Rethink needed amid ports slump

Conglomerate Hutchison Whampoa's disappointing performance in its port business in Guangdong and Hong Kong underlines a worrying prospect for trade flow in the 'factory of the world', according to industry players.

The Li Ka-shing-controlled company's crown asset - Singapore-listed subsidiary Hutchison Port Holdings Trust (HPH Trust), which operates deep water container ports including Kwai Chung in Hong Kong and Yantian in Shenzhen - saw throughput volume fall 2 per cent in the first six months of the year compared with 2012.

Container flow was drying up as a result of economic turmoil in the United States and Europe - the mainland's top trade partners - and the relocation of mainland factories to Southeast Asia, analysts said.

This was a warning for the port and logistics industry about the need to reposition themselves and remap their corporate strategies, they added.

"The European market is in extremely bad shape, much worse than last year," said Yeung Chi-kong, vice-chairman of 53-year-old toy maker Bluebox Holdings. "We hope to chase back first-half's poor sales over the rest of the year, but the chance is slim."

The Dongguan-based toy maker, which like most other toy exporters uses the Yantian port for overseas shipments, expected the mainland to have shipped 10 per cent fewer toys to the US and Europe in the first-half.

Yeung is pessimistic about the outlook.