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China Merchants eyes dry-bulk terminals

(Bloomberg)
Updated: 2007-07-05 10:05

China Merchants Holdings (International) Co, which owns stakes in the country's five largest container ports, may invest in more dry-bulk terminals because of surging Chinese imports of iron ore and coal.

"We are studying China's long-term needs for resources and minerals to see if there is a shortage of bulk terminals," Chairman Fu Yuning said.

The company is planning to invest in more container terminals both in China and overseas.

China Merchants' profits have risen for five straight years as the surge in exports of toys, clothes and other goods has fueled demand for container shipments.

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The company now plans to increase its investment in bulk terminals because of rising imports of raw materials into China.

"Bulk is a good business as China's economic growth will spur domestic trade and demand for bulk cargo shipments," said Paul Chan, who helps manage about $1.8 billion, including China Merchant shares, at Invesco Asia Ltd in Hong Kong.

China's coal imports surged 44 percent in the first five months of the year from a year earlier, while steel product exports more than doubled to 27.4 million tons, according to Customs figures.

China Merchants and its subsidiaries, including Shanghai International Port (Group) Co, operate 132 bulk cargo berths. Volume rose 69 percent last year to 149 million tons. The company's container traffic climbed 64 percent to 40.24 million 20-foot boxes.

Shares of China Merchants have gained 61 percent in the past 12 months, compared with a 36 percent rise in the benchmark Hang Seng Index.