KEY POINTS:
South Port New Zealand is hoping the Government gets its policy act together on coastal shipping and is disappointed that Ports of Auckland and Port of Tauranga did not merge.
Bluff's port is too small to be a major container port and like a lot of regional ports,
the company that owns it is looking for a role as a feeder to hub ports where ever-larger container ships call.
South Port told shareholders at the annual meeting yesterday that it would struggle in 2007/08 to match 2006/7's net profit of $2.23 million, which in turn was 8.6 per cent down on the previous year.
Chairman John Harrington said the high New Zealand dollar had adversely affected some of Southland's exporters, which had a flow-on effect on the port.
However, the Bluff had handled 50,000 tonnes of cargo more than last year at 2.155 million tonnes, matching the record set in 2004.
South Port's share price had risen strongly over the past year from $1.52 at June 30 to $2.75 this month.
Harrington said growth in coastal shipping could be the key factor in South Port's future profitability, as the activity would not require significant capital expenditure.
The company awaited a government strategy paper on the issues related to coastal shipping. He said most industry players agreed that there were too many container terminals in New Zealand and that a coastal feeder network was required to the main hub ports.
He predicted that as world trade expanded, New Zealand itself could be hubbing to Australia or even further afield.
"We see the coastal shipping of containers as a solution to this service gap and will continue in our efforts to obtain such a connection," Harrington said. "The termination of discussions between Auckland and Tauranga was a disappointment to us."
The industry generally sees Otago and Auckland emerging as the two main hubs, though Tauranga and Lyttelton dispute that scenario.
The emergence of hub ports is expected to trigger a rationalisation of the port industry and its problem of over-investment in container cranes. Bluff is seen as an important strategic port because of the nearby aluminium smelter and because of current exploration activity in the Great South Basin.
Harrington said the year ahead was challenging but South Port had a reasonable spread of customers and cargoes and it was working on opportunities that could create value for shareholders.
- NZPA
