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Wednesday, 26 August 2015

Zhejiang province plans merger of five regional ports

Authorities in the Chinese coastal province of Zhejiang have announced plans to integrate five major ports in the region under a single platform in a bid to optimize port operations, according to local news agency Caixin.

The five affected facilities include the ports of Jiaxing, Ningbo, Taizhou, Wenzhou and Zhoushan and the combined operations will be managed by a new entitiy, Zhejiang Port Investment Operation Group (ZPIO).

Once all five ports are fully integrated under the ZPIO umbrella they will form the largest port company in China in terms of port throughput.

The first step in the process will be the integration of Ningbo Port and Zhoushan Port, according to Zhejiang's governor, Li Qiang however it is unclear if officials from Zhoushan Port Authority are behind the move.

In June this year, Zhoushan port company announced plans to raise 614 million yuan by issuing about 200 million shares on the Shanghai Stock Exchange and had banked on a further 200 billion yuaninvetment following the IPO.

With the current dire state of the Chinese stock market however these plans may well now be on hold.

Elsewhere Chinese port sector has also been rocked this week with speculation of sky-high insurance costs emanating from the recetn blast at the port of Tianjin. The deadline chemical explosion killed 114 and injured a further 700 people in August and is expected to cost upward of $1 billion - $1.5 billion, according to estimates from Credit Suisse.

"Claims from the blasts are likely to undermine the financial performance of some regional players and those property and casualty insurers with high risk accumulation in the affected areas," a spokesperson from ratings agency Fitch commented.

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