ICTSI mulls bids for new projects, eyes Africa
LISTED port operator International Container Terminal Services, Inc., (ICTSI) is looking to bid for new projects this year to sustain its growth momentum, as global trade faces headwinds arising from the Trump administration’s protectionist policies.
ICTSI President and Chairman Enrique K. Razon, Jr. on Thursday said the firm is considering opportunities in Africa, and is also one of three bidders for a majority stake in Greece’s Thessaloniki Port.
“We’re in the midst of a bid right now, [in] Greece, it’s not yet done. We’re already at the second round. [Maybe there will be] three rounds,” Mr. Razon told reporters in a mix of English and Filipino at the sidelines of the ICTSI stockholders meeting.
The second round of bidding for the sale of a 67% stake in Greece’s second-largest port will end on Friday. Mr. Razon said it will take around two to three months before the bidding is completed. Thessaloniki Port has a market value of $211 million and had a throughput of 344,277 20-foot equivalent units (TEUs) last year.
Aside from ICTSI, Dubai-based P&O Steam Navigation Company (DP World) and German private equity Deutsche Invest Equity Partners are also in the running for the project.
“[Next] we have a couple [of projects] that we’re looking at... in Africa,” the ICTSI chief added.
Mr. Razon said US President Donald J. Trump’s protectionist policy is the biggest threat to global trade.
“Trump is the biggest risk, by far, probably the only risk. Economic growth is always a risk but Trump is the biggest at the moment,” he said. “[In the] Philippines, the [risk is on the] government’s infrastructure projects, if they can execute that in their time frame, then that is very good for the country.”
To minimize risks from US protectionism, Mr. Razon said the company will continue to grow by adding more terminals around the world. “Asia will be impacted the most from protectionism in the US, and you have the elections in the EU (European Union), so far its not a pretty picture,” he added.
The ports tycoon is confident ICTSI will get “more contracts” as global risks also bring opportunities.
ICTSI, which operates 30 terminals in 20 countries, lowered its budget for capital expenditures this year to $240 million from the $420 million it set for 2016. Last year, the company spent only $391.9 million of the programmed capex as most of its expansion projects were completed.
“[The lower spending budget is a] reaction to completion of many of our projects, [there’s] nothing much in the pipeline,” Mr. Razon said.
In 2016, ICTSI completed the initial stage of its new container terminals in Australia, Democratic Republic of Congo and Iraq, while the development of projects in Honduras and Mexico are ongoing.
In a separate interview, ICTSI Senior Vice-President for Asia Pacific Christian R. Gonzalez said its proposed $30-million common-user barge and roll-on, roll-off (RoRo) terminal in Cavite will be formally launched on Friday.
The Cavite Gateway Terminal (CGT), which will support government initiatives to decongest Metro Manila roads, has been approved and “basic operation” could start by the first quarter of 2018.
The terminal will be located within a six-hectare property in Tanza, Cavite. It was identified as the prime location for the project because of the province’s high economic density -- in addition to the Cavite Export Processing Zone, which houses over 400 actively operating companies.
ICTSI earlier said Phase 1 of CGT’s development will support a total throughput of 115,000 TEUs every year.
The port operator saw its attributable net income soared 207% to $180 million in 2016, driven by strong volume growth and revenues from its port operations.
Shares in ICTSI increased 10 centavos or 0.11% to end Thursday’s trading at P88 each.