(Yicai Global) Jan. 24 -- China COSCO Shipping's shipping port unit will spend USD225 million to buy 60 percent share of Terminales Portuarios Chancay in Peru.
TPCH will thus become the first South American port project in which COSCO Shipping is the dominant shareholder and the second one overseas controlled by its port investment fund, state Securities Times reported today.
TPCH is a unit of Peruvian mining company Volcan Compania Minera. Cosco Shipping Ports and Volcan Compania Minera signed their agreement yesterday at the 2019 World Economic Forum in Davos, Switzerland. The shipping port unit will pay USD56 million up front.
The fund is a cooperative project between COSCO Shipping and Beijing Greenland Holdings, who embarked on a cooperative relationship in 2017. COSCO Shipping pooled a global port fund to invest in and acquire high-quality terminals and ports worldwide with their assets, with the Beijing-based property developer participating as cornerstone investor. The two also jointly invest in and construct logistics facilities.
"The investment in Chancay terminal enabled us to further extend our reach to South America. The prospective terminal at Port of Chancay will be the company's first terminal in South America and should help reduce the deficiency in port infrastructure in Peru," Zhang Wei, vice chairman and managing director of Cosco Shipping Ports, said at the Davos signing, online media Seatrade Maritime News reported.
TPCH is based in Chancay Bay in the central part of Peru about 58 kilometers north of Lima, the national capital. It is a good geographic location with easy access to the country's economic heart. It is also a natural deep-water port whose depth of up to 16 meters accommodates large ships.
The project includes a multipurpose wharf, container terminal and supporting infrastructure. The plan is to build four new berths in the first phase, two multi-use and two for containers. Designed annual throughput is 1 million twenty-foot equivalent units.
A fruit of long and friendly cooperation between China and Peru, the collaboration between COSCO Shipping Ports and Volcan will greatly improve the latter's construction of port and logistics infrastructure. It will also facilitate trade between the countries and deepen their cultural amity. These large companies both wield great domestic influence, noted Mercedes Araoz, Peru's vice president.
The project will vitalize and bring business opportunities to Peru's economy and spur other Chinese firms' investment and collaboration in the country, she added.
Editor: Ben Armour