Cosco Shipping takes stake in Peruvian terminal
The partnership between Cosco Shipping and Volcan marks a major milestone in addressing the longstanding deficiency in port infrastructure in Peru
Hong Kong Stock Exchange listed Cosco Shipping Ports Limited (CSP) announced that it will establish its first greenfield subsidiary in South America by acquiring 60% stake in Terminales Portuarios Chancay S.A. (Chancay Terminal) in Peru.
On 23 January, Cosco announced that it is acquiring the stake from Volcan Compañía Minera S.A.A (Volcan) for US$225million, with an initial payment of US$56million. Volcan is one of the world's leading polymetallic mining companies.
At a ceremony held in Davos, Switzerland, Zhang Wei, vice chairman and managing director of Cosco Shipping Ports and José Picasso, chairman of Volcan signed the agreement on behalf of the two parties.
Cosco Shipping said in a statement that it would partner with Volcan to build Chancay Terminal into an important gateway port in Peru. Chancay Terminal owns the land, so there is no need for concession rights payments, allowing financial resources to be directed towards developing the terminal.
Located 58 kilometres to the north of the Peruvian capital of Lima, the Port of Chancay enjoys a favourable location with easy access to the economic centre of Peru. The country has enjoyed solid economic growth in recent years, and container throughput grew from 1.5 million TEU in 2010 to 2.5 million in 2017.
Chancay is a natural deep-water harbour with a maximum 16 metres of water-depth and is capable of satisfying the needs of mega vessels. The construction of Chancay Terminal includes multi-purpose terminals, container terminals and related infrastructure facilities.
Phase one of the terminal will have four berths, of which two are multi-purpose berths, and two are container berths with a total annual designed capacity of one million TEU.
"Upon completion of the construction of Chancay Terminal, the port will not only further strengthen the international operational capabilities of Chinese corporations, but will also further enhance the economic development of Peru," Xiao Yaqing, chairman of state-owned Asset Supervision and Administration Commission of the State Council, PRC, (SASAC), said at the signing ceremony.
"The investment in Chancay Terminal enables us to further extend our reach to South America," added Zhang Wei, vice chairman and managing director of Cosco Shipping Ports. "The prospective terminal at Port of Chancay will be the company's first terminal in South America and should help reduce the deficiency in port infrastructure in Peru."
Chancay Terminal is the first terminal project invested by Chinese companies in South America, and the deal has received strong support from both the Chinese and Peruvian government.
In a sign of the importance of the project, also present at the signing ceremony in Davos were Dai Dongchang, deputy minister of Ministry of Transport of the PRC, Mercedes Aráoz, Vice President of Peru, Luis Chávez Basagoitia, ambassador of Peru in the Switzerland, and Huang Xiaowen, executive vice president and party committee member of Cosco Shipping.
The Cosco Shipping Ports terminal portfolio covers the five main port regions in Mainland China, Southeast Asia, Middle East, Europe and the Mediterranean. As at 30 September 2018, CSP operated and managed 282 berths at 36 ports worldwide, of which 192 were for containers, with a combined annual handling capacity of 104 million TEU.
The controlling shareholder of Cosco Shipping Ports is Cosco Shipping Holdings Co, Ltd. Its ultimate parent company, China Cosco Shipping Corporation Limited, is the largest integrated shipping enterprise in the world.
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12 Feb 2019