Cosco Pacific eyes ports abroad
The firm is focusing on its core businesses after selling an asset for US$1.2 billion
Cosco Pacific says it is in advanced talks to buy ports on the mainland and in Southeast Asia and Greece because of their attractive prices.
The port operator, which is set to pocket US$1.2 billion from selling its container manufacturing unit to its parent Cosco Group, wants to further focus on its core business - port and container leasing businesses - when the global economy recovers.
Opportunities in Southeast Asia as ties with China improve would bring in more trade. Some factories have left China to set up in the region to take advantage of lower labour and land costs as well as more beneficial tax treatments from Europe and the United States.
"We have been pressing hard to invest in ports in Indonesia, Myanmar and Malaysia," said Qiu Jinguang, a deputy managing director at Cosco Pacific, after the company's annual shareholders' meeting yesterday.
Cosco Pacific is jostling for overseas port projects with its counterpart, China Merchants Holdings (International), which recently outperformed Cosco Pacific by securing port projects in Tanzania and acquiring a stake in French firm Terminal Link, which operates 15 mainland and overseas terminals.
Wang Xingru, a vice-chairman of Cosco Pacific, said the backing from China Cosco Group, which operates one of the largest container shipping lines, would help them to secure port deals.
"Ports authorities are welcoming us as their investors as we can bring more shipments to them," Wang said.
Piraeus Container Port in Greece turned around in 2011 after two years of losses after Cosco Pacific took control of the operation in 2009.
Cosco Pacific brought in new shipping line customers and pier workers when the ports in Spain and Italy were affected by strikes.
Wang said they were interested in acquiring stakes in the Piraeus Port Authority as Greece was obliged to privatise its state-owned enterprises in accordance with the European Union's bailout package.
Cosco Pacific is also talking to mainland port authorities, including those in Qingdao, Guangzhou and Rizhao, as they were in the process of listing their port assets on the stock market.