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Manila South Harbor, operated by Asian Terminals, Inc

ROBUST Philippine economic growth in the first quarter that exceeded expectations boosted performance of the country’s port operators as they continued to defy uncertainties abroad to post better numbers for the period.

By March 31, the country’s gross domestic product had grown 7.8%, surpassing even China’s 7.7%, and topping other ASEAN economies, particularly Indonesia (6.0%), Thailand (5.3%), Vietnam (4.9%).

“Despite uncertainties in the US and European markets, inter-Asia trade remained robust driven mainly by the emerging economies of Southeast Asia. The same was true for the economic performance of the Philippines which outpaced its regional peers. Sound macroeconomic fundamentals, private sector and consumer spending among other market factors fuelled the growth of the economy and along with it the major industries,” Andrew Hoad, Asian Terminals, Inc (ATI) executive vice president, told PortCalls.

“Such rapid economic activities contributed to the rise in trade volume at Manila ports, the premier international shipping gateway in the country in 2012. Growth is expected to be sustained in 2013 with cautious optimism,” he said.

National Economic and Development Authority director general Arsenio Balisacan attributed the growth to “business confidence and consumer optimism”.

Industry led the growth in the major sectors, expanding 10.9%, helped by the construction sector advancing 32.5%. Heightened domestic demand lifted the local manufacturing sector 9.7%.

 

Robust business

What all these mean is robust business for transport industry and supply chain players.

ATI, which operates the Manila South Harbor, the Port of Batangas and the Port of General Santos, reported net income of P396.1 million for the first quarter, up 13.1% year-on-year, driven mainly by growth in international trade, prudent cost management and a 4.4% increase in port revenues to P1.13 billion.

For 2012,ATIhandled a total of 1.06 million TEUs of containerized cargoes and 1.2 million metric tons of general cargoes across its facilities in the country. The company said its flagship operation,ATISouth Harbor, processed 922,811 TEUs of international containerized cargoes.

ATIsaid it has begun expanding the facilities at the South Harbor in anticipation of volume growth. “ATIundertook an aggressive expansion drive in 2012 to ensure that Manila South Harbor sustains its high level of productivity and efficiency in response to the growth of the Philippine economy,” Hoad said.

“As part of this, the major sea-side developments at the terminal focused on Pier 3 where the crane rails were extended by 130 meters to facilitate 330 meters of berthing to accommodate more ships. To complement this, available areas within Manila South Harbor’s expanded port zone have been converted into additional container storage areas. Since then, 6,300 TEUs have been added with more expansion areas in the pipeline as volume further increases,” he added.

The terminal also increased its truck holding capacity by 100 more lorry slots, he said.

Aside from infrastructure, systems and process improvements through technology were implemented to further improve customer transactions and to fast-track the in- and out-flow of third-party trucks at the terminal, Hoad noted.

“Since the completion of these developments in 2012, the annual throughput capacity ofATI’s Manila South Harbor has already breached the one-million-TEU mark. All these developments are aligned withATI’s continuing strategy of growing its capacity to exceed 1.2 million TEUs in the next couple of years. These developments would further improve yard availability, terminal productivity and vessel and truck-turnaround time,” he said, adding that projects are on schedule.

ATIis earmarking P4.2 billion in capital expenditures from 2013 to 2015 to sustain Manila South Harbor’s growth drive. For this year, it is spending P1.8 billion for equipment purchases and upgrading.

ATI, he said,is constantly upgrading and acquiring more sea- and land-side equipment in response to volume growth. “For 2012, container handling equipment, prime movers with trailers and forklifts had been added toATI’s equipment fleet. By mid-2013,ATIexpects delivery of two rubber-tired gantry cranes while one quay crane will be commissioned by 2014.”

International Container Terminal Services Inc., which operates the Manila International Container Terminal (MICT), also saw bigger profits in the first quarter, as it posted gross revenue from port operations of US$209.3 million, up 20% from the comparable period. MICT is ICSTI’s flagship facility.

ICTSI handled consolidated volume of 1,496,462 TEUs for the quarter, 12% more than the 1,338,316 TEUs handled a year earlier. The group’s seven key terminals in Manila, Brazil, Poland, Madagascar, Ecuador, China and Pakistan accounted for 79% of its consolidated volume and 85% of its consolidated revenues during the period.

On the domestic front, Manila North Harbour Port Inc. (MNHPI) expects big improvements in North Harbor productivity this year as the port operator is in full swing developing the hub. In an earlier interview with PortCalls, chief executive Richard Barclay said improvements undertaken so far will allow MNHPI to substantially improve berth productivity at the country’s premier domestic port within the year.

MNHPI said ongoing works will make possible an average berthing time of 24 hours from the current 50 hours. Meanwhile, MNHPI is on track to hit its container throughput target of 941,403 TEUs this year after North Harbor handled about 200,000 TEUs in the first quarter, Barclay said.

The 2013 target is 12.55% more than the 836,385 TEUs recorded in 2012. Volume in the first quarter this year was just about the same as last year, with January-February a bit slow, but the March figure “was in the high 70s,” he said.

Volumes are seen to pick up as 2GO Group has decided to consolidate its services at North Harbor.

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