POT
26/06/2014 08:41
GENERAL
REL: 0841 HRS Port of Tauranga Limited (NS)
GENERAL: POT: Delivering a Step Change for NZ International Trade
DELIVERING A STEP CHANGE FOR NEW ZEALAND INTERNATIONAL TRADE
Agreements will usher in era of 'big ship' visits for New Zealand and a new
ocean freight service
Freight and logistics management company Kotahi and New Zealand's freight
gateway Port of Tauranga have struck a strategic ten-year freight alliance.
This, along with a separate long-term agreement between Kotahi and Maersk
Line, the world's largest container shipping company, will deliver a
'step-change' for New Zealand's $95 billion international trade sector.
Kotahi Chief Executive Chris Greenough said Kotahi is focused on helping keep
New Zealand competitive on the world stage, by paving the way for the new
generation of container vessels to call in New Zealand's waters, delivering
significant efficiencies for exporters and importers .
"New Zealand doesn't have a big ship capable port and now is the right time
for key players to work together to build a capability within New Zealand to
receive these large vessels with all the efficiencies they will bring to New
Zealand. These ships will ensure New Zealand does not become a spoke to the
larger hubs across the Tasman, which would add 7-10 days to export transit
times.
"We can help level the playing field for New Zealand in international
markets. Increased collaboration will smooth out the peaks and troughs of our
agriculture-driven export sector and drive a step change in efficiency for
the Kiwi export supply chain. These larger vessels will also be a catalyst
for further efficiencies in land-based transport and the better co-ordination
of truck and rail movements," Mr Greenough said.
The new arrangements are founded on the following:
- Kotahi has committed to provide up to 1.8 million TEU export cargo
containers to the Port of Tauranga over the next 10 years, commencing 1
August 2014;
- Kotahi has committed significant export cargo to Timaru Container Terminal
(TCTS), for the next 10 years commencing 1 August 2014;
- The Port of Tauranga has committed to investment in infrastructure to
enable visits from the larger 6,500 TEU container ships within the next few
years;
- Port of Tauranga will, subject to certain conditions, issue shares to
Kotahi and Kotahi will take a stake in TCTS; and
- Kotahi has committed to provide up to 2.5 million TEU export cargo
containers to Maersk Line for the next 10 years, commencing 1 August 2014.
"A key aspect of the agreements outlined today is the continuing support for
the long term viability of New Zealand's regional ports. Reflecting the
strong growth of dairying exports from the South Canterbury region over the
past three years it has been possible to resume container ship calls to the
Port of Timaru while also retaining significant volumes through Port of
Lyttleton and maintaining, long-term, container ship calls at a number of
other regional ports," Mr Greenough said.
"We recognise that ports play a key role in the livelihoods of local
communities and believe the changes outlined today will help regional
communities stay connected as we enter the era of bigger ship visits to New
Zealand," he said.
Port of Tauranga Chief Executive Mark Cairns said: "The agreement with Kotahi
will be immediately earnings accretive for Port of Tauranga and will
transform the New Zealand supply chain.
"The cargo commitments give Port of Tauranga the certainty to proceed with
the infrastructure to accommodate the 6,500 TEU ships. This will in turn spur
the development of New Zealand's coastal shipping industry as freight
consolidates on Port of Tauranga as a hub port for the country.
"The agreement recognises Port of Tauranga's long-term investment programme
in freight marshalling facilities across the country including: MetroPort in
Auckland and more recently PrimePort Timaru and our new freight hub in
Rolleston, Christchurch. Port of Tauranga will continue to provide shippers
across the country the most efficient freight options to markets thanks to
these investments.
"Our ability to accommodate the next generation of large ships will also
address New Zealand's disadvantages in international export markets,
including the country's distance from major transport routes and its
relatively small and dispersed freight volumes.
"We are looking forward to expanding our already highly-productive
relationship with Kotahi and to increased visits from the Maersk Line fleet,"
Mr Cairns said.
Kotahi and Port of Tauranga are continuing to explore and negotiate other
operational efficiencies.
Maersk Line New Zealand Managing Director Gerard Morrison said: "The new
long-term contract with Kotahi represents a new model of collaboration for
our business and provides certainty for Maersk Line to build on our 17 year
track record of providing premium services to the New Zealand market.
"Reflecting this, and due to the guaranteed freight volumes, Maersk Line has
committed to introducing a new 4,500 TEU service from October 2014, to
Tanjung Pelepas in Malaysia, to provide additional capacity, and complement,
the current Northern Star and Southern Star services.
"We now have a clear path to work on the introduction of Maersk Line's 6,500
TEU vessels to New Zealand. These ships are significantly more fuel efficient
on a per-container basis and will reduce the carbon footprint of the ocean
freight component of New Zealand exports by approximately 22% per container
unit, compared to the existing New Zealand industry average," Mr Morrison
said.
Details of the agreements:
Volume and container commitments: Port of Tauranga will issue two million
shares to Kotahi, representing 1.5% of Port of Tauranga's issued share
capital, in two tranches. Kotahi's rights to the shares, including dividends,
are subject to Kotahi delivering on certain freight volume commitments over a
ten year period.
Timaru Container Terminal (TCTS): Kotahi has agreed to commit export traffic
to Port of Tauranga subsidiary TCTS, which holds a 35 year lease over the 10
hectares of terminal operating area at PrimePort Timaru. In exchange for the
commitment, Kotahi will get a 49.9% shareholding in TCTS. Operations at TCTS
will be managed under a management contract with Port of Tauranga. As a
result of this agreement between Kotahi and Port of Tauranga, TCTS plans to
invest in port infrastructure including another mobile harbour crane to
handle the increased container traffic.
Maersk Line: Kotahi has agreed to commit a significant volume of export cargo
to Maersk Line for New Zealand coastal and South East Asia trans-shipment
ports. This gives Maersk Line volume certainty to plan for the introduction
of 6,500 TEU ships to New Zealand. Further information on the new services to
be introduced will be provided when details are confirmed.
ENDS
Contact for further information:
Port of Tauranga Kotahi
Richard Inder Belinda Leslie
Merlin Consulting Baldwin Boyle Group
+64(0)21645643 +64(0)2102857579
Maersk Line New Zealand
Tine Jensen
+64(0)212748113
About Kotahi
Kotahi, New Zealand's leading freight and logistics management company,
specialises in matching freight requirements for export and import businesses
with ocean, rail, and road transport providers to ensure New Zealand remains
competitive in international markets.
Kotahi, a joint venture between Fonterra Co-Operative and Silver Fern Farms,
launched in 2011, currently provides freight management services for more
than 30 customers from sectors including meat export, wool, dairy, timber,
pharmaceuticals, horticulture and seafood. Kotahi's name means 'standing
together as one'. For more information about Kotahi please visit
www.kotahi.co.nz
Australasian advisory firm Cranleigh provided transaction structuring and
financial advice to Kotahi on the freight agreement with Port of Tauranga.
About Port of Tauranga
Port of Tauranga (NZX.POT) is New Zealand's largest port. It operates wharves
at Sulphur Point and Mount Maunganui in Tauranga, MetroPort, a rail-linked
inland port in South Auckland, PrimePort Timaru and is developing a new
intermodal freight hub in Rolleston southwest of Christchurch.
The Port of Tauranga Group includes: Tapper Transport, New Zealand's largest
wharf cartage company; Quality Marshalling, a forestry materials handling
company; Northport, which operates a deepwater commercial port at Marsden
Point; MetroPack, a container packing and unpacking facility based in
Auckland and Tauranga; MetroBox, a container cleaning, repair and storage
facility, and New Zealand freight specialist Cubic Transport Services. For
more information about Port of Tauranga please visit www.port-tauranga.co.nz
About Maersk Line
Maersk Line is the world's largest container shipping company, serving
customers all across the globe. Maersk Line has 32,000 employees across 362
offices in more than 125 countries. As a leading provider of container
shipping services, it is Maersk Line's mission to deliver second-to-none
services enabling our customers to keep the promises they in turn make to
their customers.
Maersk Line sources goods from anywhere in the world, creating efficiencies
in our customers' supply chains, and making it possible for commodities to
reach new markets more quickly. Maersk Line is a part of the Maersk Group and
based in Copenhagen, Denmark. The Maersk Group employs 89,000 people, and
generated 47 billion US dollars in revenue in 2013.
In New Zealand, Maersk Line currently operates five 4,500 TEU vessels on the
Southern Star Service and five 2,900 TEU vessels on its Northern Star
service. It also operates five of the 10 vessels on the America (OC1) service
sized between 3,500 and 3,700 TEU. For more information about Maersk Line
please visit www.maerskline.com
INVITATION TO MEDIA BRIEFING
Media are invited to a briefing on the agreements Thursday 26 June at 11:30am
(NZT), with Kotahi Chief Executive Chris Greenough, Port of Tauranga Chief
Executive Mark Cairns and Maersk Line New Zealand Managing Director Gerard
Morrison.
Venue: Boardroom, level one, Hilton Hotel, Princes Wharf, Auckland.
Following the briefing, media are invited to attend a lunch with key industry
stakeholders. Hilton Hotel, Aquamarine Room 3.
New Zealand & international media phoning in:
For those unable to attend in person, the conference call details are:
New Zealand toll free: 0800 450 585
Australia, toll free: 1800 554 798
UK: 0808 234 8407
Quote the conference ID 7112530 to the operator.
RSVP to attend the press conference and lunch event in person to:
[email protected] or phone mobile +64(0)21928016.
End CA:00252070 For:POT Type:GENERAL Time:2014-06-26 08:41:12
