Archive for the 'Investment' Category

30
Aug
11

All Eyes (including APM) on Asia

After the global crisis in 2008, many companies tightened the wallets and held back on investing in anything or anywhere. Despite the pull back, that resulted in a year where the Dow Jones Industrial Average lost 37%, shipping lines were still running and people still required the goods and services that they consume to go about their daily lives. In that year Pacific Tycoon made 23% for our container clients. Container companies are profiting handsomely from the boom in Asia.

Made in China

Good Results

The company announced last week that their profits for the first 6 months increased 6% over the same period last year. With forward thinking and confidence in emerging markets, APM has increased its holding’s in Asia and that has paid-off for them handsomely.

Specifically, in Asia, in the first half of the year new operations commenced at the recently completed 1.1 million TEU annual capacity deep-water Cai Mep International Terminal in Vietnam. APM also began operations in Liberia and the Republic of Georgia.

APM Terminals CEO Kim Fejfer, said “We achieved very good results for the first half fiscal year and our key business metrics continue to trend positively. I am delighted to see our client portfolio expanding, our new business activities performing well, opening new markets in line with our growth strategy. Our investment in new terminals continues to drive APM Terminals strong market leading position.”

More Investment Coming

“We are actively looking for investment opportunities in emerging Asian markets such as China, Vietnam, India and Indonesia,” said chief operating officer Martin Christiansen.

Expanding intra-Asia trade volume has been largely fuelled by China’s increasing appetite for imports and closer ties with the Association of Southeast Asian Nations (ASEAN), he said.

The Netherlands-based company owns stakes in 10 container terminals in China, which have not received further investment since 2009 because of the 2008 global financial recession.

The company sold its shares in the ports of Kaohsiung, Taiwan, in 2009 and Yantian, Guangdong province, in 2010 on the Shenzhen Stock Exchange to China Ocean Shipping (Group) Co (Cosco). APM Terminals plans to sell half of its 50 percent stake in Xiamen port to Xiamen International Port.

While stressing the Chinese market remains a priority, Christiansen admitted that there are some potential investment challenges in China, such as the rising costs of labour and property. But the valuation of ports is yet to offset rising costs, with nearly no increase in tariffs in recent years.

Most importantly, “the growth rate of China’s container volume in the future is expected to be lower than the past, particularly China’s export volume to mature markets such as the United States and the Europe”, Christiansen said.

The dwindling growth rate is partly attributable to rising costs and yuan appreciation, which are posing a threat to China’s reputation as the global manufacturing base. The country’s coastal cities, which support a variety of labour-intensive manufacturing sectors, have been particularly hard hit.

Some investors have shifted investments into neighbouring countries where the cost of labour is lower. In 2010, Vietnam replaced China as the largest production base for Nike Inc, prompting widespread concerns that China might lose its attractiveness as a global manufacturer.

Growth in Other Countries

The investment in the Cai Mep International Terminal in Vietnam, looks to be a good one. Last year GDP for the entire country of Vietnam was 6.7%, whereas in the Mekong River Delta that number was almost double at 12.2%. The region exported 6.8 million tonnes of rice in 2010, the highest volume so far. Ho Chi Minh is the business center of the country and growth from both foreign and local investment is increasing.

China is Difficult to Replace

“China’s vast manufacturing industry is difficult to replace. We do not see a big risk of a massive sourcing shift out of China in the near future,” Christiansen said. “China will remain one of the most important markets for us.”

For APM and Asia and the expanding countries in Africa, as well, China is an important piece of the puzzle. China is aware that wages and standards of living inside the country are climbing higher and higher. All of this puts pressure on the country to remain at a competitive advantage in terms of pricing for companies needing manufacturing solutions.

This is another reason the country is eagerly awaiting 2014, when the new set of Panama Canal locks are set to open. The larger Post-Panamax ships of today which carry twice (almost 3 times) the cargo and cut annual operating expenses in half are a much needed boost to China’s shipping industry.

Image: VNBrand

Source: CargoNewsAsia, VietnamBusiness, CargoNewsAsia2

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20
Jul
11

Singapore Port Takes Show on the Road

Outside of Shipping, when you mention Singapore the first thing that comes to many people’s minds is a fruity drink or a tiny country on the tip of Malaysia, but rest assured there is nothing small about the way they do business. Singapore also sits at number 3 on the wealthiest nations per capita list and they know how to make money.

Singapore SlingSingapore Ports are Top Dog

The ports themselves are the busiest in the world, behind Shaghai’s and that exactly why they’re taking their show on  the road. The Jurong Port, one of the 7 ports in Singapore, is moving ahead with its first overseas management project. They are setting up a joint business venture to manage and operate 7 berths at the Rizhao port in Northeastern China.

The Rizhou port is in Shangdong 500 kilometers north of Shanghai. Rizhao Port, which is owned by the Rizhao Port Group, is a leading port for coal, ore, grain, wood chips, cement and liquefied petroleum products. In 2010, the port’s 44 berths handled a total of 220 million tons of cargo and, thus, was ranked the ninth top coastal port in China for bulk cargo by volume.

This marks the first time the operators of he Jurong Port have shared their management expertise with a foreign port. The Chinese have nothing to lose and everything to gain from this project. The Jurong Port, at the same time, can use this project as a stepping stone to showcase its skills to other foreign investors who are looking to beef up the clout of their port operations.

The Singapore port is ready to get to work. “Our goal is to work with our joint venture partner to make Rizhao Jurong Port Terminals a shining success story,” Jurong Port chief executive officer Matthew Chan said. “The joint venture is the first step in Jurong Port’s quest to become an international multi-purpose port investor and operator.”

End Result

As Chinese ports get busier and busier, it’s important that the foundation is set and sturdy. It only makes sense that the Chinese partner with the best.

My father once told me that if you want to be the best, you need to play with the best. He discouraged me from playing with others that weren’t as good, as their was no way they would push me to excel or teach me new things. My father must have spent some time in China.

From all the reports that are coming out it’s hard not to get interested in participating in the growth happening  bother in Asia and Africa. At Pacific Tycoon we manage assets (containers) that you own, lease them out, and pay you quarterly or even monthly. There’s big business over here, and we’d like to show you how you can participate. Jump on board today with Pacific Tycoon.

Image: ReadyMade

Source: CargoNewsAsia

11
Jul
11

Trade focus on US and EU

The United States commands such a large chunk of the media’s attention. This is benefial for those who are able to not focus on the doom and gloom reports that monopolize airtime, radio waves, and text and instead zero in on where other opportunities lies. It gives them a head start.

Race car drivers know all to well, that when they are headed for a crash, the last place their focus should be is the wall ahead of them. If there’s a possibility of to pulling out of a meeting with the wall, any chance of doing so gets ruined in a split second if that is where they are looking.

F1Focus= Opportunity

The same applies with your investment money. If you focus on the bad then you’ll always be looking the wrong way down a loaded barrel of despair and bad decisions. Unless you’re playing on the bad news, which is true in short selling and certain options contracts, there’s no use in dwelling on the bad.

Although, there is a slowdown in America and the developing nations: Greece is dragging the rest of the EU down in its debacle and the Spanish are fighting unemployment rates that would make a bond investor claim there is a God if he/she saw similar numbers, this doesn’t mean there aren’t other options.

That is where Pacific Tycoon can serve to help balance returns and eliminate risks with a portion of your investable capital. Owning shipping containers gives you highly liquid hard assets that are not only a barometer for global economic growth and expansion, but also the only hard asset you own that can be transported to where it is needed most, all the while carrying other assets that pay you a steady stream of income.

News Flash

The American economy is not good. Unemployment is hovering above 9%. Demand is weak and not only are things slow in North America, Europe is suffering as well.

Chinese Ports are projecting that the increase of 15% last year from ports will be closer to 8-10% this year. American Consumerism has an impact on global trade. A big impact, but focusing on that too long gets you thinking the entire picture is cloudy and the end of days is close at hand.

If you’ve spent any time in Asia, you are well aware that slow and steady decline of America’s dominance as the biggest super power has been forecast and whispered about quite often over the last decade. Greed, gluttony, and over-spending have clouded the way, while the rest of the world has worked, sweat and bled the desire to topple the great Western Empire.

That should not, in any way shape or form, be news to anyone. I apologize if you’re offended at the dash of sarcasm thrown in with the title of this section, but the truth hurts.

China, Africa, India

….and those are just the big guys that everyone else is talking about. What if we narrowed the field even further and started talking about Ghana, Qatar, Turkmenistan, China, Liberia? What if we threw in a few numbers of say 20.146%,  14.337%, 12.178%, 9.908%, and 9.003%, which just so happen to represent the GDP growth for these fastest growing economies in the world.

Now you’re looking at a list of very prosperous nations that are building their base and expanding at a blistering pace. How do you think they get the materials they need to accomplish this growth. Some is organic. Much is imported. This is where Pacific Tycoon comes in. By managing containers that you purchase, we are able to allocate your “space” to the highest bidders and secure you a monthly or quarterly income based on the amount of container you lease to us.

Get your head out of the ground. The world is not coming to an end, but there is a major economic shift that is affecting global trade. You’ll either be stuck to the news worrying with the rest or you’ll be looking to where the opportunity lies. Contact us today to get involved in the commerce that is transforming the boundaries of power.

Sources: EconomyWatch, CargoNewsAsia

Image: SportCarBuzz

08
Jul
11

East Coast to West Coast African port investment is increasing

Last week we wrote a detailed post about the development of new ports in Nigeria and a boost to the current infrastructure of current ports. The West Coast is not the only side of the continent that is seeing growth. Investment dollars are being spent all over Africa and it seems that the East Side, especially, Mozambique is the newest beneficiary. Look no further than the world news cargo report that came out this week.

mozambique beach

Not all fun in the Sun

Although this is what many may picture when they think of Mozambique, the country has much more going for it than just a beautiful tourist destination.

“We think that it is a good time to invest because the demand is there and what we need to do is to create a gateway, developing the infrastructure to take our goods to the market,” MPDC CEO Dave Rennie said. He also added that India and China were markets that need to be serviced.

His quote was in response to the latest news that the Mozambique Port Development Co. will be spending, US $1 billion over the next 20 years. Money will be spent on infrastructure at the country’s main port.  The MPDC was formed in 2003, has received backing from Dubai based DP world, operates and governs the ports of Maputo and Matalo located together outside of the capital city of Maputo.

More than One Lion in the Jungle

Good news for all of Mozambique. Although, the Maputo/Matalo ports are considered the main ports there are two other strong ports in the country. The port of Beira and the port of Nacala are both heavy hitters as well.

The Nacala port is the deepest and as recent as last year the Mozambique government pledged US$500million on coal freight which will open up infrastructure to more of the country by adding a new railway to transport the coal from Malawi.

The port of Beira is as sexy as it is historic and busy. The old colonial town was a stand-off location between the Portuguese and the British. This activity and rush to create a port and town occurred during the scramble between the Portuguese and British over the occupation of land in eastern southern Africa, with the British (in the form of Cecil John Rhodes’ Chartered Company), having a strong interest in securing a sea link for the newly chartered lands of Rhodesia.

Investment in Infrastructure Paves the Way

Along with the rest of Africa, which is developing at an astronomical rate due to  a recent influx of communication investment being spent in the country, Mozambique’s continued development of its ports will open up stronger ties with China, India and the rest of the world thus increasing the goods and services being ushered into the continent. Africa continues on a path toward global recognition as a hotbed of economic activity and those who embrace its rise will profit.

Sources- World Cargo News, Wikipedia, Ports and Ships

Image courtesy of OurSurprisingWorld

30
Jun
11

Busy Ports Equal Investment in Lagos, Nigeria

Starting a week ago yesterday and running for another 2 and a half weeks the port of Lagos, Nigeria is getting slam packed with business. The Nigerian Ports Authority (NPA) Reported that for the period beginning on June 22 and running until July 15th a total of 79 ships would be making their way to the docks of Lagos.

Busy Lagos, Nigeria

Investment Opportunities

We see commerce spreading all over the place in the above photo as well as in the overview of the NPA report. Starting last week we see material goods, food, oil, building supplies and vehicles being loaded off the container ships that are coming in the distribute their cargo. The report also indicated that 33 tankers carrying petrol, aviation fuel, Kerosene, ethanol, diesel and base oil were already waiting to discharge their products.

After digging a little deeper, we also found that the Nigerian government is planning to establish two deep sea ports, in partnership with private investors, that will be located in Lekki, Lagos State and  Ibaka, Akwa Ibom State .

“To actualise the plan for the new ports, the NPA has entered into an agreement with a Singaporean company to build a multipurpose deep seaport in Lekki, while discussions are ongoing with the Akwa Ibom Stategovernment to build a deep-sea port in Ibaka.

Under the Greenfield ports development, the NPA in partnership with the private sector would, within the next few years, replace ageing facilities of the Nigerian ports, strategically position the seaports for effective and efficient performance, improve on the vessel turn around time for ships berthing in Nigerian ports and integrate the existing ports into an efficient system for the country and the West African sub-region.” Newswatchergr.com

Shipping is not the only boom in town

Nigeria is the largest mobile  market on the African continent, beating out South Africa a year ago. As of the latest figures we could find Nigeria has over 75 million mobile phone users with a penetration rate of 53%. From 2003 the 2008, mobile usage in Africa increase 550% and it’s still soaring a trend that has changed commerce, social lives, and general living conditions all over the planet.

Estimated market penetration rates in Nigeria’s telecoms sector – end 2010

Market Penetration rate
Mobile 53%
Internet 24%

(Source: BuddeComm based on various sources)

In comparison, other African nations like South Africa, Gabon and the Seychelles have near 100% penetration.

Popular mobile services include money transfers, allowing people without bank accounts to send money by text message. Many farmers use mobiles to trade and check market prices. This means that more business can be conducted, more trade effected, and more goods and services exchanging hands.

And this is why we see the boost in port business in Nigeria and the expansion and upgrade of their current locations.

“The World Bank projects the country’s average GDP annual growth at 7.4 percent for 2009 to 2013; the IMF at 6.9 percent for 2011. In a May 30, 2011, New York Times column, distinguished economist Jeffrey Sachs wrote that Nigeria could plausibly aspire to join the BRICS (an informal block of large developing economies, consisting of Brazil, Russia, India, China, and South Africa) by the end of the decade.”  Nigeria Village Square

Tech is slow but growing

..and with it come big ideas, big results, and business opportunities that did not exist before hand. There’s a really good article that was posted on the TechCrunch blog in May about the Start-up scene in Nigeria. It’s a very interesting read if you have a few minutes.

The post doesn’t just focus on tech start-ups either, there are business incubator programs sprouting up in the country with mentors from industries like medicine, education and yes, technology chipping in to train and develop the next generation of entrepreneurs.

Technology changes things, but the blood, sweat and tears that gets the tech moving comes from entrepreneurs that are passionate about their dreams and ideas. This spells a movement of people who are working to make the life there better.

Image courtesy of ICOC News

29
Jun
11

Saudi Arabia to Increase Investment in Ports

Jeddah, the largest port on the Red Sea is about to receive some healthy competition from its little brother, Dammam, in the Gulf of Oman on the east side of the country. Saudi Arabia announced on the 23rd of June that it would be spending up to $613USD (2.3billion Riyals) on all the ports in the nation with capacity in Dammam being raised.
Dammam

Serious Expansion

The Saudi transport minister Jabara Al-Seraisry is quoted thus on arabnews.com. “All ports are subject now to expansion. We are investing now SR2.3B (US$613M ) for projects in all the ports and we always continue increasing, particularly the industrial ports in Yanbu and Jubail. The next budget will be coming in five or six months and we will see more projects.”

Saudi Arabia now has 9 ports with over 200 docks. The largest port in the country, Jeddah, is also the biggest on the Red Sea. After the Red Sea Gateway terminal in 2009,  Jeddah now boasts a capacity of 5 million TEU (twenty foot equivalent unit).

Thanks to the new port expansions, commerce and trade will open up even more across the country with Dammam on the east experiencing a lift in capacity. Currently Dammam is at 1.5 million TEU and that is expected to double to 3 million with the new expansion plans.

Saudi Arabia is trying to diversify its way away from an oil only economy and these expansions will definitely help move it in that direction. Despite the global economic slowdown JIP’s (Jeddah Islamic Port) will see a five percent increase this year.

There’s More Coming

Aside from the investments into the ports, Saudi Arabia is undergoing a massive $400 billion USD infrastructure overhaul and are also dishing out $130 billion USD on social and various other projects. That’s over a trillion USD being spent in the country over the next five years on expansion. They are serious about getting things done.

“The intention is for the government to provide the land and the private sector to construct the project,” said Al-Seraisry. This spells a massive boom in residential construction, jobs and a shift of people and money closer to these ports where the jobs and money will be coming.

Where will your investment money be made. Contact Pacific Tycoon and let us set you on the path to take advantage of the expansion in Saudi Arabia and the rest of the world through container ownership.

27
Jun
11

Owning Shipping Containers vs. Real Estate

The slide of the real estate market in that started in 2008 was perpetuated by greedy executives and financial gurus in the highest echelons of society. In America, the dream, the so-called “American Dream” that has proved to be more and more elusive to so many middle and lower class citizens was sold to these individuals on a silver platter in the form of home ownership. People that couldn’t be approved before were packaged together with other risky borrowers, insured and then sold off in new “break through” financial instruments that eventually went bad. We all know the rest.

American Dream

Historic Returns of the Real Estate Market

From 2001 to 2006 real estate appreciated 12.4% but we’ve already dispelled with the reasons for this so let’s return our feet to the ground and talk about what life is like on Earth, where the rest of us are looking to make prudent financial and investment decisions. From 1978 to 2004 residential returns were still good but far lower than the inflated number brought about by the bubble in the US housing bubble, coming in at 8.6%. The highest sector of the real estate market during this time, was in the commercial sector, registering gains of 9.5%.

CNN Money published a good post a few years back that compared the advantages of stock ownership versus real estate. They compare performance, leverage, costs, taxes, transparency, effort, volatility, and diversification. In the end real estate’s biggest benefit is leverage. And while we’re not trying to beat a dead horse, it’s clearly evident when this is misused real estate can sink you faster than any other investment.

Stocks come out as the winner vs. real estate.  Take a look at our post on container ownership vs. the stock market to see more on why you’re better off owning containers than stocks.

Container Ownership vs. Real Estate

From April 2007 to October 2008 residential real estate prices declined 8.8%. During that same period that the housing market was getting hit, owners of shipping containers managed by Pacific Tycoon earned of 25% in the aggressive portfolio, and 12% in the guaranteed portfolio.

Since inception, the Aggressive portfolio has averaged 29.97%, which is far above the 12.4% that housing prices averaged during even the biggest of real estate bubbles. Safe and sound with hard liquid assets or risky and speculative playing the “when will the bubble burst”. The smart money says you’re better off going with a proven model that distributes in demand consumer products to the busiest ports in the world calling for them.




Gain unearned income. Own shipping containers and lease them to us. We contract with companies who need to ship materials.

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