Dalian Port asset sales by parent to spur growth
Dalian Port (PDA), which operates the second-busiest container port in the country's northeast, said its parent PDA Corp is working on proposals to sell some assets to the Hong Kong-listed company to spur growth, according to a senior official.
Sun Hong, Dalian Port's chairman and PDA Corp's general manager, said the group was seeking to capitalise on the soaring demand for port and logistics services in Dalian.
'We are drafting proposals [on asset injections],' he said after the parent signed contracts on two investments in logistics services with United States-based ProLogis, the world's biggest logistics service provider.
Mr Sun declined to elaborate further on what was to be sold to Dalian Port and when.
The potential asset sales will give an instant boost to the rapidly growing Dalian port, which also operates the world's biggest crude-oil terminal.
PDA Corp, which runs 75 international container shipping routes as well as logistics and port facilities in Dalian, estimates its investment in expanding the port city's container harbour will be 35 billion yuan by 2010.
Dalian Port and PDA Corp had spent heavily on the Dayao Bay port development, at which the listed firm and its partners were investing about four billion yuan in the third terminal and the parent was teaming up with ProLogis developing logistics and storage services, Mr Sun said.
ProLogis and PDA Corp signed agreements yesterday to invest US$40 million to expand infrastructure inside a distribution centre in Dayao Bay port, bringing the total investment to US$160 million.
The two companies also agreed to invest US$50 million to build a new distribution centre in Shenyang, capital of Liaoning province.
Mei Zhiming, president of ProLogis China, said the new distribution centre in Shenyang would help companies inland streamline their logistics systems and improve distribution efficiency.
'As the world factory, China's bottleneck has been the high cost of distribution. It's the same for the northeast area. I think our new project in Shenyang will provide them with the kind of distribution service they need to be competitive globally,' Mr Mei said.
A number of multinational companies in nearby industrial parks in Shenyang, such as Coco-Cola, Michelin and Panasonic, would be the easy targets for ProLogis to pursue, though Mr Mei said no deals had been reached yet.