The Chinese ‘state-owned enterprise’ (COSCO subsidiary) CSPL and the Port of Hamburg announced last year that CSPL would take a 35% equity holding in the new Container Terminal Tollerort (CTT). The terminal is designed to handle ultra large container vessels, especially those on Asian and Chinese trades. Consequently, COSCO aspires to use CTT as what it calls its “preferred hub.”
The prospect of a major terminal being part-owned by a Chinese state-owned enterprise has provoked a reaction from some politicians in Germany, including members of the coalition government. The Federal Economics Minister, Robert Habeck, and the Foreign Minister Annalena Baerbock, opposed the sale on the grounds that it would give China influence over German infrastructure. It appears that the Chancellor, Olaf Scholz, supported the purchase, with a compromise rumoured to be emerging whereby COSCO will only take 24.9% of the equity of the terminal.
COSCO has interests in a string of ports across the world. Through its ‘COSCO Shipping Ports Limited’ (CSPL) subsidiary it owns major stakes in terminals in Abu Dhabi, Valencia, Bilbao, Chancay and it recently purchased a 90% holding in Zeebrugge. It also fully and directly owns terminal operations at Piraeus. It holds smaller stakes in a further nine terminals in East Asia, the Middle East, North America and Europe. It also owns a large number of terminals in China.
Owning minority stakes in container terminals is not unusual in the container port sector. There is no suggestion that COSCO will influence the operational management of the CTT, indeed COSCO’s partner at CTT, Hamburger Hafen und Logistik AG (HHLA), issued a statement titled “The Port of Hamburg will not be sold to China.”
What these arguments tell us is that it is becoming increasingly difficult for Chinese companies to invest and, to a lesser extent sell, in many parts of the world. There are many reasons for this, but the Chinese have aggressively kept non-Chinese container terminal companies as minority parties in their infrastructure, so perhaps it is not so surprising. However, there will be implications for logistics markets. At one time Chinese investors were significant purchasers of logistics assets worldwide, especially ‘hard to sell’ assets. Their absence will have an impact on the price of such infrastructure businesses.
Source: Transport Intelligence, 25th October 2022
Author: Thomas Cullen, Chief Analyst, Ti Insights