The credit crunch has hit many industries but it has not slowed new port investment in Ningbo.
China Merchants Holdings (International) and Citic Group said yesterday they would jointly develop a new port in Daxie to capitalise on the long-term export growth potential in the Yangtze River region.
Analysts predicted a total investment of 3.2 billion yuan (HK$3.63 billion) in the port, known as Port Zone C and located in Ningbo Daxie Development Zone, which will have a quay length of 1,600 metres and accommodate three or four container berths.
China Merchants will hold 20 per cent of the joint venture, while Shanghai Citic Port Investment will hold 41 per cent. Ningbo Port will have 39 per cent, according to the website of China Merchants.
The port is adjacent to the China Merchants International Terminal Ningbo Daxie, 45 per cent owned by China Merchants.
'It is understandable why China Merchants entered into the project,' said a transport analyst. 'It is the best way to mitigate competition between the two neighbouring ports.'
A China Merchants executive said: 'The timetable for the new project has yet to be finalised because it will depend on market demand and throughput growth in the region.'
Mainland cargo volume growth has started to slow this year as the unfolding financial crisis damps demand for industrialised goods.
Throughput growth in Shanghai slowed to 8.9 per cent in the first nine months from 20 per cent for all of 2007, while Ningbo's growth slid to 17 per cent in the first three quarters from 31 per cent last year.
Shenzhen's Chiwan Wharf, owned and operated by China Merchants, saw net profit shrink 20 per cent to 168.2 million yuan in the third quarter on modest cargo volume. Sales declined 5 per cent to 524.2 million yuan in the three months ended September from a year earlier.
Shenzhen-listed Chiwan Wharf yesterday report its third-quarter results, according to mainland accounting standards.
China Merchants shares rose 14.27 per cent to HK$17.94 yesterday.