ICTSI wins port management deal in Brazil

Razon group-led port operator International Container Terminal Services Inc. (ICTSI) has expanded its footprint in Latin America with a new deal to take over the concession at Terminal de Contêineres 1 (T1Rio) in the port of Rio de Janeiro, Brazil.

ICTSI disclosed to the Philippine Stock Exchange on Thursday its wholly owned subsidiary ICTSI Americas BV won 100 percent of the shares of Libra Terminal Rio S.A. (Libra Rio) on July 17.

Libra Rio holds the rights to operate, manage and develop container terminal T1Rio. The concession of T1Rio commenced in 1998 and was extended in 2011, which would last until 2048.

“ICTSI will assume the operational, development and other responsibilities under the current concession contract. The transfer of the facilities to ICTSI management is expected to take place after all conditions precedent and required regulatory approvals have been obtained,” the disclosure said.

The parties would still need to sign a share purchase agreement, the disclosure added.

In 2018, T1Rio had a throughput of around 135,000 TEUs (20-foot equivalent unit, which is used to measure a ship’s cargo carrying capacity) and an estimated capacity of 530,000 TEUs. It has state-of-the-art container terminal assets, including five ship-to-shore gantry cranes and an extensive range of yard handling equipment including more than 16 rubber-tired gantry cranes.

It has a total land area of 18.8 hectares and 715 meters of quay wall, with a design water depth of up to 16 meters, and thus the capability to receive the large container vessels of global shipping lines.

ICTSI, the Philippine multinational corporation with the most extensive global footprint, has been winning up to two port terminal deals every year. It now operates 32 ports across the globe and derives around 70 percent of its business from overseas operations.

The company led by tycoon Enrique Razon Jr. is particularly keen on two regions: North Africa and Latin America.

As the outlook for global container port throughput remains healthy, ICTSI expects port utilization levels to rise across most regions of the world this year. This means berths with the infrastructure to handle the largest ships will be the most highly utilized, while older berths will be underutilized.

ICTSI’s planned capital expenditure of $380 million this year is about the same as the original budget last year, although actual spending in 2018 came in at only $261.3 million due to lags in construction works. Last year’s budget was allocated for capacity expansion in Manila, Mexico, Iraq and Honduras, additional equipment and minor infrastructure works in Papua New Guinea and completion of the barge terminal in Cavite. —DORIS DUMLAO-ABADILLA