Port keen to invest in subsidiary abroad

CHON BURI : Laem Chabang Port is considering options to set up a subsidiary for overseas investment to increase its revenue.

Laem Chabang Port ranks 23rd in the world for container volume. Its second phase includes seven ports with a capacity of 6.8 million TEUs per year.

Lt Sutthinan Hatthawong, managing director of Laem Chabang Port, said the subsidiary might be a joint venture with the private sector in order to invest in overseas ports such as Dawei in Myanmar.

Setting up a subsidiary is allowed under the Port Act, but further discussion with the Finance Ministry is needed for a detailed plan to be outlined.

"We might not conduct operations directly but invest as shareholders [in the subsidiary] as we believe the private sector has more connections and is more flexible," he said.

The World Shipping Council reported PSA Singapore, the Port of Hong Kong and DP World of Dubai were among the top 10 container ports in the world last year in terms of volume.

These three ports invest in many areas worldwide, said Lt Sutthinan, adding that Laem Chabang ranked 23rd with 5.83 million twenty-foot equivalent units (TEUs).

Container growth is expected to increase by 3.5% this year due to the slowdown in the world economy, down from an earlier forecast of 7.5%.

Growth struggled to 3% last year, which he attributed to the major floods, compared to a steady 10% before the Hamburger crisis.

Lt Sutthinan said the second phase of Laem Chabang includes seven ports with a capacity of 6.8 million TEUs per year. The last three ports will start construction later this year.

A study and design of the third phase have been completed, but environmental and health impact assessments are pending due to opposition from local communities.

"Since the second phase has not reached full capacity, the third phase will be constructed when demand comes. But I won't give my word that the problem will be solved," he said, adding the third phase requires no compensation for repatriation as there is no land use.

It will take three years to construct and two years to seek business operators to invest for the third phase, and it has a planned capacity of 8 million TEUs.

"In the end, we need to look at the country's interest. If the people or government decides not to go ahead, it won't happen," said Lt Sutthinan.

In fiscal 2012, the port generated 6.72 billion baht in revenue, with a 5.08 billion net profit. It targets a 5.16 billion profit this year and 5.19 billion in 2014.

Laem Chabang will invest around 5 billion baht next year, of which 2 billion will be for constructing coastal ports with the rest for a rail link to the port.

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Writer: Nanchanok Wongsamuth
Position: News Reporter