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China Merchants to develop four-berth port in Tianjin

Charlotte So

Container terminal operator will invest more than 3b yuan in expanding project

China Merchants Holdings (International), a mainland container terminal operator, plans to spend more than three billion yuan to develop a four-berth port in Tianjin.

The berths, at Dongjiang in the eastern part of the Tianjin port, will start construction in 2010 and be completed by 2012.

'Tianjin, Beijing and Hebei have promising development potentials which are worth looking into and investing in,' China Merchants chairman Fu Yuning said after a shareholders meeting yesterday.

The new investment came as Tianjin's municipal government last year earmarked 36.7 billion yuan to upgrade the port's capacity to 10 million teu (20-foot equivalent units) by 2010 from six million teu last year.

The Dongjiang region has been planned to become the mainland's largest custom-bounded zone within a port area. The custom-bounded zone offers tax rebate for exports and is tax-free for imported raw materials and semi-finished products.

China Merchants Group, the parent company of China Merchants, has signed a framework agreement with Tianjin Port Group to develop logistics, property and port facilities.

The four berths, with annual capacity of 600,000 to 700,000 teu each, will be built near a tax-free logistics facility comprising a warehouse with a floor area of 200,000 square metres.

Mr Fu said the container port would be built by China Merchants while the warehouses might be set up by the parent company.

Meanwhile, China Merchants has won approval from shareholders to increase its stakes in Shekou phase one and two.

Net profit generated by the two phases fell 30 per cent to 331 million yuan in the first nine months of last year from 472 million yuan in the same period in 2005.

The drop was due to a merger between shipping firms Maersk and P&O that led to the reshuffle of routes, China Merchants' deputy managing director To Wing-sing said.

Mr To said throughput at the Shekou port rebounded this year. He did not provide detailed figures.

The increase of its port stakes in the western part of Shenzhen, such as Shekou and Mawan, would help the company strengthen control in that area and improve efficiency, Mr Fu said.

Chiwan is the remaining port in the area that China Merchants has yet to streamline shareholder structure. Mr Fu said the reorganisation would continue but did not disclose the next target.

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