Kingston Wharves gets free zone approval
Cargo handler to build global logistics complex
KINGSTON Wharves Limited got approval for free zone status of the port area from the Ministry of Industry and Commerce.
The cargo handler plans to build an "all-in-one, global logistics complex with Special Economic Zone benefits".
This will enable the company to "offer a level of service to cargo consolidation and freight forwarding customers not seen in Jamaica before", according to the company's latest annual report.
The cargo handler, which is undertaking an expansion to make room for additional cargo after the Panama Canal expansion is complete (now expected to be in 2016), had raised $1.8 billion by selling a 25 per cent stake in the cargo handler to Jamaica Producers Group (JP), at the beginning of 2012, to finance the project.
The company estimates that it will cost up to US$50 million ($5.5 billion) to complete, although it postponed demolishing warehouses and dredging activities to this year.
As part of the redevelopment project, Kingston Wharves will remove and relocate some of its existing warehouses off the wharf. Administrative buildings will also be moved and repositioned.
A new area for ships at the wharf will be created -- the new berthing facility will be 7,969 square metres. Dredging to accommodate larger vessels at berths 5 through 6 will also take place.
The final part of the plan is to increase the cargo handler's stowage capacity by 41,437 square metres.
"In preparation for the overall upgrading of the multi-purpose terminal fleet, facilities and business processes geared at maintaining the Group's competitive edge in the region in 2013, approximately $461.5 million was spent on cargo handling equipment and terminal management software," said the company in its annual report.
This year, the company plans to construct a first-class maintenance area to accommodate its expanded terminal fleet and planned changes in equipment mix, while the implementation of information systems aimed at enhancing maintenance management and inventory is also scheduled for completion in 2014.
"The new facility will allow our maintenance and operations team to safely achieve the targeted equipment reliability and availability of 98 per cent", said the annual report.
The cargo handler also bought two stevedoring operations over the course of the last year, making it the largest stevedore on the wharf.
It inked a deal to acquire Allied Trucking and Maritime Services's stevedoring business on Port Bustamante for US$2.95 million (J$319 million), subject to certain terms and conditions, on February 14.
Shipping Services (Stevedoring) Limited, which was acquired last April for an undisclosed sum, might have been a smaller stevedoring operation, given that KWL said that it paid less than one per cent of its total asset base, which was $12.2 billion as at December 31, 2012.
Kingston Wharves is projecting a decline in container traffic this year, but it expects to capitalise on expected increases in targeted niche markets — general, break bulk and project cargo.
"Since the start of 2014, there has been an increase in the importation of these cargoes and many more are expected to come," said the management discussion of the company chaired by Kingston Wharves CEO, Grantley Stephenson.
Kingston Wharves' bottom line grew from $525 milion in 2012 to $818 million last year.
Its berth redevelopment and modernisation programme started in 2006 with the rehabilitation and re-development of Berths 8 and 9.