According to BMI's forecasts, container throughput at the Colombian port of Cartagena, the largest in the Latin American country in terms of both box and total tonnage throughput, will see growth in both its container and tonnage throughputs in 2014. This will mark a change from 2013, when the port's throughput suffered a decline for the first time since 2009, as Colombia was hit by the ripples of the global economic crisis.
In 2014, we forecast that gross tonnage throughput at Cartagena will grow by 6.9%. This would mark a return to growth following the 7.1% decline in volumes seen in 2013. The port of Cartagena handles mainly liquid bulk (in the form of crude oil), dry bulk and containers. We believe that growth in the port's tonnage volumes will come from a variety of sources, especially commodities exports. Oil exports should continue to provide the bulk of export revenues as Colombia ramps up production. Coal exports have remained steady, although we outline some risks to this. BMI's Mining team expects the US, which currently sources 75% of its coal imports from Colombia, to become a significant coal exporter by 2015, suggesting that Colombia will have to find new markets for its coal exports if it is to avoid losing out.
Box throughput also declined in 2013, falling by a similar 7.9%. For both boxes and gross tonnage, however, it should be noted that 2013's decline followed three years of extraordinary growth from 2010 to 2012, when gross tonnage expanded by an average 24.3% a year, while containers grew by an average 33.9%. In 2014, we forecast that there will be a resounding return to growth for containers, with box throughput set to expand by 9.1%. This would see 2.03mn TEUs handled this year, recouping the volumes lost in 2013, and setting a new box throughput record for the port. Cartagena has got off to a strong start with regards to container handling - 318,169TEUs were handled in January and February, which on an annualised basis would see 1.91mn TEUs handled by year-end, but we expect this growth to strengthen somewhat through the remainder of the year.
The reason behind BMI's bullish outlook with regards to 2014 container handling at Cartagena lies in our macroeconomic forecasts for Colombia; we currently forecast real GDP growth of 4.6%, and that real private final consumption growth, a key driver of growth in box volumes, will also expand by 4.6%, strengthening to 4.8% and 5.3% by 2016.
|Healthy Growth Over Medium Term|
|Colombia - Real GDP Growth, % y-o-y|
The Sociedad Portuaria Regional de Cartagena (SPRC) and Terminal de Contenedores de Cartagena (Contecar) are set to invest USD1bn expanding the capacity of Contecar and SPRC terminal to 5.2mn containers at the port of Cartagena. An additional USD60mn will also be invested in the access channel to the port, to provide improved access. Plans involve bringing the terminals to a depth of 16.5m and extending the springs to meet container ships above 170 tons. Contecar and SPRC are also building a port in Gamarra, Cesar, which entails an investment of USD50mn.
In November 2013, an agreement was struck to expand the access channel for the port of Cartagena at a cost of USD60mn. The hope is that Cartagena's proximity to the Panama Canal will present new business opportunities once its expansion is complete and larger ships begin to pass through it. The newly expanded canal will allow access to Post-Panamax vessels of 12,500TEU capacity, and should increase traffic in the area considerably. Nevertheless, if Cartagena is to take advantage of this development, considerable investment will be needed in the port's draught and landside infrastructure. The port currently has a draft of 11.5m at low tide, while Post-Panamax vessels require a draft of 15m. If the port fails to implement these dredging operations in time for the completion of the canal's expansion, it is likely to lose traffic to better-prepared ports in the Caribbean.
|Return To Growth|
|Port Of Cartagena Throughput, TEUs|
Over our medium-term forecast period, from 2014 to 2018, we project that annual growth in container throughput will average 11.9% a year. This is predicated on our macroeconomic outlook for Colombia - we expect real GDP growth, and that of private consumption, to remain around the 4.5-5.0% mark over the period - and the previous performance of the port. From 2008 to 2011 the facility averaged throughput growth of 23.3%, despite a 2009 decline of 6.4% when the global economic crisis struck. In terms of total tonnage volumes, we forecast an average growth rate of 5.0%, with markets in Asia likely to become increasingly important for Colombian coal exports as the US continues to shy away from the fossil fuel.
Upside potential to the port's throughput comes from the ongoing expansion of the Panama Canal, which is due for completion in 2015.