Strong H1 At Cartagena Reinforces Forecast
BMI View: BMI believes that the Colombian port of Cartagena will continue to enjoy strong growth over the medium term as it develops into a regional transhipment hub. The widening of the Panama Canal's locks, now scheduled to be completed in May 2015, will give a further boost to this, and ensure the facility's growth over the long term, provided Cartagena invests in the necessary dredging work.
The Port Authority of Cartagena has announced that in the first half of the year the port's primary container terminal, the Manga terminal, handled 697,688 twenty-foot equivalent units (TEUs). This represents an increase of 12.1% on the same period in 2011, and would appear to back up BMI's forecast that 13.0% growth in box throughput will be achieved at the port in 2012. If borne out this would see 1.91mn TEUs pass through the port, from 1.69mn TEUs in 2011.
We believe that this strong growth will be maintained over the medium term; over our forecast period, from 2013 to 2017, we project that annual throughput growth will average 11.2%. This is predicated on our macroeconomic outlook for Colombia - we expect real GDP growth to remain around the 4.6% mark over the period - and the previous performance of the port. From 2007 to 2011 the facility averaged throughput growth of 21.0%, despite a 2009 decline of 6.4% when the global economic crisis struck.
|In Need Of Dredging|
|Port of Cartagena, TEU Throughput, 2007-2017|
In order to support this growth the Manga terminal has been investing in developing its facilities. According to a recent presentation by the port authority to its shareholders, the terminal purchased and put into operation 12 cranes and 18 trucks. Further, the Manga terminal has invested US$65mn in a recently completed expansion which raised its annual box handling capacity to 1.5mn TEUs per annum.
BMI believes that the Manga terminal, and the Port of Cartagena as a whole, must invest further if it is to capitalise fully on the opportunities which are presenting themselves. International transhipment cargo at the port increased by 13.9% in H1; this was fuelled by the beginning of operations by the South Korean box carriers Hanjin Shipping and Hyundai Merchant Marine. The liners are looking ahead to when the expansion of the Panama Canal is completed, when ships of up to 12,500 TEU capacity (three times the current) will be able to pass through the canal. However, if Cartagena is to fully reap the benefits of this then the port must dredge; its draught at low tide is just 11.5 metres, which is insufficient to accommodate the larger vessels, especially not when fully loaded. If the port fails to implement 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.