Hutchison Port Holdings Trust's sale of a 60 percent stake in Asia Container Terminals has opened up almost 1.4 km of quay space that will allow Hong Kong to handle mega container ships increasingly calling at Asia's hub ports.
Cosco Pacific acquired a 40 percent stake in ACT and China Shipping Terminal Development took 20 percent in the US$316 million deal. HPHT bought ACT from DP World just last year for $503 million.
Asia Container Terminals occupies two of the prime berths at Container Terminal 8 West. The sale now enables HPHT's Hongkong International Terminals (HIT) and its partners to join the 740-metre quay with Cosco-HIT's joint venture CT8 East that comprises two berths totalling 640m.
The new mega container vessels flooding into service are over 400m long and most of the capacity ordered by the world's top carriers is in this category. HPHT and its partners will be able to handle three of the new generation ships at one time at the 1,380m quay that will have a capacity of two million TEUs a year.
China Shipping Terminal Development (CSTD) managing director Fang Meng said in a statement: "The single contiguous 1,380-metre berth at Container Terminal 8 will enable us to establish Hong Kong port as a key container shipping hub for the deployment of ultra large containerships, including the 19,000 TEU vessels that are scheduled for delivery in November."
Hong Kong transport analyst Charles de Trenck said the berth was already contiguous but the business structure would allow more flexible vessel operations between the berths for Cosco and China Shipping Container Line ships that already call there.
"For instance, the 19,000 TEU CSCL ship coming from Hyundai will go there, and more of these ship types will go there as soon as they come off the production lines," he said.
The asset sale has again raised speculation that the city's most famous resident, Asia's richest man Li Ka-Shing, is planning to dispose of all his Hong Kong port interests following the 2011 decision to spin off the port arm of Hutchison Whampoa on the Singapore Exchange.
But De Trenck believes the sale is a good move. "ACT handled 1 million TEUs in 2012 and 1.1 million in 2013. This is the best terminal after CT9 and better integrating it into CT8 East will be win-win for all. No reason why throughput cannot rise substantially over a few years," he said.
HPH Trust CEO Gerry Yim said the sale would "enhance the city's competitiveness and bolster all aspects of port operations including flexibility, efficiencies, synergies and profitability".
Profitability at Hutchison's port arm has been hard to find recently. HPHT saw its profits fall 25 percent last year as the effects of a strike at HIT last summer hit operations and resulted in a one-off concession to liners, and the acquisition of ACT was factored in. Fourth quarter earnings plunged 47 percent.
Analysts believe the weak result and the mature state of the Hong Kong market is encouraging HPHT to monetise assets while maintaining control. Back in 2006, then HPH sold 20 percent of the company to rival PSA International.
The long-term future of Hong Kong port is also in doubt, with throughput at the container terminals last year falling two percent to 17,118 million TEUs and overall throughput of 22,253 million boxes lower than 2005 levels.
HIT saw 12.4 percent fewer boxes crossing the 14 berths it has interests in last year mainly because of a drop in transshipment cargo for the US and Europe.
Shenzhen port overtook Hong Kong in 2013 to become the world's third busiest container port behind Singapore and Shanghai in the top spot.Hutchison Port Holdings Trust's sale of a 60 percent stake in Asia Container Terminals has opened up almost 1.4 km of quay space that will allow Hong Kong to handle mega container ships increasingly calling at Asia's hub ports.
Cosco Pacific acquired a 40 percent stake in ACT and China Shipping Terminal Development took 20 percent in the US$316 million deal. HPHT bought ACT from DP World just last year for $503 million.
Asia Container Terminals occupies two of the prime berths at Container Terminal 8 West. The sale now enables HPHT's Hongkong International Terminals (HIT) and its partners to join the 740-metre quay with Cosco-HIT's joint venture CT8 East that comprises two berths totalling 640m.
The new mega container vessels flooding into service are over 400m long and most of the capacity ordered by the world's top carriers is in this category. HPHT and its partners will be able to handle three of the new generation ships at one time at the 1,380m quay that will have a capacity of two million TEUs a year.
China Shipping Terminal Development (CSTD) managing director Fang Meng said in a statement: "The single contiguous 1,380-metre berth at Container Terminal 8 will enable us to establish Hong Kong port as a key container shipping hub for the deployment of ultra large containerships, including the 19,000 TEU vessels that are scheduled for delivery in November."
Hong Kong transport analyst Charles de Trenck said the berth was already contiguous but the business structure would allow more flexible vessel operations between the berths for Cosco and China Shipping Container Line ships that already call there.
"For instance, the 19,000 TEU CSCL ship coming from Hyundai will go there, and more of these ship types will go there as soon as they come off the production lines," he said.
The asset sale has again raised speculation that the city's most famous resident, Asia's richest man Li Ka-Shing, is planning to dispose of all his Hong Kong port interests following the 2011 decision to spin off the port arm of Hutchison Whampoa on the Singapore Exchange.
But De Trenck believes the sale is a good move. "ACT handled 1 million TEUs in 2012 and 1.1 million in 2013. This is the best terminal after CT9 and better integrating it into CT8 East will be win-win for all. No reason why throughput cannot rise substantially over a few years," he said.
HPH Trust CEO Gerry Yim said the sale would "enhance the city's competitiveness and bolster all aspects of port operations including flexibility, efficiencies, synergies and profitability".
Profitability at Hutchison's port arm has been hard to find recently. HPHT saw its profits fall 25 percent last year as the effects of a strike at HIT last summer hit operations and resulted in a one-off concession to liners, and the acquisition of ACT was factored in. Fourth quarter earnings plunged 47 percent.
Analysts believe the weak result and the mature state of the Hong Kong market is encouraging HPHT to monetise assets while maintaining control. Back in 2006, then HPH sold 20 percent of the company to rival PSA International.
The long-term future of Hong Kong port is also in doubt, with throughput at the container terminals last year falling two percent to 17,118 million TEUs and overall throughput of 22,253 million boxes lower than 2005 levels.
HIT saw 12.4 percent fewer boxes crossing the 14 berths it has interests in last year mainly because of a drop in transshipment cargo for the US and Europe.
Shenzhen port overtook Hong Kong in 2013 to become the world's third busiest container port behind Singapore and Shanghai in the top spot.
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