New buyers focused on Canadian investment and economic development.
A consortium led by Fiera Axium Infrastructure Inc. has acquired a 100-percent ownership interest in Montreal Gateway Terminals (MGT), the leading cargo container facility at the Port of Montreal, from Morgan Stanley Infrastructure Partners.
Morgan Stanley had previously purchased 80 percent of MGT, which operates the Racine and Cast terminals, in 2007 from Hapag-Lloyd. It acquired the remaining 20 percent in 2013.
“In Morgan Stanley Infrastructure Partners MGT has had a great investment partner and I am pleased that Fiera Axium takes the same collaborative, committed approach,” said MGT CEO Michael Fratianni. “These are local players with a long-term perspective and a commitment to regional economic development. They are dedicated to benefiting the entire Port of Montreal by investing in capital projects to further improve capacity, efficiency and technology at the terminals.”
Fiera targets investments in transportation, energy and social infrastructure, such as hospitals, schools, government and institutional buildings.
In addition to Fiera Axium Infrastructure Canada II L.P., the other consortium members include: the insurance subsidiaries and pension plan of Desjardins Group; the insurance and financial services company Manulife, which owns John Hancock; Fonds de solidarité FTQ, which invests in funds for over 600,000 savers and was created by the largest labor union in Quebec; and Industrial Alliance, another insurance company.
“These are iconic institutions in the Province of Quebec and beyond in Canada as well. It’s very important for them to see economic growth in the region,” said Fratianni.
The sale price for the terminal was not revealed. An article published by Bloomberg reported, “people with knowledge of the matter said last month that it was about C$650 million ($516 million).”
“This investment fits well within our core infrastructure strategy as Montreal Gateway Terminals represents an essential infrastructure asset,” said Stéphane Mailhot, president and chief operating officer of Fiera Axium Infrastructure Inc. “Our consortium is comprised of partners with a long-term investment horizon and vested interests in the economic development of greater Montreal, Quebec and Canada. We look forward to partnering with all key stakeholders to promote the Port of Montreal’s status as an international trade hub.”
“The same MGT team that has implemented so many of the operational improvements at the facility in recent years are excited by the transition and its positive impact on the gateway’s geographic diversification, global operations and international status,” said Fratianni. “With our new investment partners, we are confident that MGT will continue to raise the bar of reliable and consistent service to our customers who depend on predictable supply chains.”
Montreal Gateway Terminals is the largest container terminal operator at the Port of Montreal, moving about 800,000 TEUs through its two terminals in 2014 and serving seven global shipping lines. The company said MGT represents about 58 percent of all containers handled at the Port of Montreal. While volumes had dropped following the 2008 recession, Fratianni said they are now at pre-recession levels.
He said the terminal believes the Canada-European Comprehensive Trade and Economic Agreement (CETA) will result in additional volume coming through Montreal, saying it is a natural gateway for cargo moving between Canada and ports in North Europe and the Mediterranean.
Fratianni said the company handles four weekly services. Two are operated by Hapag-Lloyd and OOCL between Montreal and North Europe, and there is also a Hapag-Lloyd Service to and from the Mediterranean. Maersk Line and CMA CGM also operate a service between Montreal and North Europe.
In addition, Canada States Africa Line also calls at the Cast terminal.
Fratianni added the terminal has seen increased cargo moving to and from Asia and the Middle East, transshipped through Mediterranean ports such as Valencia, Spain and Gioia Tauro, Italy or in North Europe through Antwerp.
With many very large ships being deployed in trades between Asia and Europe “the shipping lines are going to have to work very hard to fill up these ships so I think we will see a little bit more transhipment activity in Med of cargo originiating from the Middle East and Asia and then making its way directly into Montreal.. We are pretty buoyant about the future,” Fratianni said.
He said the largest ships plying the St. Lawrence River are currently in the 4,400 TEU range, but he said the terminal can receive larger ships and port will be deepening so there is 11.1 meters alongside its terminal so it could accommodate post panamax ships.
“I would not be surprised if in the medium term we will see larger ships in the 5,500 to 6,500-TEU range,” said Fratianni.
Fiera Axium Infrastructure Inc. acquires Montreal Gateway Terminals from Morgan Stanley
