COSCO enters European port market
COSCO Pacific Ltd., part of the China Ocean Shipping Co. group, is entering the European container terminal business by acquiring a shareholding in a joint venture with P&O Ports that is developing a large container terminal in the port of Antwerp.
COSCO Pacific, the ports and container leasing arm of the big Chinese group, will buy a 25 percent share in Antwerp Gateway. Antwerp Gateway will operate a terminal with an initial capacity of about 1.4 million TEUs when its first phase of development in completed in mid-2005.
“This acquisition further reflects the company’s strategy of and commitment to diversifying its investments and market presence geographically,” COSCO Pacific said in a statement. Today, COSCO Pacific operates container terminals in mainland China and in Hong Kong.
COSCO’s arrival in the European terminal business follows, by several years, those of the other two major Asian container terminal operators, Singapore-based PSA and Hong Kong-based Hutchison.
COSCO has agreed to pay an initial price of about 3 million euros ($4 million) for its new share in the Belgian venture, reflecting costs incurred to date. However, P&O Ports said it expects the project to be funded by a combination of debt provided by a syndicate of banks and equity provided by shareholders, including COSCO, in proportion to their shareholdings.
Following the transaction, the shareholders in Antwerp Gateway will be P&O Ports (42.5 percent), COSCO (25 percent), P&O Nedlloyd (25 percent) and Duisport (7.5 percent).
The COSCO group includes COSCO Container Lines, while the P&O group has a 25-percent shareholding in P&O Nedlloyd Container Line. A spokesman for P&O said COSCO has given volume commitments to the Antwerp terminal on behalf of COSCO Container Lines.
Having handled 5.45 million TEUs in 2003, Antwerp is the third-largest container port in Europe after Rotterdam and Hamburg.
In April, P&O Ports signed a 40-year concession with the Antwerp port authority to equip and operate a new container terminal at Deurganckdok.
The terminal will eventually have six berths, with a quayline of 2,450 meters (8,040 feet), a draft of 17 meters (56 feet) and an annual handling capacity of more than 3.5 million TEUs. The development is expected to be fully completed in 2010. Antwerp Gateway is expected to have a total development cost of 530 million euros ($689 million).