KWL welcomes new French rival at Kingston ports

KWL welcomes new French rival at Kingston ports

BY STEVEN JACKSON Business reporter

Friday, May 15, 2015

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JAMAICA Producers Group (JP), which holds the largest equity stake in Kingston Wharves Ltd (KWL), hopes to profit from increased competition at the ports arising from the newly privatised Kingston Container Terminal (KCT).

"The recent decision to privatise the operations of KCT will bring a new competitor to the local logistics landscape, but it may also heighten the level of activity at the port of Kingston by generally improving its attractiveness to the global network of shipping lines. KWL is embracing these changes and is proactively developing new business opportunities that benefit from its unique position as the Caribbean region's leading multi-purpose port," according to a statement prefacing the JP financials signed by JP Chairman Charles D Johnston.

The putative embrace of competition at the wharf comes as JP made $159 million in after-tax net profit for its March quarter 2015, or 355 per cent more profit year-on-year. JP earned a sizable portion of its profit from its share in associate ventures led by KWL. It also made profit from a gain on the disposal of assets. JP holds $5.7 billion in equity as at March 2015 compared to $5.8 billion a year earlier.

In April, Government and the French-owned Terminal Link CMA CGM consortium signed an agreement that includes running the port for 30 years and investing US$600 million to upgrade and expand KCT under a new name -- Kingston Freeport Terminal Ltd.

Last October, in preparation for the privatisation and also the expansion of the Panama Canal, KWL began construction of its US$20-million 'new total logistics facility'. The move forms part of a US$70-million phased upgrade aimed at doubling throughput at the KWL to one million 20-foot container units. The upgrade will allow the wharf, already one of the busiest on the island, to accommodate larger vessels traversing the expanded Panama Canal.

"KWL experienced a 28 per cent increase in its net profit in the first-quarter of 2015 when compared to the first quarter of 2014. This resulted from improved volumes of cargo handled by the port," stated Johnston.

KWL's largest shareholders include JP at some 42 per cent and US-based listed company Seaboard at 21 per cent. Last September, National Commercial Bank of Jamaica, the island's largest bank, sold all its holding in KWL at some $3 billion.

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