The amount is on top of the $41-million payment made by ICTSI for the right to operate the BCT, one of the premier container terminals in Poland. Funding for the project will come from a combination of internal and external financing.
ICTSI expects to assume full operational control of the BCT early this month. The company aims to increase the BCT’s annual capacity to the 700,000 TEU (twenty-foot equivalent units) mark from the current 350,000-400,000 TEU range.
Commenting on the BCT acquisition, ICTSI chairman and president Enrique Razon said: "This is a market we have long wanted to be in and it is the type of market we operate best in — a gateway terminal market…We look forward to building stronger business at BCT and to making larger contribution to the positive performance of the Polish economy."
Razon said ICTSI is eyeing over $500 million in revenues over the 20-year lease period.
Thomas Falknor, ICTSI Ltd. regional senior vice-president, said investment in the terminal will begin immediately with focus on three main areas – people, IT systems, and equipment, with the latter commanding the lion’s share of investment.
"Attention to these three aspects is expected to raise performance in traditional areas of service, add value-added services for shipping lines as well as the local freight forwarding industry, and provide a massive boost to throughput capacity," Falknor said.
ICTSI has experience in operating eight terminals on five continents since it first became involved in international operations in the early 1990s. Its flagship container terminal, the Manila International Container Terminal handles in excess of one million TEUs per annum.
As presently configured, the BCT covers an area of 60 hectares, including four berths for container operations and one roll-on-roll off (ro-ro) complete with hydraulic ramp. The container stacking area can presently accommodate 11,000 TEUs, but this will see a substantial increase following the installation of new, higher density, stacking cranes, which form a key component of the plan to double throughput capacity.
The project is part of ICTSI’s efforts to revive its international expansion after having disposed off foreign unit ICTSI International Holdings Corp. (IIHC) to the Hutchison Group of Hong Kong.
Apart from Poland, ICTSI has a 30-year concession to operate the port of Suape in Brazil. It is also eyeing projects in Canada, India, Japan, Australia, and Thailand.
On the homefront, ICTSI has allotted between P370 million and P400 million for the purchase of new cargo handling equipment and the improvement of its IT (information technology) systems.
ICTSI reported a consolidated net income of P3.04 billion last year, slightly down from the P3.21 billion in 2001 as it booked a P521.8 million loss for the closure of wholly-owned subsidiary ICX Corp.
Gross revenues, however, grew 26 percent to P5.5 billion from P4.4 billion, largely due to strong sales volume growth at the MICT; revenues from a new subsidiary, Tecon Suape S.A., and a 10 percent tariff increase on vesssel and arrastre charges at the MICT.