The rise of Chinese global terminal

operators
Ningbo Maritime Silk Road Port Conference
12th July 2017

Tim Power
Managing Director, Drewry www.drewry.co.uk

power@drewry.co.uk
Agenda

• Historical overseas development of Chinese Global Terminal Operators

• Chinese GTO growth path

• OBOR and beyond

• View from overseas

• What’s next
Historical development

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 Chinese Port Terminal Operations: 2002
Very limited overseas presence. Shipping line driven

Port

4 Chinese port players on OBOR www.drewry.co.uk

 Chinese Port Terminal Operations: 2007
Tentative steps overseas. Shipping line interests remain key driver.

Port

5 Chinese port players on OBOR www.drewry.co.uk

 Chinese Port Terminal Operations: 2012
Increased geographical scope. Continued expansion in China.

Port

6 Chinese port players on OBOR www.drewry.co.uk

 Chinese Port Terminal Operations: Today
Broad geographical scope. Wider range of players. Growth through acquisition

Port

7 Chinese port players on OBOR www.drewry.co.uk

 Evolution of Chinese Terminal Operators Throughput
Equity TEU, selected years
100 15%

12%

% Equity TEU overseas

75
Million Equity TEU

9%
50
82.6 6%
67.9
25
33.7 3%

0 0%
2007 2012 2016
COSCO / China Shipping / SIPG / China Merchants
% Equity TEU in non-Chinese terminals

8 The rise of Chinese global port operators www.drewry.co.uk

 Comparison with ‘Big Four’ Terminal Operators
Equity TEU, selected years
200
175.3
162.8
150 141.5
Million Equity TEU

100
82.6
67.9

50
33.7

0
2007 2012 2016

Top Three Chinese Operators Top Four Global Operators

9 The rise of Chinese global port operators www.drewry.co.uk

 Comparison with ‘Big Four’ Terminal Operators
Equity TEU, 2016
60
52.4
50 45.6
Million Equity TEU

40.0
40 37.3
31.5
30 27.9
23.2
20

10

0
PSA Hutchison DP World APM COSCO / China SIPG
Terminals China Merchants
Shipping
2016

10 The rise of Chinese global port operators www.drewry.co.uk

Growth path

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 Chinese port companies: categories

• Liner origin (CPL, CSTD): similar to APMT, TIL

• Port companies with strong home base (e.g. SIPG): similar to HPH, DP World,
PSA

• Developer companies: CMPorts

• Other players: construction companies, manufacturers

12 The rise of Chinese global port operators www.drewry.co.uk

 Growth path: geographical scope broadening; emerging
markets focus

Emerging
markets

Market focus/
risk

Mature Equity teu, 2016

markets

Regional Geographical spread/ Global

degree of internationalism

13 The rise of Chinese global port operators www.drewry.co.uk

 Growth path: high proportion of M&A by Chinese operators

90%
M&A

80%

70%

60%

50%

40%

30%

20%

10%

0%
0% 20% 40% 60% 80% 100% 120%

-10%
Organic Minority control Majority control

14 The rise of Chinese global port operators www.drewry.co.uk

OBOR and beyond

www.drewry.co.uk
OBOR and beyond
Significant investment in port assets along the maritime highway; but geographical
scope is far wider

Port
View from overseas
Chinese GTOs are good business
partners
Chinese GTOs bring investment
Land will not be sold
Port authority (state) remains the
landlord

Ports are strategic national

assets
Should favour domestic player
supply chains
Limit overseas investor stakes
Require reciprocity
What’s next?

www.drewry.co.uk
 Fill in the gaps
Latin America market entry; Africa expansion; Asia expansion

2016 China Overseas Project Value

of Newly Signed Contracts

Africa Asia
36% 43%

Port
Oceania
4%
Europe
6% N America Latin America
19 3% 8%
The rise of Chinese global port operators www.drewry.co.uk
 Acquisitions?

20 The rise of Chinese global port operators www.drewry.co.uk

enquiries@drewry.co.uk
www.drewry.co.uk

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