P&O, PARTNERS TO INVEST $200 MILLION IN SHEKOU EXPANSION

P&O, PARTNERS TO INVEST $200 MILLION IN SHEKOU EXPANSION

   P&O Ports, Swire Pacific Ltd., Modern Terminals Ltd. and China Merchants Holdings (International) Co. Ltd. will expand the fast-growing Shekou container terminal in China, at a cost of about $200 million.

   A joint venture between the four European and Asian companies, will develop phase two of the Shekou container terminal in Shenzhen. The joint venture has a term of 50 years.

   Adjacent to the phase one terminal, the phase two port facility will add 500,000 TEUs in annual container handling capacity, bringing the combined capacity of Shekou to 1.8 million TEUs.

   Voctor Investments Ltd., a subsidiary of China Merchants, will own 51 percent of the port venture; P&O Ports will have 20 percent; Modern Terminals 19.4 percent and Swire Pacific 9.6 percent.

   The shareholders of the phase one development of Shekou, were China Merchants, P&O Ports, Swire Pacific and China Ocean Shipping Co.

   The Shenzhen market in China, served by the ports of Shekou, Yantian and Chiwan, has seen rapid growth over the last few years. Despite the global trade slowdown in 2001, the terminals located in Shenzhen reported year-on-year volume growth of approximately 20 percent last year, to 4.8 million TEUs. Shekou phase one handled 751,000 TEUs last year, and is expected to be operating at full capacity when the phase two terminal commences.

   “As Shekou phase one has achieved satisfactory returns, we believe that our investment in Shekou phase two is the right decision,” said Fan Jian Xiong, of China Merchants.

   Modern Terminals said that the Pearl River Delta region continues to show very strong growth, and the new terminal capacity at Shekou will be very timely.

   The terminals of Shekou compete head on with Yantian International Container Terminals, the large port facility run by Hong Kong-based port group Hutchison Port Holdings and in which the A.P. Moller group also owns a stake.

   Last November, Hutchison signed official agreements with the Shenzhen government and Yantian Port Group to jointly develop phase three of Yantian International Container Terminals, a development that will add two million TEUs in handling capacity.