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HONG KONG, Dec 4 (Reuters) - Hutchison Whampoa Ltd 0013.HK, the world's biggest container terminal operator, will team up with Shenzhen Yantian Port Group to invest in a container terminal in the city's Yantian East area, despite slowing global trade in the face of the financial crisis.
Hutchison Port Holdings, a unit of Hutchison Whampoa, said it had signed a deal with Yantian Port on Thursday and preparation work for the construction would start soon.
The East Port Phase I project will cover an area of 1.38 million square metres and will develop four container berths to handle ships of up to 9,500 twenty-foot-equivalents units (TEU).
Hutchison will have 53 percent of the project and Yantian Port will own the remaining 47 percent, Wang Yongzhen, head of the general office of Yantian Port told Reuters.
No financial terms were available but analysts estimated the investment at be around HK$4.4 billion ($568 million).
Hutchison, which handled a combined throughput of 66.3 million TEU worldwide last year, has partnered with the mainland firm in the development and operation of Yantian West Port in China’s booming southern city of Shenzhen.
But slowing trade growth and increasing competition in the neighbouring terminals had seen Yantian’s container throughput fall 3 percent year-on-year to 7.9 million TEUs in the first 10 months of 2008, analysts said.
Terminals in Shenzhen, the second-busiest port on the mainland, have been expanding their market share in southern China at the expense of Hong Kong’s port as they are closer to factories in the Pearl River Delta, helping to lower transport costs.
New terminals in Shenzhen, including Da Chan Bay Terminal One developed Modern Terminals, and Guangzhou have intensified competition.
Slowing export growth due to weak demand from the United States and Europe as a result of an economic downturn deepened the woes of terminal operators, analysts said.
In order to optimise the use of resources and lower operational costs, Yantian International Container Terminal will manage East Port Pase I along with existing facilities at West Port. ($1=HK$7.751) (Additional reporting by Alison Leung; editing by Anne Marie Roantree)
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