LISTED global port operator International Container Terminal Services Inc. (ICTSI) is eyeing Southeast Asian countries, especially Indonesia, as priority prospects in pursuing business expansion worldwide.
The company is also optimistic of the growth potential of the Pakistan International Container Terminal (PICT), whose full-year contribution to group volume and revenue will kick in this year, according to ICTSI Asia Region head and vice president Christian Gonzalez.
“I think it’s very important that ICTSI, being an ASEAN company, does a significant amount of business in ASEAN. We have very similar cultures, we understand each other, we are economic partners,” Gonzalez, who is concurrent general manager of Manila International Container Terminal, told PortCalls in an interview.
“Indonesia is very interesting,” he said. As it is, ICTSI already has operations in that country. Through its subsidiary ICTSI Far East Ltd., it owns PT PBM Olah Jasa Prima Tbk, which operates four berths at Terminal III in the Port of Tanjung Priok in Jakarta. The group also provides cargo handling services at the Makassar Container Terminal in the Port of Makassar in South Sulawesi.
Gonzalez cited Indonesia, an archipelago comprising 17,508 islands, as having numerous opportunities that “maybe some people have overlooked”. He said the country has a very strong economy with a massive and young population, which implies strong consumption.
“I think in the next 10-15 years, if we don’t do proper homework, we’ll regret not getting in there early,” Gonzalez said.
It was also the large, well-educated population and strong balance of trade of Pakistan that attracted ICTSI to the South Asian country of 193.23 million people.
ICTSI added the PICT to its portfolio through offshore subsidiary ICTSI Mauritius Ltd., which bought 35% of the shares of stock of the Pakistan terminal in March 2012, then launched a takeover of the facility at the Karachi Exchange last August. By the end of 2012, ICTSI Mauritius owned 63.59% of PICT, which has a contract with the Karachi Port Trust to develop, operate and manage the 750,000-TEU annual capacity terminal at the Port of Karachi for 21 years.
“I think long term (Pakistan) is a very attractive country. Again, very smart population, large population, very well-educated population,” Gonzalez said. “Very strong exports of textiles, a lot of agricultural products, cotton, cement; very healthy flow of trade, strong imports, strong exports.”
Pakistan’s exports last year were estimated to be worth $24.66 billion, and its imports, $40.82 billion.
ICTSI continues to look elsewhere in the ASEAN region for acquisition opportunities. At the company’s annual stockholders’ meeting in April this year, chairman and president Enrique K. Razon, Jr. said the group has its sights on Vietnam, Cambodia and Myanmar.
ICTSI is looking at Cambodia because “they’ve never really opened up to privatization, so that’s of interest,” Gonzalez said.
The group’s interest in Vietnam “is outside of the traditional economic centers like Ho Chi Minh.” ICTSI is eyeing places that have been neglected “where we can make a big impact from an operational point of view.”
As for Myanmar, which opened its doors recently to the world, Gonzalez said there is “strong growth opportunity for anybody that gets in. But again it depends.”
He said if an opportunity to run a terminal opens up in the second-largest country in Asia, ICTSI will grab it. But Gonzalez said “we will not break the bank” searching for it.