Hutchison Port Holdings Ltd., the world's largest port operator, said it will spend $523 million to build and operate a new container terminal in Ecuador as it seeks to tap Latin America's economic growth.
The Hong Kong-based company received a 30-year concession to operate the terminal, which is scheduled to open in 2007, Hutchison Port said today in an e-mailed statement. The port operator didn't disclose the capacity of the terminal located in Manta, Ecuador's second-largest port.
Hong Kong billionaire Li Ka-shing's Hutchison Port, PSA International Pte and other port operators have been investing to build more terminals as global trade expands, which the International Monetary Fund expects to grow 7.6 percent this year. Latin American and Carribean economies will probably expand 5 percent in 2006, driven by rising commodities prices.
Manta, a deep-sea port on the Pacific Ocean, will ``strengthen Hutchison Port's Latin America network on the West Coast of South America,'' the company's Managing Director John Meredith said in the statement. ``Being the closest port to Asia, the new terminal will benefit from the growing trade activities between the two regions.''
Latin America and Carribean economies will grow for the fourth year in 2006, the longest stretch of expansion, a United Nations Commission said on July 25.
When completed, the Manta terminal will have a quay length of 1,250 meters for container handling and a total area of 63 hectares, Hutchison Port said. Hutchison Whampoa Ltd. controls the port operator.
The Manta port handled 39,233 20-foot standard containers last year, 54 percent more than in 2004, according to the Manta Port Authority's Web site.
Expansion Thrust
Hutchison Whampoa has more than 10 ports in development and has no plans to sell more port assets, its Chairman Li said on May 18. He didn't say where the new ports are located.
The port operator aims to boost investments in Eastern Europe, the Middle East and other regions, Meredith said on March 8. The company also wants to expand in Latin America and Africa, he said.
The sea port business accounted for 28 percent of Hutchison Whampoa's earnings before interest and taxes in the first half, the company's largest profit segment. The terminals in Shanghai and Yantian in the southern Chinese city of Shenzhen drove growth in port earnings.
Hutchison Whampoa also invests in cell-phone networks, operates drug stores and develops property.
Latin American Ports
Hutchison Port operates 251 berths in 43 ports worldwide, including those in Argentina, Bahamas, Mexico and Panama. Its cargo volume in the first half rose 12 percent to 27.5 million 20-foot containers.
The company will help build a 660 million-euro ($846 million) container terminal in Barcelona, it said in June.
Hutchison Whampoa agreed to sell 20 percent of Hutchison Port to Singapore's PSA International Pte for $4.4 billion in April. The sale generated a HK$24.4 billion gain for the Hong Kong company, helping first-half profit to double to HK$18.8 billion ($2.4 billion).
India rejected a bid by Hutchison for Indian port projects on national security grounds, P. Mohana Chandran, secretary of the Mumbai Port Trust said on Aug. 31. He didn't elaborate on the reasons why the company failed the security procedure.
Hutchison Whampoa shares fell 0.1 percent in Hong Kong to HK$69.60, the lowest closing price in almost two months. The stock has dropped 5.8 percent this year, compared with a 15 percent gain in the benchmark Hang Seng Index.
