Shanghai port to take majority stake
Updated: 2008-01-15 09:27
Shanghai International Port Group Co (SIPG), China's largest port by cargo throughput, yesterday said it will take a majority stake in the proposed joint venture with Jiujiang port, a move seen as part of the company's strategy to secure outbound freight in the lower and middle reaches of the Yangtze River.
According to a statement to the Shanghai Stock Exchange, SIPG will hold 91.67 percent of the joint venture, worth an estimated 550 million yuan ($75.76 million).
Jiujiang port, controlled by the Jiujiang State-owned asset supervision and administration commission, is one of the 13 major ports along the Yangtze River. The Jiujiang asset commission will hold the remaining 8.33 percent stake.
SIPG operates Yangshan deepwater port, east of Hangzhou Bay. On completion by 2020, the port will be one of the world's largest with a capacity of handling 20 million twenty equivalent units (TEUs) of containers a year.
"Leveraging on the Yangshan deepwater port, SIPG is increasing the transit cargo ratio of total throughput, which is an important parameter for judging the size and efficiency of an international shipping center," said Li Yuezhen, a press officer for SIPG.
Li said purchasing Jiujiang port was part of the company's expansion strategy along the Yangtze River. "The company will invest in more ports in the middle and lower reaches of the Yangtze in future to explore central and western China as the new freight sources."
"The move is also in response to the government's call to build a national navigation hub to better serve the Yangtze River Delta and the inland areas," she added.
Lu Congzhen, a marine industry analyst at Orient Securities in Shanghai, said the purchase of more inland ports would not only benefit SIPG but also the entire marine industry in China.
"The inclusion of Jiujiang port and others river ports in SIPG's map helps the company expand the freight sources in the industrial heartland in central and west China," said Lu.
Industry analysts say Shanghai is playing a crucial part in helping integrate the transportation systems in the Yangtze River Delta region. "SIPG's cooperation with more inland river ports helps consolidate Shanghai's position as the nation's shipping center," said Qian Hongwei, an analyst at CITIC China Securities.
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