COSCO Pacific, the port terminal operator arm of Chinese conglomerate COSCO Group, will pay 125.4 million euros ($143 million) for a 35 percent equity interest in the Europe Container Terminals facility at the Maasvlakte I area of the Port of Rotterdam.
COSCO Pacific, the port terminal operator arm of Chinese conglomerate COSCO Group, will pay 125.4 million euros ($143 million) for a 35 percent equity interest in Euromax Terminal Rotterdam, the company said in a statement late last week.
The move to acquire a minority stake in the Europe Container Terminals facility in the Maasvlakte I at Port of Rotterdam in the Netherlands will help COSCO Pacific to expand its overseas operations. ECT is a subsidiary of Hutchison Port Holdings Ltd., which is itself owned by Hong Kong billionaire Li Ka-shing’s CK Hutchison Holdings Ltd.
COSCO Pacific’s parent company the COSCO Group recently merged with fellow state-run firm China Shipping (CSCL), but no official announcements have yet been made as to how this will affect the terminal operation business going forward.
Euromax’s primary business is the operation of Euromax Terminal Rotterdam, an automatic container terminal located in the Maasvlakte I area at Port of Rotterdam in the Netherlands. The consideration for the acquisition comprises of 41.43 million euros for 35 percent of the share capital of Euromax and 84 million euros for 35 percent of a shareholder loan of 240 million euros owed by Euromax to ECT.
The facility has a total area of 1.21 million square meters, with a total quay length of 1,800 meters and a draft depth of 16.65 meters, including Phase 1 and Phase 2 expansion plans. The current operating capacity of Euromax Terminal Rotterdam is around 2.55 million TEUs, but that will increase to 3.2 million TEUs after the completion of Phase 2.
The terminal in 2015 reported a total throughput of about 2.28 million TEUs and a net profit after taxes of 2.76 billion euros, down from 3.97 billion euros the previous year.
According to the chart below, built with data from ocean carrier schedule and capacity database BlueWater Reporting, the container operations of COSCO and CSCL participate on a total of 12 direct region-to-region services currently calling at Rotterdam.
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The current CKYHE Alliance, of which COSCO is a member, operates five of the strings, all of which also include CSCL as a slot purchaser, and COSCO operates an additional service along with CKYHE members Yang Ming, Evergreen and “K” Line. The Ocean3 Alliance, which includes CSCL, operates three of the loops, and COSCO takes slots on all of those as well. The other three are operated by a variety of global container carriers such as CMA CGM and UASC (also members of the Ocean3 Alliance), Maersk Line and Hamburg Sud, and all of those include either COSCO, CSCL or both as slot takers.
Of those 12 services, five loops currently utilize the Euromax terminal: the CKYHE’s NE2, NE7 and NE3 strings and the Ocean3’s FAL23 and AEX1/AEC1, all of which serve the trade lane between Asia and Europe.
This arrangement could change significantly, however, as the merger between the container operations of COSCO and CSCL is completed and new ocean carrier alliances announced in the past month come into effect in April 2017. It would not be a surprise, for example, to see the new OCEAN Alliance, which includes the merged COSCO-CSCL group, CMA CGM, which recently purchased APL parent Neptune Orient Lines, Evergreen and OOCL, begin calling more often at the Euromax terminal.
In a similar move last fall, COSCO Pacific acquired a majority share in Fina Liman and Kumport, owners of Kumport Terminal in Istanbul, Turkey. The company in January announced plans to purchase a 67 percent stake in Piraeus, Greece’s largest cargo port.
The deal for Euromax is still subject to regulatory approval as well as the satisfaction of various other predetermined conditions. The transaction is expected to close either five business days following the satisfaction of those conditions or the fifth business day of the calendar month after they are met, whichever comes later, but COSCO noted that could change if the parties so desire.
“The Port of Rotterdam is the largest port in Europe,” the company said of the deal. “The Board believes that, based on the medium to long-term development trend, the Port of Rotterdam will continue to be Europe’s main hub.
“That port has been the base port of COSCO SHIPPING in North-western Europe for a long time. The Board expects COSCO SHIPPING to continue to deploy ultra-large container vessels to the European shipping route and call the Port of Rotterdam as its major hub in the region,” it added. “The company’s investment in a container terminal in the Port of Rotterdam is not only in line with the company’s strategy of investing in overseas hubs, but also coordinates with COSCO SHIPPING’s hub strategy, resulting in a good synergy.”
