WELLINGTON: Diversifying business streams was paying dividends while plans for an inland port facility in Invercargill were also advancing, South Port shareholders were told on Thursday.
Chairman Rex Chapman told shareholders attending the annual meeting in Bluff on Thursday that the 2015 result was “particularly pleasing because this time last year we did not predict such a good result, given the growing competitive pressure in container activity and falling commodity prices.”
South Port in August reported another record cargo throughput at Bluff of 2.68 million tonnes, a 5 per cent increase on 2014, which resulted in a record net profit after tax of $7.7 million, up 15 per cent on 2014.
The Bluff-based port company has diversified across container and bulk cargoes transfers, warehousing, cold storage, property and infrastructure leasing and this has been rewarded.
Stronger-than-expected volumes of imported bulk cargos, notably of stock food and fertiliser, contributed to the record performance, Chapman said.
“We were pleasantly surprised that these particular cargos held up so well in such a difficult period for the dairy sector.”
South Port’s strategy was to maintain good working relationships with all of the New Zealand ports in order to take advantage of “inevitable changes” in the port sector, he said.
“Just as Tauranga has now reached into the South Island through Timaru, it is expected that other ports will be seeking to enter into working relationships with one another in order to capture regional cargo outside of their immediate catchment area.”
New supply chain agreements such as that between Kotahi and Port of Tauranga have triggered “intense competition between shipping companies for the remaining cargo and shipping rates are at unsustainably low levels,” said Mr Chapman.
He confirmed that South Port is advancing plans for an inland facility.
“The facility, to be known as the Invercargill Freight Centre, might be ‘modest by comparison’ to similar developments in other provinces; however, it is an important development being provided in response to changes in the supply chain landscape”, and could lead to further commercial opportunities,” Chapman said.
As well as providing a cost competitive and efficient import-export service for the southern region, the centre would further diversify South Port’s earnings. Construction is to start this summer, on a 0.80ha site in Mersey St, Invercargill, adjacent to the KiwiRail rail-head, with the target of a July 2016 completion date.
South Port’s container shipping customer MSC faced competitive pressure to retain and attract cargo out of Bluff and the port operator was working closely with the shipping line to support continuation of its call at Bluff, Chapman said.
