Posts Tagged ‘asset investment

31
Aug
11

Singapore Keeps Building

Singapore is home to the second busiest port in the world. Where there are goods coming in and out of a port, there’s sure to be a lot of other action going on. Last week to keep up with all the activity, Jurong Port, which is the largest terminal in Singapore announced it had awarded a big contract to help keep cement coming into the country. Cement’s for building. Building means expansion.

Singapore, Marina Bay Sands

Big Building Plans

According to recent figures released by the Building and Construction Authority of Singapore (BCA), building and construction contracts in 2Q11 grew by 10.6% year-on-year. Public contracts saw a near 2.5 times leap over the same period last year, showing a renewed political will to drive up infrastructure construction.

Jurong Port has awarded a $24.86 million contract to a joint venture led by McConnell Dowell to design, supply and install a new cement handling system.More than 90 per cent of the cement requirement of Singapore’s construction industry is imported through Jurong Port, so upgrading to increase efficiency only makes sense.

Singapore’s Importance

As far back as the 13th century, Singapore has been an important trade destination for Asia. What started out as a simple location to trade ceramics and spices to the surrounding area has blossomed into the worlds largest port.

Since Singapore has very little land to call its own and zero natural resources, their economic model is based on importing raw materials and the refining them (oil and wafer fabrication) or manufacturing products with them. The electronics and biomedical manufaturing sectors account for over 50% of Singapore’s manufacturing industry.

That economic model, which some have deemed the, Singapore model, serves them just fine. Singapore’s open trade economy and important position as a port serving shipping lines from Asia to the America’s has helped the economy grow at average rate of  over 8% since 1965.

Since the Singapore economy is so heavily dependent on exports and foreign trade, economic downturns in other countries severely effect the Singapore’s growth.  For example, after the dot-com crash and the subsequent recession that followed, GDP growth was -2% for the year of 2001 and just barely positive the next two. In 2004 , as things got better, the country swung around to a 8.5% increase n GDP. As things began picking up steam even more last year the country grew by over 17%.

Tourism and Service Industries

Since Singapore has billed itself as an Asian technology and financial power house, they also attract a lot of foreign money due to low taxes and a favorable business environment. The opening of 2 casinos in 2010 has already made Singapore the world’s second largest gambling destination behind Las Vegas.

Aaron Fischer of CLSA, expects the combined gaming revenues of both Singapore resorts to generate $5.1 billion in 2011, up from his previous estimate of $3.9 billion. Goldman Sachs also expects the sector could bring in $5 billion in 2011.

Pacific Tycoon is a leading container management company in Asia. Contact us and let us show you how you can make money from owning shipping containers.

Image: Archithings

Source: HellenicShipping, StockMarketReviews, StraitsTimes, BusinessInsider, USStateDept

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

26
Aug
11

European Forecast Gets Worse

Sometimes, it feels like when it rains, it pours. If you’re an investor, or even a citizen of Europe, you’re probably feeling like this now. Financial markets in Europe are getting rocked. Not only are they dealing with a possibly crippling debt situation, they’re also feeling the pain from the uncertainty from their neighbors across the Atlantic that are closely approaching a dreaded double dip recession. Europe and America are tied pretty tight and both of them seem to be stuck in a shaking room getting bounced from one side to the next. The earthquake on America’s east coast Tuesday could be a foretelling event of more disaster to come.

Campfire

Asia Demand is Another Problem

In a report from Russia’s Port News, LNG (Liquid Natural Gas) is in high demand in Asia as more and more countries expand. LNG from Europe is being shipped to Asia where it is bringing in higher prices. Most notably South Korea and Japan are two of the biggest consumers. South Korea just inked a $84 billion deal and Japan is a heavy importer as well, especially after the disaster that caused the meltdown of its plant earlier this year.

“Asian demand could easily take virtually all the LNG in the market, leaving little over for liquid markets like the UK and the Netherlands,” said independent LNG analyst Andy Flower.

South Korea and Japan are the two largest importers but increased demand in China and other smaller Asian nations willing to pay oil-linked prices is set to tighten the market as production struggles to keep up with supply.

Higher Prices for Europeans

“This looks to be a scenario where northwest Europe could find itself short of LNG, which will force prices up to attract what LNG is available and/or bring in more pipeline gas from Russia,” Flower said.

Japan’s LNG imports hit a record high above 7 million tonnes in July, up from 5.9 million in July 2010, according to Waterborne energy analysts, which monitors global LNG flows.

For all Asian importers, Nigerian supply to Asia jumped by more than 10 times to 819,000 in July this year from 73,000 in July 2010, according to Waterborne.

Less LNG could help push prices higher next winter in big, heavily traded markets such as the UK, analysts say, adding that their prices have the potential to reach parity with oil-indexed pipeline gas coming from Russia and Norway.

Troubles are Apparent

Investors vote with their dollars and therefore the most telling signs of optimism or pessimism are reflected in the stock markets. Investors in Europe are voicing their fears. The FTSE 100 (UK’s benchmark) is down 13.44%, the DAX (Germany’s benchmark) is down 18.72%, and the CAC 40 (the French benchmark) is down 19.52% for the year. Investors are scared and when the winter comes, it looks like they’ll be shelling out more money to keep warm, too.

Asia is the train that is roaring through the world right now and pulling the developing nations along with it. It’s a tough task, but consumer demand and building are driving imports and keeping the rest of the world just above water. Contact Pacific Tycoon to see how you can get involved in this phenomenon.

Image: AllPosters

Source: PortNews

24
Aug
11

New Zealand Growth Fueled by Asian Demand

The growth in Asia is a hot topic. It has been for years now. It’s evident everywhere, especially when you travel. More and more Asians are becoming affluent and buying designer clothes, expensive cars, and traveling to other countries. The amount of money being poured into these economies is staggering, from the investments in ports and infrastructure to the foreign businesses that are moving in and taking advantage of lower cost labor or chain stores and international brands that are coming in to grab a piece of the consumer action.

Tauranga, NZ

I read this past weekend a report of the New Zealand port of Tauranga. The first report that caught my eye was “Tauranga port sees record profit from cargo growth “. The port announced profits of 17% on the year ending June 30th. 

What’s driving the growth?

Trade volumes were up 12 per cent to 15.4 million tonnes, while container traffic increased 15 per cent to 590,506 20ft equivalent units (TEU).

Exports of logs were up 14.5 per cent to 4.4 million tonnes, kiwifruit was up 3.8 per cent to 757,000 tonnes and dairy was up 4.6 per cent to 588,000 tonnes.

“This trade included 78 per cent more international volume and more than three times the export volume of Port of Tauranga’s nearest competitor.” said John Parker, Chairman of the port. He also added”Despite the patchy economic recovery, we have enjoyed strong growth in trade volumes.”

Chief executive Mark Cairns said he was proud of the result. “I think it was a cracker year across all parts of the business and positive about the coming year, in particular around the container terminal side of the business.”

What does this have to do with Asia?

At the bottom of each of the articles I read was a small piece about the influence that Asian economies are having on the export business of New Zealand and neighboring exporters. And then there is this Bloomberg article, which reports that Chinese imports of New Zealand milk has jumped 500% since 2008.

Asian consumers are demanding more protein as incomes and nutrition levels rise, said Con Williams, rural economist at ANZ National Bank Ltd.

Other countries that recorded the largest growth in imports include India and Sudan. India’s imports of New Zealand dairy products more than doubled to NZ$162 million last year, according to government data. The value of Sudan imports jumped to NZ$114 million from NZ$39 million in 2008.

20 years ago the average westerner walking down the street towered over his Asian counter-parts. That has changed drastically in the last 20 years. One of the first beneficiaries of that change was Taiwan. Factories in Taiwan sprung up quickly 20 years ago and many have left the island in search of cheaper labor in China, but the effects are long-lasting.

20 years ago, what some people refer to as a healthy child with a little “baby fat” was an anomaly there. Those days are gone. Friends of mine are teachers in Taiwan and in a visit there last year, I witnessed the explosion first hand. A visit to a high school there showed me this unexpected surprise. Many of the kids there towered over me.

Higher standards of living

In his report in April of this year on the International Monetary Funds Economic Forum, economist Anoop Singh, Director of the IMF’s Asia and Pacific Department said, “Economic growth averaged 8.3 percent across the region in 2010, on the back of both strong exports and domestic demand. Asian exports, especially of high-tech products, have benefitted from higher global investment, and domestic consumption and investment from rising employment, abundant credit, and supportive macroeconomic policies.”

In regards to future growth, Mr. Singh had this to add, “Growth is likely to remain robust, averaging 7 percent in both 2011 and 2012 (compared to 4.5 percent global growth). China and India will remain in the lead, and their growth will increasingly benefit other economies in the region.”

At Pacific Tycoon, we’re located in the heart of Asia, serving the our clients and giving them a managed solution to their investable income. By owning containers and leasing them out to the companies that supply this region with the goods they are demanding. With the turbulence in the financial markets, many investors are looking for safer, more predictable ways to make money. Contact Pacific Tycoon and we’ll show you how you can begin earning 12% on your money.

Image: GoogleMaps

Source: NZHerald, CargoNewsAsia, SunLive, Bloomberg

23
Aug
11

Jordan Boasts a Robust Port

It seems like this is Middle East week on the P.T. Blog. Yesterday we reported on the boom in business going on in Oman. Today we shift our focus north-west, up the Red Sea to a corner of the Middle East, also called Levant ( which comprises Syria, Lebanon, Jordan, Israel, and the Palestinian territories). That’s a lot of ground to cover, but one port’s location puts it in prime real estate to just that and more.

Jordan Flag

Jordan’s Solid Port

Aqaba Port is becoming the docking place of choice for all shipping lines wishing to move cargo not just through Jordan but through the whole of the Levant and Iraq. With the rebuilding of Iraq under way, that’s no small task and the Port of Aqaba is sparing no expense making sure they get it right from the beginning.

The port was founded back in 2004 as part of a management contract between Aqaba Development Corporation (ADC) and APM Terminals Jordan. The concession agreement took place in September 2006 when a further 25-year joint development agreement was signed. Under the agreement, APM Terminals manages, operates and markets ACT and is responsible for the execution of the company’s ‘masterplan’. Over the past five years, the terminal has become a main liner facility, operating to international standards and playing a crucial role in the Jordanian economy.

Growth is Coming Fast

Back in 2006 the port’s gantry crane (cranes used to load shipping containers on ships) was a paltry 7 or 8 moves er crane/hour. That rate has jumped to 30 moves/crane/hour this year. Because if it’s location growth is coming fast.  Jordan and Aqaba specifically is located in a perfect spot to receive containers from most parts of the world that are destined for Jordan and the wider Middle East.

It is connected on weekly services from Africa, Europe, the Far East and the Indian subcontinent with a number of the world’s top shipping lines. Situated at the crossroads of 3 continents and 4 countries, Aqaba enjoys an attractive location in the heart of the Levant and caters to more than fifteen of the world’s top shipping lines.

Adding to the benefits is the fact that the water around the port is deep and therefore dredging is not a concern that other ports have the added expense of tackling.

A productive and profitable port take more than a blessed real estate and that’s another area that the Jordanian port shines in. Communications manager Ihab Alrawashdeh reiterates the other strengths. “We have excellent land transport connections for the rest of Jordan and into the Levant and Iraq, particularly in terms of road infrastructure,” in addition, Alrawashdeh said, “We are also directly connected to the rest of the logistics support areas such as the airport, so it is easy to deliver sea freight there, or bring air freight here. This is coupled with our international standards of operations and productivity.”

More Expansion

As of this year Phase 1 of the Port Project is completed and the next phase which will almost double the capacity of its berths to 1000 meters.

Aside from the investments in physical space, machinery, and services they are also pumping money into the most high-tech equipment. Productivity is key and to realize the master plan of being the leader in the region even small gains can put them ahead of the competition.

“When it comes to new technology, at the end of the day we are a port and there are only so many places where we can be cutting-edge. However, when those opportunities arise, we seize them. Our most recent investment has been in six new RTGs which are not only as advanced as possible in terms of technical capabilities, but they are also ‘eco-cranes’. This means that they emit much less CO2 than standard RTGs, but they still have very high productivity levels.” added Alrawashdeh.

At the End of the Day

Iraq is rebuilding after a long war and the Middle East is growing at a healthy rate. The Port of Aqaba is just the beginning of a long expansion of the potential in this region and the people who manage the port see this.  “Our final aim is for ACT to be a key transit hub for the Levant, especially Iraq,” he says. “This means that we are looking to double our total throughput and plans are already in place to achieve that. With our master plan and commercial strategy, I believe that this is something we will achieve within the next five years.”

Image: VirtualTourist

Source: ACT, BusinessExcellence, AqabaZone

22
Aug
11

Investment is Paying off in Oman

Just a few short years ago, the Port of Sohar was an ambitious project that was fighting a lot of competition in the Middle Eastern shipping business. After huge growth year after year, it’s starting to turn more heads than a cat walking model.

Oman

Official Directive

In line with the royal directives of His Majesty the Sultan, Port Sultan Qaboos will be converted from a commercial port to a full-fledged tourist port. During the implementation of this project, the Port of Sohar is proposed to receive additional container throughput of 350,000 TEUs, according to Sohar Industrial Port Company – the landlord-operator of the industrial port, reported the Times of Oman.

Facts and figures

In 2007 the port handled just 6,290 twenty-foot equivalent units. This year they are projected to handle of 100,000. With the addition of the traffic that will be rerouted from the Port Sultan Qaboos, that number is expected to jump to over 500,000 in the next year and a half.

The Port of Sohar is a 50:50 joint venture between the Government of Oman and the Port of Rotterdam and located 220km northwest of the capital Muscat. The industrial port is a deep-sea port and has grown tremendously in size and importance in only seven years since its start in 2004.

First Class

Like most things done, in the middle east, they’re done high-class and tech proficient. The Port of Sohar is no different. The ports development was initiated back in 1999 as part of the Oman Vision 2020. Because of the attractive position in respect to the Arabian Sea and the Indian Ocean, the initiative is seen as a primary attribute to spreading trade throughout both the country and boosting its clout with neighboring ports and countries.

On Thursday of last week it was reported in the Oman Daily Observer that the Sohar Industrial Port Company (SIPC), signed a deal for the establishment of “Port City”. The new $15.5 million project will be located in front of the port secured area, the complex will provide members of the user community, notably shipping agencies, freight forwarders, and other port and maritime service providers with a suitable and fully equipped base from which to conduct their business within Gateway Sohar.

“Any port attracts many different users and third parties, such as shipping agents, freight forwarders, and so on, as well as government agencies that handle customs, health, quarantine services, and so on. We believe a complex like this is a key requirement within the port area to serve these various users. It will be a hugely successful venture because it provides a comprehensive range of services and amenities, including shopping, fuel, and other services. This combination of services is a good factor in attracting parties, who are currently scattered or not present in Sohar, to take up space in this complex. We’d like to encourage specifically shipping and cargo handling agents, among others, to have their offices at Port City.” said Jamal T Aziz, CEO of Freezone Sohar.

Construction work on the project is expected to commence by December 1, 2011, with Phase 1 due to be commissioned by 2012-end. Phases 2 and 3 will be brought into operation by the end of 2014.

Phase 1 planned to be a “One Stop Service Building” which will house the front offices of relevant government departments and shipping agencies, allowing efficient document handling for the continuously increasing marine activities in Port of Sohar.

Along with the service building, phase one will also include a Superstation- a new concept filling station with a range of facilities for both trucks and drivers. It will feature a service station for trucks, coffee shop and shower facilities for drivers. This part of the project will be supervised by Oman Oil Marketing Company (omanoil).

J.O.B.S.

Subsequent phases of the project will offer space for businesses, such as banks, local retail and even a supermarket. With its high level of ambience and amenities, Port City will emerge as a landmark within the Port of Sohar, said Jamal Aziz, adding that the project is also expected to create a large number of jobs for local Omanis.

The port has obviously done some good planning. They are taking advantage of the increase in business by catering to their clients. In doing so, they’re creating jobs, making money, and keeping everyone happy and busy. An idle mind is the devils playground. It looks as though there’s no such thing at the Port of Sohar. Things there are going to be there busy for quite some time.

More jobs equal more money. More money equals more spending. More spending equals more goods and services coming in and going out of the country. Contact Pacific Tycoon. Let us show you how you can be part of this growth in Oman and the rest of Asia through container ownership.

Image:CTGroupTravel

Source: CargoNewsAsia, TimesOfOman, PortOfSohar, OmanDailyObserver, OmanInfo

18
Aug
11

China Invests Big Stake in Sri Lanka

Back in July, on the 19th, we wrote a post entitled, “Investors Queue Up in Sri Lanka”. We covered the strategic importance of the port and the value it has for the Chinese. Last week as reported in the South China Morning Post that, China Merchants Holdings International has signed an agreement to take a majority stake of 55% in the project at the Colombo South Container Terminal in Sri Lanka.

Sri Lanka

Big Money Flowing In

At an expected investment of more than US$500 million, the deal would be the single largest foreign investment by a private company in Sri Lanka, China Merchants said.

The relationship between China and Sri Lanka is an old one. At present China is their largest bi-lateral trade partner. That relationship was kicked off in 1952, when the two countries signed the Rubber-Rice pact where Sri Lanka (then Ceylon) supplied China with Rubber and China exported rice to the island, and has flourished ever since.

During the War with the Tamil Tiger that ended 3 years ago, it was the Chinese and Russians who held off the UN from issuing a cease-fire. The Chinese supplied the nation with arms and other assistance to help make this victory a reality.

Money in More Than Ports

I was able to pull up a pretty complete list of Chinese investment in Sri Lanka from a CNBC post written just 2 weeks ago that follows.

China was Sri Lanka’s largest lender in 2009 and 2010, giving $1.2 billion and $821 million respectively. In 2009, that figure accounted for 54 percent of total foreign loans, and 25 percent in 2010.

In the first six months of 2011, trade between China and Sri Lanka was worth $1.28 billion, a rise of 39.5 percent on the same period in 2010, according to Chinese customs data.

China’s imports from Sri Lanka in the first six months of 2011 were worth $68 million.

INVESTMENT

Foreign investment of $1 billion will flow into a 500-room hotel by Honk Kong-based Shangri La Asia and a shopping mall by China National Aero Technology Import and Export Corporation (CATIC) in Colombo, the largest investments so far into a post-war tourism boom.

The latter has run into an issue, with the president questioning whether the land should be sold as first agreed by his brother, Economic Development Minister Basil Rajapaksa, or given on a long-term lease, according to local media.

CONTRACTS & TRANSACTIONS

Sri Lanka has signed a $450 million deal with China Merchants Holdings and local conglomerate Aitken Spence to boost the Colombo port’s cargo-handling capacity.

Sri Lanka, with a tradition of strict foreign exchange controls, has allowed international banking transactions denominated in the Chinese yuan since June 29.

LOANS

China Development Bank Corporation has agreed to provide $1.5 billion within three years for construction of roads, bridges, power plants and water and irrigation schemes.

PORT DEVELOPMENT

China has lent $400 million for the first phase of the new port in Hambantota and its Exim Bank has lent $77 million for an oil bunkering facility, while another $810 million has been given for the second phase with China Communications Construction Company as the contractor.

ELECTRICITY DEVELOPMENT

China’s Exim Bank loaned Sri Lanka $455 million to build the first phase of first coal-powered generation station on the Indian Ocean island nation, and has offered an $891 million loan to build the second phase of 600 MW.

ROAD DEVELOPMENT

China has pledged around $760 million to the island nation’s road construction across the country, including $302 million for projects in the war-ravaged north.

A $310 million Chinese loan from its Exim Bank has been granted for the Colombo-Katunayaka express road, which will connect Sri Lanka’s only international airport and its commercial capital, Colombo. It is due for completion next year.

AIRPORT

China has also lent $190 million for Sri Lanka’s second international airport in Hambantota, which is on Sri Lanka’s southern tip and happens to be the president’s electorate.

RAILWAY

China’s Exim Bank has committed $102.5 million for Sri Lanka to buy 13 new diesel engines for its railways. The engines will come from Chinese manufacturers.

A Very Close Relationship

As the Chinese command more and more of the space that takes up the ocean via shipping lanes and requires more and more raw materials for its own expansion, the country is making wise investments overseas. Sri Lanka is an important port location and the Chinese investments in the past and support of the country puts them on top of the list when help is needed for expansion.

More and more goods are being consumed world-wide due to Asia’s growth and development. Waves of money are coming onto the shores of countries like Sri Lanka, India, China, Korea and a host of others. Money from foreign nations is pouring in both from government and the private sectors to invest in this growth. Where are you putting your money? Give Pacific Tycoon a call and find out how you can be part of this growth, through container ownership. It’s a lot easier than you may think.

Image: LonelyPlanet

Source: CargoNewsAsia, CNBC, IAS100




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