China Shipping acquires Damietta stake

News was prepared under the information support of Online Daily Newspaper on Hellenic and international Shipping "Hellenic Shipping News".

29 Nov 2007

As part of its efforts to diversify into cargo terminal handling, the China Shipping (Group) Company has signed a 20% acquisition of Egypt's container port of Damietta.Egypt is in one of the most important routes in the Europe-Asia trade lane and according to one analyst, players like China Shipping want to 'secure berth capacity by investing in key ports'. Other joint venture partners in the $200 million six berth project include Kuwait's KGL International Terminal, the CMA CGM Group and United Arab Shipping Co. First phase development of the six berths is expected to be completed and come on stream end 2008 with a handling capacity of 2.5 million TEUs per year. Completion of second phase development is slated to boost the port's handling capacity to 4 million TEUs per year. Chinese shipping majors like COSCO Container Lines and China Shipping Container Lines, the fifth and sixth largest shipping lines in the world respectively, are increasing their presence in worldwide ports so as to secure container berth capacity in their ports of call. Egyptian ports have recently been the target for investments from major shipping players such as COSCO Pacific which owns a share of Port Said which is only 70 kilometres from Damietta. Its proximity to the Suez Canal and intermediate point between Africa, Europe and the Mediterranean Sea has made Egypt an 'important transshipment hub' on the Europe-Asia trade lane. In terms of domestic acquisitions, China Shipping unit - China Shipping Terminal Development (CS Terminal) also recently signed an agreement for a container terminal joint venture with the Yingkou Port Group. The Yingkou project boasts throughput capacity of one million TEUs and officials are expecting the joint venture to handle more than 600,000 TEUs per year. According to China Shipping Group president Li Shaode, the Group is eager to expand its global port business and plans are in motion to 'inject assets acquired into' the Group's shipping arm the China Shipping Container Lines.