China's Ningbo port on way to regain glory
Fast-growing traffic, strong investment and closeness to factories will soon turn it into a major port, says shippers' council
Ningbo stands a fair chance of overtaking Shenzhen as the mainland's second-busiest port and the world's fourth-busiest in a few years.
The government of the city on the coast of Zhejiang province has stated its aim of developing a major international port and has been investing aggressively in making that a reality.
Shanghai, Hong Kong, and Shenzhen are the three busiest ports in that order, but all three have been suffering from stagnant growth, while Ningbo has been enjoying much faster growth.
"Ningbo will become one of the major international ports. In fact, it is an international port now," said Willy Lin Sun-mo, chairman of the Hong Kong Shippers' Council.
From the funds raised from its IPO in Shanghai in September 2010, Ningbo Port, the city's port operator, will invest 10.95 billion yuan (HK$13.5 billion) in four terminals from 2010 to 2014, according to the company.
One container terminal in Beilun district will receive 5.59 billion yuan of investment from 2010 to 2014 and the container terminal of Jintang district will receive 1.26 billion yuan from 2010 to 2013.
The Beilun and Jintang container terminals will add five million twenty-foot equivalent units (teu) of annual container capacity. The two other terminals to benefit are another container terminal and a coal terminal.
In the past three quarters, 12.76 billion yuan was invested in Ningbo port, accounting for 80 per cent of the planned investment for the entire year, according to the Zhoushan government website. "There is a total push to create a major international port and ocean-going logistics centre," it added.
Ningbo port includes the port of Zhoushan city, which is next to the original Ningbo harbour.
Recently, the bonded zone of Zhoushan port gained 10 investment contracts totalling 13 billion yuan, according to the website of the Zhejiang Provincial Development and Reform Commission.
This includes a 4.5 billion yuan investment in a fuel-oil facility by a subsidiary of Brightoil group, the parent company of the Hong Kong-listed Brightoil Holdings; and a 5.3 billion yuan investment in a non-ferrous metal facility by US commodities firm Louis Dreyfus.
"There is a possibility Ningbo may overtake Shenzhen because it has been enjoying fast growth. The question is whether it can sustain its growth. The gap between Ningbo and Shenzhen is still large," said Northeast Securities analyst Xiang Xu.
In October, Ningbo's container throughput rose 14.2 per cent to 1.41 million teu, while its cargo throughput rose 14.8 per cent to 38.65 million tonnes, said Ningbo Port.
In the first nine months this year, the container throughput at Ningbo rose 9.9 per cent to 12.3 million teu, while that of Shenzhen grew 2.9 per cent to 17.3 million teu; and Shanghai increased 1.9 per cent to 24.2 million teu, official data shows.
In container throughput, Ningbo's global ranking climbed to sixth last year from 30th in 2002, said Ningbo Port president Li Linghong. "The past 10 years was the period of Ningbo port's most rapid growth."
Among the world's 30 largest ports, Ningbo has seen the fastest growth over this 10-year period, said Li.
Ningbo's container throughput increased 3.8 times to 433 million tonnes last year from 154 million tonnes in 2002, while its container throughput grew more than eight times to 14.5 million teu from 1.86 million teu in 2002, Li added.
Ningbo is closer to factories in the Yangtze River Delta than Shanghai, just as Shenzhen is closer to factories in the Pearl River Delta than Hong Kong, Lin said.
"It provides proximity to manufacturing and cheaper prices than Shanghai, so it will grow quickly."
Manufacturing in Zhejiang province is also better supported than in the Pearl River Delta, claimed Lin, with the local government providing central heating and water treatment facilities to its factories. "With the Chinese government trying to focus on domestic business, Ningbo will benefit from domestic and intra-Asian trade," he added.
Ningbo's rapid development harkens back to its tradition of being an important port in Chinese history, Lin said.
The city has been a port since the Han dynasty 2,000 years ago.
The late Hong Kong shipping tycoon YK Pao was born in Ningbo, Lin pointed out. "Ningbo people have it in their blood to create a major port."