Ministry of Commerce (MOC) of the People's Republic of China informed that AP Moeller-Maersk A/S (APM), Hutchison Whampoa Ltd and three other companies will invest 4 billion yuan (US$495 million) in Shanghai's Yangshan port as growing global trade is increasing cargo demand in China.
The five companies are going to enter a venture to buy and develop the second phase of Yangshan, according to a statement to the Hong Kong Stock Exchange from Hutchison, the world's largest port operator. Hutchison, controlled by Hong Kong billionaire Li Ka-shing, owns 32 percent of Yangshan's second phase.
AP Moeller, Hutchison and other companies have been seeking to invest in the US$16 billion Yangshan deep-water port, which will double Shanghai's cargo handling capacity by 2010 to bring it close to becoming the world's busiest harbor. Shanghai, China's premier financial city, is located at the confluence of the Yangtze and Huangpu rivers.
"Yangshan's growth is guaranteed," said Oscar Choi, an analyst at DBS Vickers Securities Hong Kong Ltd. "Shanghai captures a large portion of the cargo movement in China's Yangtze River Delta. Shanghai doesn't want to be just a regional port, but a hub that will compete with other ports such as Busan."
APM Terminals, a unit of Copenhagen-based AP Moeller, the world's biggest container line, will own 32 percent of Yangshan Phase II. The company announced the investment on Monday without giving financial details.
Shanghai International Port (Group) Co, which already operates the first US$1.7 billion phase of Yangshan, will own 16 percent of the venture. Cosco Pacific Ltd, which invests in ports in Hong Kong and the mainland, and China Shipping (Group) Co, the country's second-biggest shipping line, will each have a 10 percent stake.
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