Posts Tagged ‘Investment

01
Sep
11

Shipping Industry Rebound

There’s a lot of good news if you’re looking to make containers a part of your investment portfolio. Demand is Asia, most notably India, China, Singapore, are all rising. Development of these countries and those around them, is at record levels. In two separate reports we found this week, consumption in Asia is the main driving force behind the push from poverty to the acquisition of wealth and material goods that just a few years ago was a far stretch for many of the citizens of Asia. It’s amazing how fast things change in the world we live in today. Countries are pivoting quickly with the help of advanced technology, communications, and increased levels of education.

Containers

Industry in China is Growing

China Merchants Holdings, a diversified conglomerate with big investments in shipping and ports reported first half results earlier this week that were double the same period last year, thanks to a revaluation gain on its investment in Shanghai International Port Group and the appreciation of its office building in Sheung Wan, reported the South China morning Post.

The company also reiterated what we talked about last month about the moving of industry inland in search of cheaper labor. On the mainland, ports at Shenzhen West reported a 0.6 per cent fall in first-half container throughput due to a slowdown in exports in the Pearl River Delta, compared with 12.9 per cent growth on average in mainland ports.

“The slowdown in growth in Shenzhen is a long-term problem as the trend for factories to move out is irreversible, but Shenzhen still has a geographical advantage,” said Vice Chairman Li Jianhong.

Due to the influx of business moving inland, handling fees at Shenzhen port were frozen in the first half, compared with a five to eight per cent rise in handling fees in the Yangtze River Delta and an up-to-15 per cent rise in the Bohai Rim (also known as the Bohai Economic Rim or BER, which is the economic hinterland around Beijing and Tianjin).

This migration of business is rapidly developing the country and bringing new jobs to an unprecedented number of people in rural areas, who just a few years ago were moving to the coastal areas in search of work.

Growth is Driving India to Prosperity

In India the shipping industry is rosy, too.

The Indian shipping industry recorded an increase of over 20 per cent in business in the last financial year and in the first quarter of this year, which is expected to continue, said Shreyas Shipping Chief Financial Officer Vinay Kshirsagar.

Almost 90 percent of India’s trade by volume (70 per cent in terms of value)  is conducted by sea. With the largest merchant shipping fleet in the developing world, India’s maritime sector is set to grow to a size of $80 billion by 2020. The expected volume handled in 2020 would be approximately 1.7 billion tonnes.

While demand drivers like trade growth and geographical balance of trade (which determines the length of haul required) are very positive, the supply drivers like new ship building orders, scrapping of existing tonnage, etc, also indicate a good future for the Indian shipping and logistics sector. This is further given a boost by the privatization of ports and the strong thrust on infrastructure, said Nicky Mason, managing director, Informa India.

India is the world’s second most populous country and their consumption is rising along with their incomes. India is investing big money in its ports to calm inflation and keep the demand that is driving it up at bay. With big money being spent on ports and infrastructure, India will continue to be one of the biggest players in the region.

Growth in Asia is good for Container Owners

Owning containers is easy. Managing them is a different story. That’s what Pacific Tycoon does best. We are located in Hong Kong, in the heart of Asia, with the skill, experience, and knowledge to put your containers to work and start earning you a good income. It all boils down to the most simple of economic laws: supply and demand.

If there is sizeable demand for a product or service you can charge more. Demand in Asia is sky-rocketing and our containers owners are getting paid very well, to let us manage their investment. Contact us and let us show you how you can diversify your investments by owning containers and lease them to the very companies that supply the region with the necessary goods to do business.

Image: TopDealFinder

Source: HellenicShipping, CargoNewsAsia

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

29
Aug
11

DP World Shows How to Manage

Dubai based DP World is in a class to itself. The company operates 60 shipping terminals across 6 continents, of which container handling generates 80% of their revenue.  The first half of the year was a good one, profits up a whopping 36% over the same period a year ago. Things are looking bright for the mammoth company, despite further slowdowns in America and Europe. Developing nations continue to drive growth in shipping and demand world-wide.

Burj DubaiStanding Tall

Chief executive, Mohammed Sharaf, said: “DP World has had an excellent start to the year with gross volume growth 11 percent ahead of the prior period, improved revenue generation, a continued focus on cost management and improved terminal efficiencies resulting in EBITDA of $645 million and improved EBITDA margin ahead of expectations at 42.9 percent.’’

“Profit for the six month period before separately disclosed items was $281 million, close to profit levels last seen at our peak in 2008 as our container terminals have become more profitable following initiatives implemented as a result of the 2009 downturn.

“Our global portfolio, focused on both origin and destination cargo and in the emerging markets, is now more robust and better positioned to deliver profitable growth.’’

“We have continued to expand our global capacity, either through continued investment in new or existing terminals or through incremental investment focused on delivering greater efficiencies for our customers.

Smart Investing

According to The Day After Tomorrow: A Handbook on the Future of Economic Policy in the Developing World, almost half of global growth is coming from developing countries. As a group, it is projected that their economic size will surpass that of their developed peers in 2015.

“Developing countries have come to the global economy’s rescue,” said Otaviano Canuto, World Bank Vice President for Poverty Reduction and Economic Management (PREM),and co-editor of the book. “They are the new locomotives of growth which will move global growth forward while high-income countries remain stagnant.”

Further Projections

While the first half of the year was exceptionally strong, there are still some worries about just how much the looming economic slowdown in Europe and America will affect global demand, DP World CEO Sharaf doesn’t seem to be worried. “Historically the second half of the year has been stronger than the first half,’’ Sharaf said. “However, as we said in our update in July, there is uncertainty around the outlook for the global economy making it more challenging to forecast how global trade will develop in the second half of the year.

“The impact of this uncertainty has not, as yet, been reflected in the markets in which we operate and, with our focus on the more resilient emerging markets, we still expect to deliver full year results in line with expectations.”

The Future is Here

There’s more than one thing that a lot of the countries we have covered on the blog share. Aside from explosive growth, they also have very a low median age of population. There’s an interesting chart on Wikipedia that shows the median age of the countries of the world. Many of these Asian and African countries are climbing out of poverty on the backs of young, fresh, educated minds that are eager and willing to get a bigger piece of the pie for their families, both existing and planned.

The infrastructure that is being put in place now, for many of these nations will feed the growth of the populations. Economies will prosper. Trade will increase and demand will pull company profits along with it. Now is the time to look into the container industry. Pacific Tycoon is here to show you just how easy it can be. Let us guide you through the process.

Image: DubaiArchitecture

Source: DP World, BusinessJournal

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

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

16
Aug
11

Kuwait Megaport

I saw quite a few headlines last week regarding the development of the New Kuwait port on Boubyan Island. They were all the same. Iraqi Shiite militant group Ketaeb Hezbollah, grabbed the space on a few notable sites when they threatened to strike the port if development is not stopped.

Kuwait City, Liberation Tower

Digging further

The Development of this port, whose projected first phase is over $400 million and total planned development is well over a billion dollars is just one of many that are going on in the middle-east.

Aside from this project we found 9 others that were highlighted in September 2010 post for Construction Week Online. In the post they list the top 10 port projects going on in the Middle East. Qatar and Oman, both took three spots each on the list along with Saudi Arabia UAE, Kuwait, and Abu Dhabi rounding out the top ten.

Shiite Complaints

Iraq’s complaint, or rather the Iraqi Shiite’s complaint is that the new port will threaten existing shipping lanes. If so, they have a logical complaint, but Kuwait has invited a group from Iraq to visit and supposedly showed them the plans will not affect the existing shipping lines that Iraq has complained about.

Iraq is in the midst of rebuilding its own ports. Alongside the rebuilding of the ports is the rebuilding of the nation that has been torn apart by war. Both are in need of some serious upgrades and disruptions to Iraqi improvements through delays of shipments could cause a strain.

Megaport

Although in many of the headlines you will see, the word megaport is being linked to the Kuwait project on Boubyan island, it is far from the most expensive project going on in the region. That title belongs to Qatar. The number one fastest growing economy last year and possibly this year, too, is wasting no time in trying to keep that title.

Qatar is in the process of building a new port in Doha. It’s planned that the new 20km2 port, to be constructed in Economic Zone 3, Al Wakra, will transform Doha’s shipping industry. It will include five general cargo terminals and berths, four container terminals and berths and a roll-on/roll-off berth, plus berthing for tug and pilot boats. This is only one of the three port projects that Qatar has in the works right now and this one hits the scales at a cost of $7billion.

Kuwait’s port on the island will be Mega. The plan calls for 16 berths to be designed and an initial four berths to be up and running by 2015, while the staged development could see as many as 60 berths in operation on the island.

At this time, everything is still full steam ahead, even after last month when Ketaeb Hezbollah, which has claimed deadly attacks on US troops in Iraq and is believed to be backed by Iran, warned a South Korean consortium to halt work on the Kuwaiti port project.

Whether this turns into something nasty or not, it’s hard to say. One thing for sure is that the region is really picking up and all this port development means there’s big demand for more.

Image: SolarNavigator

Source: ConstructionWeekOnline, CargoNewsAsia, DredgingToday




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