Yangtze Ports – China Consortium investment opportunities
We recently launched the China Consortium and are now getting involved in many regions across the country and associated port and other investment opportunities.
One of those are the 6,300km long Yangtze river and the immense economic region it passes on its way from Tibet through to Shanghai, covering an estimated population of 430 million and about a quarter of the Chinese economy.
We wanted to give you the Port Investor community a taste of the many opportunities that lie in this area with a basic presentation of the markets in this region.
For more please go to:
http://www.port-investor.com/yangtze-ports/
Busy Season Mastery Simple Strategies to Optimize Your Lodging Business!.pptx
Yangtze Investment Opportunities
1. YANGTZE PORTS
INVESTMENT OPPORTUNITIES
IN ONE OF CHINA’S BIGGESTS GROWTH ENGINES
Port Investor - February 2012
By InduStreams
2. The Yangtze River – An overview
The Yangtze river
stretches about
6,300km from
Tibet to Shanghai
of which 2,600km
is navigable
The Yangtze runs through 10 provinces covering a region with a population of
430 million that contributes about 25% of China’s GDP
In 2010 more than 1.3 billion tonnes of cargo and 7.3 million TEU (containers)
were transported on the Yangtze
The combination of continuous improvement in capacity (depth and
navigability), focus on developing the Western regions and improving the
environment create strong fundamentals for continued growth in Yangtze area
3. The Lower Reach
The lower reach covers the section between
Nanjing and Shanghai, it is the main river Yangzhou
transportation channel of the Yangtze River
Delta (YRD), which is one of the most Nanjing Taizhou
Nantong
developed regions in China. Zhenjiang
YRD include the provinces of Jiangsu,
Zhejiang and Shanghai. With 130 million Zhangjiagang
Changzhou Jiangyin
people it contributes 22% of GDP and 28% of Changshu Taicang
export/import of China and is expected to
remain the key manufacturing and
export/import center of the country. Lower reach ports:
Throughput in this section is about 70% of Shanghai - Nanjing
total Yangtze throughput in terms of cargo
weight. Throughput (million tonnes in 2009)
Ocean going vessels ships can reach Nanjing 200
150
but cannot go beyond due to bridges after 100
Nanjing. 50
New developments continue to take place 0
throughout the YRD and in particular on the
north bank.
4. The Middle Reach Middle reach ports: Maanshan
Wuhan - Nanjing
The middle reach covers the section
Wuhu
between Nanjing and Yichang city, and the
economies and provinces of Tongling
Wuhan
Anhui, Jiangxi, Hunan and Hubei.
The hinterland provinces have a population Anqing
of total 223 million, contributing about 13% Jiujiang
of national GDP.
Throughput in this section is about 25% of
total Yangtze throughput In terms of cargo Middle reach ports:
weight. Yichang - Wuhan
The middle provinces are gaining weight in Wuhan
Yichang
national industry output and consumption.
Transportation via Yangtze has been Jingzhou
considered as key factor of development by
all provinces in this section. Throughput (million tonnes)
Depth varies from 3m to 9m in this section 100
allowing for vessel size of 3,000 to 5,000 50
tonnes or 100-300 TEU for container 0
Maans…
Jingzhou
Jiujiang
Yichang
Anqing
Wuhu
Yueyang
Wuhan
Tongling
shipping. Yueyang
New developments are seen in many of
ports in this section and particularly in
Wuhan.
5. The Upper Reach
The upper reach covers the section between Wanzhou
Yichang and Yibin.
Chongqing is the main port in the area but the
hinterland economy stretches far into among Chongqing
Fuling
others the Sichuan province.
A population of 110 million live in the area
with an associated economy of (GDP) $328
billion or about 6% of national GDP. Luzhou Upper reach ports:
Throughput in this section is about 5% of total Yibin
Yichang - Yibin
Yangtze throughput In terms of cargo weight.
Rapid volume growth has been seen in this
area particularly in Chongqing. Throughput (million tonnes)
The “Go West” policy and the improvement 100
of navigation condition caused by the Three 80
Gorges Dam have are playing a big role in 60
that. 40
Vessels from Chongqing port can be as big as 20
350 TEU or 5,000 tonnes. All vessels have to 0
pass the Dam to reach lower section of Chongqing Luzhou Yibin
Yangtze. Note: Chongqing data include Fuling and Wanzhou
New development are seen in many of ports
in this section and particularly in Chongqing.
6. Who might this be relevant for?
Infrastructure investment funds looking for investments with growth
potential or acquisitions
Pension and insurance funds with allocation for infrastructure in Asia or
China that have potential to provide stable cash flows
Private equity funds looking for small to medium sized investments with
high potential upsides
Seed investors looking to place early capital for potential sell off at later
stage (e.g. to a consortium)
Container, bulk, oil and other operators with interest to develop and
cooperate with local port groups and governments
Developers and contractors with ability to take on large marine
infrastructure investments
7. EXAMPLE 1 – PORT WIDE PARTNERSHIP
Investment model This purely an illustrative slide for a JV formed
with a local Port Group or Government. Most
agreements are made on a negotiated basis in
(an example) China and therefore most models are possible.
Many port areas have substantial options for
further logistics developments on the landside.
Port
X% X% Investor
Group
Land Resources
Joint Venture
+ Equity + Equity
New Logistic
Port Area
8. China Consortium and how to participate
We have cooperation with global as well as local Chinese
operators, funds, developers, port groups and many others.
As development and collaboration opportunities emerge we
involve clients that we have formalized cooperation with and (if
relevant) parties that may benefit our existing client network
for specific developments or acquisitions.
China Consortium is already in motion in several locations. If
you would like to be part of it please contact us at
contact@port-investor.com and we would be glad to discuss
your needs and relevant scope for the Chinese infrastructure
market. For more information about developing markets with
Port Investor please go to:
www.port-investor.com/marketdevelopment
10. Opportunities in the Chinese Port Sector
Massive container, dry bulk, oil and CHINA IN THE WORLD TODAY
liquids markets - representing an (a few key numbers on the Chinese economy and its Port Sector)
immense share of world throughput
1.3 >400
New segments such as bio fuel and Billion people >25% Mill. tons
others in rapid development Of world container of crude oil demand +
throughput target to further
increase oil supply
Limited competition - many ports with reserves
one controlling port group 10%
Consistent growth
Strong interest with local governments last 30 years – may
overtake the US by 11
to attract “multinationals” 2030 Of the worlds
20 biggest ports
Negotiated deals are the norm (vs open and 50+ large
tender) 10 >60% “secondary” ports
Less competition for developments Trillion USD Of world iron
PPP adjusted GDP ore demand
More deal flexibility
But tapping into this potential requires a significantly different approach than most take - it requires a new
model that engages local stakeholders in a positive way. For investors just bringing money the window of
opportunity may well have passed in China.
11. Typical challenges in securing investments
The deal pyramid illustrates a few key rules
of the marketplace:
Deal
a) The quality of the output is determined by the
1-5
input – poor market scanning and market
Lead intelligence leads to poor leads
development b) The most valuable deal leads are created pro-
10 - 50 actively through focused market engagement
Focused
c) Each deal lead requires a strong contact and
market engagement engagement base to develop into an actual
100 - 500 investment
Market scanning and d) Only a few of the potential market targets will
intelligence end up as deals - without a substantial
1,000 – 5,000 pipeline no investments or deals
Many believe they can avoid building the pyramid – it’s an
illusion, the deals you get access to are only as good as your
pipeline.
12. Challenges in the Chinese Port Sector
Many Chinese constituents like building on
partnerships – one deal can lead to a
larger number of leads and deals
Deal
With the blessing of local partners and
government, deals can be cut quickly
Once into a stage of exploration of Lead
cooperation there is often presumed
exclusivity for a period development Actual leads eventuate from close
dialogue and relation development –
Any real engagement requires local often very unstructured
Focused
relations and a real proposition to both
government and port market engagement Multitude of local stakeholders
including local government and port
Local presence required for any entities – wide engagement often req.
real insight – several sources Market scanning and
often required for verification intelligence No or little market intelligence
available through desk research
13. The purpose of China Consortium
WHAT
A group of operators, investors, and
developers many of which have world
leading technology, experience and Shipping lines Asia
funding capability Port industries Latin America
Not a consortium in the traditional sense Energy and resources Middle East
– there is no forced collaboration just
collaboration opportunities in the many CARGO OWNERS PORT PARTNERS
markets and sectors
WHY
Combined leverage makes it possible to CONSORTIUM
create much more clout in the local
markets
Complementary skill-sets from major port DEVELOPERS INVESTORS OPERATORS
infrastructure fields that will allow
synergies as each seek to develop in the Free Zone Pension Fund Container
market Marine Infra. Private Equity Oil & Liquid
We have been active in the Chinese port Dry Bulk
Construction Sovereign Fund
market for nearly a decade – the market
and its constituents are well suited to
engage with this form of “consortium”
15. How can we help you… All constituents have different needs as concerns
the target locations and the type of investments.
These are just a small handful of examples.
…relevant scope (1)
Bulk Financial investor Singapore Dampier Corpus Christi London Southampton
Shanghai Hamburg Gladstone Bergen Wilhelmshaven
Container Rotterdam New York Primorsk Taichung Calais
$10+ million Operator Tianjin
Ningbo
Nantong
Vancouver
Bremen
Long Beach
Bombay
Barcelona
Baltimore
Forth Ports
Guangzhou Yantai Corpus Christ Sao Sebastiao Bilbao
Qingdao Nanjing Algeciras Lake Charles Pittsburgh
Greenfield Brownfield Hong Kong Kitakyushu Pohang Trieste Yanbu
Qinhuangdao Tangshan New Orleans Texas City Karachi
Dalian Itaqui Grimsby Baton Rouge New Mangalore
Developer Majority Busan
Nagoya
lianyungang
Tubarao
Beaumont
Huntington
Saldanha Bay
Paradip
Tampa
Milford Haven
Shenzhen Marseilles Constantza Jeddah Odessa
South Louisiana Newcastle Mobile Tees Leghorn
Acquisition Oil & Liquid Houston Kobe Hampton Roads Manila Paranagua
Antwerp Amsterdam Ports St. Petersburg Alexandria Paulsboro
Ulsan Osaka Valencia Taranto Tarragona
Chiba Tanjung Pelepas Plaquemines Gothenburg Valdez
Logistic Zone $100+ million Port Hedland Sepetiba Dunkirk Tampa Texas City
Port Kelang Richards Bay Madras Jubail Liverpool
Rizhao Hay Point Jawaharlal Nehru Tanjung Priok Savannah
Yingkou Novorossisk Los Angeles Zeebrugge Brisbane
Seed investor Free Zone Kaohsiung
Inchon
Tokyo
Santos
Genoa
Calcutta
Mormugao
Durban
Lubeck
Pascagoula
Yokohama Le Havre Izmit Duluth-Superior Angra dos Reis
Minority $1+ billion
16. How can we help you… Each constituent have different needs as
concerns the deal pyramid. Some look for
solutions all the way from market intelligence to
…relevant scope (2) closing actual deals, others only up to and
including engagement of the relevant authorities
and potential partners.
Step 4
Deal Closing the deal
1-5
Lead Step 3
development Deal development
10-20
Step 2 Focused
Engage the most relevant market engagement
50-100
Step 1 Market intelligence
Focus among the many and scanning
1,000-5,000
18. InduStreams was founded in 2011 with a mission to create a more transparent, connected
and informed infrastructure market place.
We launched Port-Investor.com in July 2011, a specific sector pilot with focus on port
investing and the global port industry.
Current state of affairs
200+ port groups and 1,000+ executives and decision makers in the network and increasing
China Port Investor and other regions are being launched
Specific concepts in development with select investors and port groups
The Vision
Connecting all substantial port markets (5,000+ globally) with investors (1,000+ globally)
Creating a transparent and informed market place driven by industry leaders and experts
Unleashing the potential inherent in this sector by creating thousands of new investment
opportunities (we expect investment potential to exceed $1 trillion)
Want to know more or simply engage…
…contact us on:
contact@port-investor.com