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1. Paul Y-ITC to start building Yangtze ports

2. Paul-Y ITC buys into Nantong Port

1. Paul Y-ITC to start building Yangtze ports
Wong Ka-chun, The Standard 15 August 2005

Paul Y-ITC Construction Holdings, a unit of tycoon Charles Chan's business empire, said it will invest 435 million yuan (HK$417 million) on a 45 percent stake in Nantong Port.

The latest move is in keeping with the company's strategy of expansion since since it transformed from a construction company to a port operator. Paul Y-ITC previously said it is planning to invest up to HK$5.8 billion over the next three years to develop and buy ports on the Yangtze River.

The company has sold the original construction service and engineering businesses to its sister firm, Paul Y Engineering.

Nantong Port, the second largest bulk cargo distribution centre down-stream on the Yangtze River, is the second mainland port asset acquired by Paul Y-ITC. The company purchased a 54 percent stake in Yangkou Port in Nantong in April last year.

Paul Y-ITC will use internal resources to pay cash for a 45 percent stake in Nantong Port, while Nantong State-owned Assets Commission will hold 43 percent interest and SDIC Transport will own the remainder.

``We are focusing on the rapidly developing ports and infrastructure sector in the mainland and look forward to attractive growth prospects,'' the company said in a statement.

Nantong Port currently owns 23 berths in total, of which five are for vessels in the 50,000-tonne class and 10 berths for vessels of 10,000-tonne class. There are also two 100,000-tonne and one 50,000-tonne iron ore and general berths under construction which will be put in use in the second quarter next year. Since then, the total throughput capacity will be increased by 54 percent.

Nantong Port achieved a cargo throughput of 33.33 million tonnes and handled 251,000 TEUs (20-foot equivalent units) in 2004.

Apart from the latest move on theYangtze, the company is exploring opportunities in other parts of the river by acquiring ports at Nanjing, Wuhan and Chongqing.

The four ports acquisition would cost up to HK$1.2 billion.

2. Paul-Y ITC buys into Nantong Port
TOH HAN SHIH, SCMP 15 August 2005

Port developer Paul Y-ITC Construction Holdings will invest $417 million to acquire a 45 per cent stake in Nantong Port Group (NPG), the second-largest bulk cargo centre along the Yangtze River.

Hong Kong-listed Paul Y-ITC would fund the investment from internal resources and the money will be used to expand Nantong Port's facilities, increase its working capital and rationalise its capital structure, the firm said yesterday.

Part of the $417 million investment will be used to construct two berths for 100,000-tonne ships and one berth for 50,000-tonne vessels, increasing NPG's throughput capacity by 54 per cent when they start operations in the second quarter of next year, said Paul Y-ITC deputy chairman Tom Lau.

Last year, NPG achieved a cargo throughput of 33.33 million tonnes, accounting for 46 per cent of total throughput at Nantong Port.

In the first half, the group's turnover was 266 million yuan and its net profit was 10.5 million yuan.

Mr Lau said the advantage of investing in NPG was that Paul Y-ITC's operations were located in the same city. Its existing project, Yangkou Port is a seaport facing the Pacific Ocean on the east coast of Nantong, while Nantong Port is a river port along the Yangtze River.

"The benefit of having a seaport and river port is that we can consolidate our resources and integrate our operations to gain greater efficiency and economies of scale. Tapping into the experience, skill base and business networks of Nantong Port Group, this investment will give Paul Y-ITC liquid and solid bulk material handling capabilities to complement our Yangkou operations," said Mr Lau.

The company acquired 54.06 per cent of Yangkou Port in April last year, for which the firm planned a capital expenditure of up to $4.5 billion until 2008, when the port starts operations, said Mr Lau.

Paul Y-ITC has been granted the right to reclaim 42 sq km of land to sell to petrochemical industries, he added.

"We plan to acquire other river ports in future to build a transport network that will enable shippers to ship upstream along the Yangtze River more efficiently," said Mr Lau without giving details.

Wang Wei-guo, NPG chairman, said: "By introducing Paul Y-ITC as a strategic investor, we are confident that NPG could raise its core competitiveness."

After Paul Y-ITC completes its acquisition of 45 per cent of NPG, another 43 per cent will be held by the Nantong State-owned Assets Commission, while SDIC Transport, a state-owned investment firm, will own the other 12 per cent.