Shenzhen port operators seek new revenue sources
October 31, 2012 Category Logistics, Ports & sea transport
Faced with stagnant growth, port operators in Shenzhen are investing in faster-growing ports in other parts of the country and diversifying their business. “Shenzhen port companies are already investing in other mainland ports. They think northern ports have greater growth potential,” said Ma Yongzhi, Vice Director General of the Shenzhen Port Administration. In the first eight months of this year, container throughput at Shenzhen,China’s second-busiest port and the world’s fourth-busiest, grew 1.4% to 15.09 million TEU, according to official data. At Ningbo, China’s third-busiest port, throughput rose 8.7% to 10.8 million TEU. “I won’t rule out the possibility of Ningbo surpassing Shenzhen in future,” said Bank of China Analyst Matthew Xu. “A lot of industries are shifting from the Pearl River Delta to the Yangtze River Delta and central China including Chongqing, which benefits Ningbo. What the Shenzhen port companies are doing is to find a new source of growth. Investing in other areas is the only way for the business to grow.” Shenzhen Yantian Port Holdings paid CNY1.36 billion for a 35% stake in the port of Caofeidian in Hebei province in August last year. It said the aim of the investment was to create a new profit growth driver. “The company will use this investment to extend its business to the Bohai Sea, which is of great strategic importance and will benefit the company’s long-term development,” it said. In the first half of this year, Yantian Port booked its first profit of CNY32.54 million from Caofeidian. This was a significant portion of overall group profit, given that it dropped 23.62% to CNY179.79 million in the period. Caofeidian’s cargo throughput jumped 70.8% to 23 million tons in the first half. In contrast, the container throughput of Yantian International Container Terminals, a joint venture between Yantian Port and Hutchison Port Holdings, dropped 7.95% to 1.31 million TEU. It also invested in other ports and even in toll roads. Yantian Port’s toll-road subsidiary in Xiangtan, Hunan province, made a significant contribution to its revenue of CNY160.3 million in the first half. While revenue from Shenzhen’s port operations fell 12.84% to CNY150.26 million, Xiangtan’s rose 25.25% to CNY10.04 million.
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