ICTSI partners with French group for Nigerian port project

MANILA, Philippines – International Container Terminal Services Inc. (ICTSI) announced it would partner with CMA Terminals of France – the world’s third largest container shipping line – to improve the viability of its Nigerian operations.

ICTSI treasury director Arthur Tabuena told the Philippine Stock Exchange that its subsidiary – ICTSI Capital BV (ICBV) – executed a share purchase agreement with CMA Terminals (CMAT).

Tabuena said that, under the agreement, ICBV would divest its 25% interest – made up of 25,000 shares in Nigerian subsidiary Lekki International Container Terminal Services LFTZ Enterprise (LICTSLE) – worth US$25,000 in favor of CMAT.

The new partnership is meant to add to the financial performance of the company’s project in the Lagos Free Trade Zone at Ibeju Lekki, in Lagos State in Nigeria.

The joint venture explained

Tabuena noted that having CMA Terminals as a project parner “is expected to help accelerate the volume ramp-up of the company’s green field project in the early years of its operation and establish a more stable core throughput for LICTSLE in the long run.”

CMAT will also pay 25% of LICTSLE’s total debts and accrued expenses, in addition to a cash payment. The joint venture, Tabuena added, “will also reduce the investment requirement of ICTSI in LICTSLE to its pro-rata shareholding.”

ICTSI – headed by businessman Enrique Razon – invested $225 million to give cargo handling equipment and information technology infrastructure at the Lekki container terminal in Tolaram Port in Lagos.

ICTSI signed a 21-year sub-concession agreement for exclusive development with Lekki Port LFTZ Enterprises. It also intends to invest $1.4 billion in the project, which is slated for completion by 2016.

The best place to invest

In a Bloomberg interview with Razon, who was in Davos, Switzerland for the World Economic Forum, Razon said Nigeria was the best place to invest in 2014.

Notes Razon, “They produce over 2 million barrels of oil a day, huge population, GDP close to $300 billion.”

“They need power, they need ports, they need many things. The government is much more serious than in the past of trying to build up infrastructure and build the economy. They are a very powerful consumer economy,” he added.

Bulding for the future

The port will have a 1,200 meter quay and an annual capacity of 2.5 million 20-foot equivalent units. The capabilities of the port will make it the single largest terminal in sub-Saharan Africa when completed, with its location making it a potentially dominant transshipment hub.

ICTSI also announced a plan to invest $100 million over the next 5 years to set up its first terminal in the Democratic Republic of Congo. ICTSI – via subsidiary ICTSI Coöperatief U.A. – controls ICTSI DR Congo with 60%. Its partner, La Societe De Gestion Immobiliere Lengo (SIMOBILE), owns 40%.

ICTSI earnings jumped 27% to $135.65 million in the first 9 months of last year. This was an increase from $106.84 million in the same period in 2012, rasied byb revenues coming from continued overseas expansion.

Port operations revenues went up 19% to $624.7 million from January to September last year. In the same period in 2012, the revenues were pegged at $524.7 million.

The company’s 7 key terminal operations in Manila, Brazil, Poland, Madagascar, China, Ecuador and Pakistan accounted for 79% of ICTSI’s consolidated volume in the first 9 months of last year. – Rappler.com