Hutch building up intra-Asia business

Hutchison Port Holdings (HPH) has set its sights on becoming a major entrepot player for intra-Asian cargo traffic, after making its name in the transhipment business in Hong Kong.


HPH, a port developer and operator, is a unit of Hutchison Whampoa, which is planning to spin off its port assets in Hong Kong and mainland China into a business trust to be listed on the Singapore Exchange,reported the Straits Times.


Speaking at a media briefing in Singapore, HPH managing director John Meredith refused to be drawn into discussing the upcoming listing as the prospectus is still being finalised.


Instead, he focused on HPH's future direction.


He noted that intra-Asian cargo shipments around the region had grown by 40 per cent last year.


The rapid growth was due partly to the free trade agreement between China and Asean, which took effect last year. In addition, demand for consumer goods had surged because of Asia's rising purchasing power.


"We would prefer handling intra-Asian traffic to doing the transhipment business even,'' Meredith said.
"The reason is that our revenue from handling transhipments is less than that from handling intra-Asian cargo.''


Transhipment refers to the practice of stopping at a port to transfer cargo from one ship to another, usually a smaller vessel.


An entrepot is a port where the shipper may place and hold his cargo for as long as necessary without having to pay import duties, before shipping them to their final destination.


The "awakening'' of Asia's trading activity will benefit not just major Asian ports such as Hong Kong and Singapore, but also European exporters, Meredith noted.


"We're seeing increased exports now from Europe, because of Asia's purchasing power. It used to be the other way around - that Asia was selling everything to Europe. But manufacturing figures coming out of Europe now are surprisingly strong.''


Apart from growing its entrepot business, HPH is in the midst of expanding several of its ports worldwide to accommodate the larger vessels that are being built today.


The company operates 51 ports in 25 countries. According to the latest available data, its ports handled a combined throughput of 65.3 million boxes in 2009, which represented about 14 per cent of the world's container traffic.


HPH is also in negotiations with the governments of four countries regarding port development projects. They range from building a port from scratch to modernising an existing port, Meredith said.
(Source:http://www.cargonewsasia.com)