The Port of Tauranga Limited is continuing to grow its portfolio with two multi-million dollar acquisitions.
Yesterday, Port of Tauranga's chief executive Mark Cairns announced a $21.6 million strategic alliance had been formed with port company PrimePort Timaru, which he said heralded a new era for the handling of the country's cargo freight. "Port of Tauranga continues to invest in becoming New Zealand's hub port. We see opportunities to grow PrimePort Timaru as a marshalling point for South Island cargo."
He said the investment included acquiring 50 per cent shareholding in PrimePort, and a 35-year lease of the container terminal, and acquisition of the terminal's operating assets.
A new Port of Tauranga wholly owned subsidiary, Timaru Container Terminal Limited will be set up to operate the terminal and the acquisition is funded from within current bank facilities.
Mr Cairns said the strategic alliance with PrimePort would allow South Island exporters and importers to benefit from the large number of international services which call at Tauranga, and significant freight savings coming from the next generation of large ships arriving in New Zealand.
"Port of Tauranga has the financial strength, location and transport connections to be New Zealand's hub Port.
"Not only can Tauranga container terminal accommodate large ships, with our significant land holdings, we have the potential to expand at a lower cost than all other New Zealand ports," he said.
The PrimePort deal is subject to the successful outcome of Timaru District Council's month-long public consultation process which begins this week.
The alliance with PrimePort comes on the heels of Port of Tauranga Limited's purchase of the 6.8ha Gateside Industrial Park in Onehunga from Goodman Property Trust for $37.2 million.
Mr Cairns said the park acquisition was key to expanding access to and from international markets for Auckland - the unconditional sale is due to be settled in February.
The property, immediately adjacent to Port of Tauranga's inland port, MetroPort, includes three large industrial warehouses, an office building, and more than 2ha of land which is earmarked for future development.
Mr Cairns said this acquisition added to the $10 million recently spent on buying three Tauranga properties which added a further 2.28ha to the Port Authority's potential development land. It brought the company's total holdings in Tauranga to nearly 190ha and rental income from these new properties would exceed $3 million a year, he said
Port of Tauranga acting chief executive Sara Lunam said the new acquisitions were an exciting "investment in the future" and gave the company significant capacity to expand its warehousing, container packing and unpacking, and cross-docking facilities.
Ms Lunam said PrimePort was quite a small port which employs about 40 staff, and moves about one million tonnes of bulk and conventional cargo and 22,000 containers a year.
"There is a lot of opportunity to grow the business given time," she said.
PrimePort chairman Roger Gower said the Port of Tauranga alliance positions PrimePort well for the future. "We expect this alliance to hasten the consolidation of freight routes in New Zealand by facilitating a more extensive schedule of coastal shipping and rail."
Mr Gower said it would mean the development of more flexible and cost-effective routes to and from international markets for South Island exporters and importers.