CMHI looking for overseas M&As to boost container throughput

Li Xiaopeng, chairman of Hong Kong-listed China Merchants Holdings International (CMHI), said Friday the company plans to expand container throughput by overseas mergers and acquisitions amid the slow economic recovery and sluggish global trade.

“We haven’t owned projects in Central and South America so far,” said vice president Hu Jianhua, “Currently, I think it is an appropriate time to consider buying local projects because port assets have devalued following weak local currencies.”

CMHI’s business will follow “One belt, One road” opportunities, Hu said, adding that its big interest in further developing the port business in Sri Lanka was no secret. “We wish to have more progress on ports buildings and operations in Sri Lanka.”

Sri Lanka’s Colombo International Container Terminals (CICT), majority owned by CMHI, saw its container throughput grow by 127.5 per cent year on year, reaching 1.56 million TEUs in 2015. The first five months of 2016 have seen CICT’s container throughput increase by 30 per cent over the same period last year.

However, the company’s overseas business experienced uneven growth, with Tin-Can Island Container Terminal Limited (TICT) in Nigeria seeing a drop in container throughput during the first five months.

Container throughput handled by the group’s global ports operations is up 8.7 per cent year on year in the first five months. The group’s ports in mainland China contributed container throughput growth of 11.1 per cent year on year, largely outpacing that of overseas operations at 3.2 per cent in the first five months.

“The decline of China’s import and exports will have some negative impact on our business growth,” said Li. “But [we expect to see] a recovery in exports and imports in the second half of this year with the proceeding of China’s reforms.”

China’s exports fell 1.8 per cent in April from a year earlier while imports dropped 10.9 per cent in the same month from a year earlier.

CMHI’s operations in Hong Kong continued to decline in the first five months but Li said he is confident of Hong Kong remaining an international port hub. Group president Li said he is willing to cooperate with Hong Kong billionaire Li Ka-shing if his Hutchison group considers the sale of its port assets.