China Merchants seeks port building projects offshore

SHENZHEN's China Merchants Group, a terminal investor that moves 33 per cent of China's container traffic, is on the lookout for offshore port building projects as it expects the China trade growth to slow in 2011.

"In 2011, there will be volume growth, but it won't be as stellar as 2010," company chairman Fu Yuning told Bloomberg in an interview, but he would not be drawn on specifics. "Slower growth rates in the US and Europe could also affect China's trade."

Mr Fu forecasts a 20 per cent increase in 2010 China Merchant volumes against a 13 per cent decline in 2009.

Already the state-controlled company plans investments in Nigeria, Sri Lanka and Vietnam and has already bought Australia's Loscam Ltd to enter the pallet-pooling market.

"It's a good time to buy overseas assets as trade is rebounding," Kenny Tang, of Redford Assets Management in Hong Kong told Bloomberg. "China Merchants is also well-placed to benefit from China's still fast growth in imports and exports."

In China, China Merchants has port operations in cities including Shanghai, Shenzhen and Hong Kong. Its container terminal units handled 43.9 million boxes last year.

The company also agreed to pay HK$131.4 million (US$17 million) for a 20 per cent holding in the Pearl River Delta freight handling unit of Chu Kong Shipping Development Co as government develops river traffic China-wide.

"China offers vast business opportunities," Mr Fu said. "The country is still undergoing rapid urbanisation and that creates demand for infrastructure, demand for trade and for financial services."

China Merchants Group, founded in 1872, has operations in areas including banking, real estate and shipping in addition to its ports unit.
(Source:www.schednet.com)