low levels due to bad weather and flooding problems in Australia,” it said.
With iron ore and coal each accounting for 30% and 27% of total volumes, Australia is a key export region of the raw materials, given that the continent is the largest exporter of iron-ore and second-largest of thermal coal globally.
“Once the Australian flooding problem eases, we expect a rebound in freight rates, although this will still be lower than historical highs, given the problem with the supply of vessels,” it added.
Nomura said supply growth remained a concern for the sector. Despite record newbuilding deliveries last year, orderbook as a percentage of current fleet remains at 52%.
“We estimate net supply growth of 11.3% in 2011 and 2012 respectively, after factoring in a 42% newbuilding delivery slippages in both years.
“This is higher than in 2010 with newbuilding slippage of 36% due to lower freight rates this year and 2012,” it said, adding that scrapping was the wild card, given that 31% of the existing fleet was over 20 years old.
Newbuilding delivery slippages refers to new vessels that do not enter the market.
Nevertheless, Nomura remained relatively optimistic that demand for iron ore and coal (thermal and coking) would remain strong.
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