A joint venture involving three Chinese shipping companies has invested $135 million in Taiwan's largest port, marking the biggest single investment on the island so far by mainland-based organizations.
China Merchants Holdings (International) Co Ltd said it and other two Chinese shipping companies - COSCO Pacific and China Shipping Terminal (Hong Kong) Development Co Ltd - had formed Tripartite JV, which has agreed to acquire a 30 percent stake in Kao Ming Terminal at the Port of Kaohsiung.
It is buying the stake from Yang Ming Marine Transport Corp, one of Taiwan's leading container shippers.
The $135 million acquisition is also the first port and infrastructure investment in Taiwan made by any Chinese mainland organization since a policy was issued in 2009 to allow mainland investment on the island.
In a statement, China Merchants said it believes the industry background of each of the joint venture partners and their respective mainland parent companies had laid a good foundation for the development of Kao Ming Terminal into a regional container hub.
The investment is now awaiting approval by authorities in the mainland and in Taiwan.
Gong Li, an analyst at Industrial Securities, said the investment in such an important port was a breakthrough.
He added the cooperation should be viewed as a good example of how to bring about stronger trading relationships between the Chinese mainland, Taiwan and Hong Kong, and it could be used as a model for closer future economic and trade deals.
Each party in the Hong Kong-based Tripartite JV will ultimately hold a 10 percent stake in Kao Ming Terminal.
Upon completion of the acquisition, the terminal will be 60 percent-owned by Yang Ming Marine, 30 percent by the Tripartite, and 10 percent by Ports American Group, the largest terminal operator in the US.
Li Zhou, an analyst with Qilu Securities, said the structure of the deal was similar to other investments made in ports around the world by large international shipping companies.
Kao Ming Terminal is the only terminal that can accommodate vessels of 14,000 -twenty-foot equivalent unit or more at the Kaohsiung Intercontinental Container Terminal.
Yang Ming Marine has been granted a 50-year concession to develop and operate the site for a total investment of around NT$180 billion ($620 million).
The company has four 100,000-ton berths, all of which are less than two years old, occupying a total area of 748,000 square meters, on a 1,500-meter long quay.
By 2014, the annual capacity of the terminal will have increased to 2.8 million twenty-foot equivalent units.
The Port of Kaohsiung is Taiwan's largest port and busiest transshipment hub, and handled about 70 percent of its total container throughput last year.
yuran@chinadaily.com.cn
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