DUBAI-BASED DP World has won approval to build a facility in northern China's second-busiest port as it seeks to catch up with Hutchison Whampoa Ltd and other rivals in the country.
DP World will finance the 3.48 billion yuan (US$450 million) terminal in Qingdao with 1.22 billion yuan in cash and borrow the rest.
The port operator plans to expand in China and India after it was forced to sell six terminals in the United States. DP World trails larger rivals Hutchison Whampoa and PSA International Pte in China, where cargo volume is growing at twice the rate of global trade.
"DP World is still pretty small compared to its competitors" in China, said Michael Chan, a Hong Kong-based analyst at Macquarie Bank Ltd. "Qingdao is still a good growth area."
The new terminal will raise Qingdao's capacity by about a third, Chan said. DP World will construct two berths at the port capable of handling 2.2 million 20-foot standard containers a year.
DP World already has a joint venture in Qingdao, 350 kilometers southeast of Beijing on China's northeast coast, which can handle as many as 16,800 containers a day, according to the company's Website. Qingdao is China's third-busiest container port."We are always looking at opportunities in China," DP World Chairman Sultan bin Sulayem said. "China is very important for us."
DP World has stakes in terminals in Tianjin and Shanghai, China's busiest container port. It agreed to sell its minority stake in terminals in the southern port of Shenzhen to China Merchants Holdings (International) Co for HK$1.78 billion (US$228 million), it said on December 15.
The Qingdao expansion includes two berths capable of handling 100,000-ton container ships and two berths to handle 30,000-ton ships, the statement said. DP World will have a 50-year contract to operate the terminal.
Chinese ports handled 23 percent more standard containers in the first 11 months of last year, more than twice the 8.9 percent growth pace expected for global trade in 2006 by the International Monetary Fund. China boosted its exports of toys, clothing and other goods 27 percent last year. Imports rose 20 percent.
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