BEIJING: State-owned conglomerate China Merchants Group is looking to invest in a port in Lithuania as it attempts to extract more growth from overseas footholds.
The Port of Klaipeda, the major seaport in the eastern European country, could serve as a gateway connecting the Baltic Sea to neighbouring landlocked Belarus, where China is investing US$5 billion to build a massive industrial park from scratch, China Merchants chairman Li Jianhong told the South China Morning Post yesterday.
“We are in discussion with local port authorities on detailed investment plans. We’ve recently bought a 20 per cent stake in the China-Belarus Industrial Park and have also committed to build a 1 sq km commerce and logistics park in the industrial area,” Li said after the annual shareholder meeting of the group’s port subsidiary China Merchants Holdings (International) (CMHI).
The China-Belarus Industrial Park is 25km from Belarusian capital Minsk and 500km from the Baltic Sea. Chinese firms include Huawei and ZTE have decided to set up plants in the 80 sq km area that will also encompass residential buildings and shopping malls.
Li, a member of President Xi Jinping’s delegation during a state visit to Belarus three weeks ago, declined to specify an investment amount, but said the Lithuania move would be in line with CMHI’s strategy of expanding footholds around the world.
“The industrial park is longing for better access to export goods and we can help with our expertise in port and logistics operations,” Li said.
Hong Kong-listed CMHI has been leading the charge in China’s overseas port ambitions. It is best known for a green-field investment in the Colombo Container Terminal in Sri Lanka, and the €400 million (HK$3.38 billion) acquisition of a 49 per cent stake in Terminal Link, a port company controlled by French shipping line CMA CGM. The company also operates the west Shenzhen port in Chiwan and Shekou, along with equity interests in eight mainland ports and Modern Terminals in Hong Kong.
Group executive vice-president Hu Jianhua said CMHI had been in talks with “relevant parties” to expand the capacity of the Colombo terminal, where throughput is expected to soon meet the existing capacity.
“Colombo is on track to be the hub port for South Asia, expected to handle 1 million [twenty-foot equivalent units (teu)] this year. The current designed capacity is 2.4 million teu, which could easily be reached in two to three years,” Hu said.
CMHI’s domestic ports recorded 6.4 per cent volume growth in the first four months of the year, in line with the 6.3 per cent increase in total mainland ports in the same period. Throughput in the company’s overseas ports, which contributed 9 per cent of its operating profits last year, surged 18.6 per cent in the first four months of the year.
“In general, growth in Chinese ports will slow down as the economy decelerates,” Li said. “Our growth engine will and must come from overseas.”
