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Port of Tauranga [NZX: POT] will bolster annual container volumes by 8 percent to 10 percent after its deal with the Fonterra Co-operative Group [NZX: FCG] and Silver Fern Farms-led logistics company Kotahi led to it winning a slot in Maersk's Southern Star service from Ports of Auckland.
The Southern Star service is a rotation that runs between Malaysia's Tanjung Pelepas port, Singapore, Brisbane, Tauranga, Lyttelton and Port Chalmers. Based on current volumes, it will add about 70,000 TEUs (twenty foot equivalent units) a year at Tauranga, the port company said in a statement. It represents an 8.3 percent gain on the 848,384 TEUs Port of Tauranga shifted in the 2013 financial year and cements its place as New Zealand's biggest container port.
"The driver to the shift is the deal we announced with Kotahi," Port of Tauranga chief executive Mark Cairns told BusinessDesk. He was reluctant to comment further ahead of the release of the company's annual results on Aug. 21.
Kotahi said last month it had agreed to commit 2.5 million export containers to Maersk over ten years, giving the shipping company confidence to plan for the introduction of larger 6,500 TEU vessels. It will put 1.8 million TEU of export containers through Port of Tauranga over ten years, and will put significant volumes through the Timaru Container Terminal developed by Port of Tauranga over ten years.
Kotahi will take a 49.9 percent shareholding in the Timaru Container Terminal and Port of Tauranga will issue one million of its own shares to Kotahi and one million more as volume grows under the terms of the deal.
Shares of Port of Tauranga last trade at $15.50 and have climbed 154 percent in the past five years, almost twice the gains of the NZX 50 Index. The shares are rated a 'hold' based on the consensus of five analysts polled by Reuters, with a median price target of $14.62.