Cosco Pacific, the marine terminals subsidiary of China's largest shipping company, is going ahead with a Euro120 million (HK$1.18 billion) expansion of Piraeus Container Terminal in Greece months earlier than planned.
This came after container volumes at Piraeus almost doubled in 2011 compared with a year earlier and despite renewed concern about the country's economic and political woes.
Ken Chan Hang, deputy general manager, said the firm was unlikely to be affected by the Greek crisis because most of the port's throughput was transshipment traffic.
'We continue to receive support from lines,' he said after the firm's annual general meeting yesterday.
Eddie Lui Sai-kit, the firm's financial controller, confirmed that construction work had started to create pier three as part of Cosco Pacific's 35-year concession to manage and operate the container terminal.
Cosco Pacific had secured a 12-year bank loan to finance the expansion although the loan repayments do not start until 2016.
Lui, commenting after the same meeting, said it was hoped to complete the work within three years, possibly by the end of 2014. This would allow the company to receive income from container storage for a year before bank repayments started.
Under the concession agreement for Piraeus Container Terminal, which started in October 2009, Cosco Pacific agreed to upgrade the capacity of the existing pier two from 1.6 million teu (20-foot equivalent units) to 2.6 million teu before 2014. The deal also stipulated that pier three be constructed before 2015.
Lui said construction at pier three had started early to provide more room for box storage because pier two was becoming congested.
Piraeus Container Terminal handled 1.19 million teu last year, up from 684,881 teu in 2010. But container volumes at the terminal surged more than 154 per cent to 679,600 teu in the first four months of this year, against 267,500 teu in the same 2011 period.
'Average container handling is 180,000 teu a month,' Lui said.
This is equivalent to 2.16 million teu per year. By comparison, total capacity of the upgraded pier two and the new pier three will be 3.7 million teu per year.
Aside from handling ships controlled by Cosco Container Lines, the terminal has calls from ships controlled by rival operators including China Shipping Container Lines, Taiwan's Evergreen Marine, Mediterranean Shipping and French container line giant CMA CGM.
Domestically, Cosco Pacific saw container volumes climb 11.9 per cent to 6.9 million teu in the first four months of this year at its Bohai Rim terminals including facilities in Qingdao and Tianjin.
By comparison, container volumes at the firm's Pearl River delta terminals, including those in Hong Kong, Shenzhen and Guangzhou, rose 8.7 per cent to 5.56 million teu.
In the Yangtze River Delta, Cosco Pacific's five terminals, including Shanghai and Ningbo, posted a 7 per cent rise in throughput to 2.5 million teu in the first four months of this year.
Although box volumes at the Bohai Rim terminals outpaced its other domestic facilities, Chan said: 'We still see sufficient capacity in northern China. We don't see a shortage.'
Ding Weiming, vice-chairman and chief executive at Florens Container, Cosco Pacific's container leasing company, said the business continued to do well.
Net profit from container leasing and sales climbed 20.9 per cent to US$116.5 million last year following an increase in the container fleet and the number of boxes on hire.