Keppel T&T expands with first port project in China

The company has signed a joint venture agreement with Sinotrans to operate a river port along Yangtze River, which is a major trade route in China.

Keppel Telecommunications & Transportation Ltd has signed a joint venture agreement with Sinotrans Ltd. to jointly develop and operate a river port along Yangtze River, serving Wuhu City, Anhui Province and the central region of China.

This marks Keppel T&T’s first port project along Yangtze River, which is a major trade route in China.
The joint venture, Wuhu Sanshan Port Co., Ltd, will be 50:50 held by Keppel T&T and Sinotrans Ltd. respectively. Wuhu Sanshan will have an initial registered capital of RMB280 million, injected by the two shareholders in equal proportion.

Apart from port operations, Wuhu Sanshan also aims to provide integrated logistics services such as international freight forwarding, and other third party logistics services. This project is Keppel T&T’s second partnership with Sinotrans Group, with their first being Lanshi Port, a river port along the Pearl River, in Foshan, Guangdong Province.

The joint venture agreement ceremony was graced by Vice Mayor of Wuhu, Mr Lin Hai, and the agreement was signed between Keppel T&T CEO, Mr Pang Hee Hon and President of Sinotrans Ltd., Mr Zhang Jianwei.

Mr Pang said, “Wuhu is experiencing strong economic growth due to its high level of industrial activities arising from the attractive and business-friendly environment. Therefore, Wuhu Sanshan port’s strategic location at the intersection of major industrial hubs along the lower reaches of Yangtze River will allow Keppel T&T to take another important step in our strategy to expand beyond
our base in southern China.”

Wuhu City, the second largest economy in Anhui province, is located near economic hubs, Shanghai and Nanjing, the capital of Jiangsu province. It is also an important rail hub in eastern China with five major railway lines passing through it.

Consequently, this has enabled Wuhu to capitalise on its location for growth. In 2010, Wuhu’s GDP reached RMB110.86 billion, an increase of 18.2% over the previous year. Wuhu’s GDP is projected to double during China’s 12th Five-year Economic Plan period (2011 to 2015), from RMB100 billion to RMB300 billion.

Major appliance makers such as Midea Group and Gree Electric Appliances have set up their production facilities in Wuhu. Carmaker, Chery Automobile, is also headquartered in Wuhu.

Consequently, big auto parts makers like Siemens VDO Automotive, Magneti Marelli, a subsidiary of Italian company Fiat Group, among others, have also set up facilities in Wuhu.

Earlier in January 2011, Keppel T&T signed the agreement for land use rights with the Sino-Singapore Tianjin Eco-City Investment and Development Co Ltd for the development and operation of a green integrated logistics distribution centre in the Tianjin Eco-City, marking Keppel T&T's first and significant step into North China. Spanning 2.8 hectares and featuring more than 30,000 square metres of modern warehouse space when completed, the integrated logistics distribution centre will be wholly-owned and operated by Keppel T&T.

In July 2011, Keppel T&T also signed a non-binding Memorandum of Understanding with the Construction Office of Sino-Singapore Jilin Food Zone to jointly develop a logistics park to serve the proposed Jilin (Sino-Singapore) Food Zone. Both parties are now conducting the feasibility studies for the proposed logistics park which will serve all stakeholders in the Food Zone.