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China Cosco Group, the mainland's biggest shipping firm, is in talks to buy a controlling stake in an expansion project of a fast-growing port in Jiangsu province.
China Cosco was interested in taking a 55 per cent stake in a 6.6 billion yuan expansion in the northern Jiangsu port, said Huang Cheng, deputy party secretary of Lianyungang Port Group, which manages the terminal.
"We are in exclusive talks with Cosco Group now," said Mr Huang on the sidelines of the China Ports and Terminals Summit in Tianjin yesterday.
China Cosco signed a memorandum of understanding with Lianyungang and the final agreement would be inked by the end of this year, said Mr Huang. The 11 berths are due for completion by 2012.
China Shipping Group, the second-largest mainland shipping line, owns 55 per cent in five berths in Lianyungang, and construction will complete next year.
Shanghai's Yangshan Port invited Danish shipping line Maersk as its investor, while Tianjin also has Maersk and Cosco Pacific, a China Cosco unit, as its strategic shareholders in its Beigangchi port.
Lianyungang is expected to handle two million teu (20-foot equivalent units) this year, up from 1.3 million units last year, making it one of the fastest-growing container ports in the mainland.
However, facilities at Lianyungang are inferior to those in top-tier ports such as Shanghai. Out of 35 berths which serve container vessels, it has only four with a capacity of one million teu a year.
"Lianyungang will grow at a faster pace with the rise of the northwestern regions," Mr Huang said.
By the end of next year, the port will have 11 additional berths, boosting total capacity to four million teu.
Lianyungang serves 20 routes, with destinations including the United States, Canada, the Mediterranean Sea, Europe and Southeast Asia.
The port competes with Qingdao Port in Fujian province for shipments to Japan and Korea, Mr Huang said.
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