ICTSI sets bulk of $38-M capex for foreign ports’ expansion

Port operator International Container Terminal Services Inc. (ICTSI) has earmarked as much as $38 million for its capital expenditures this year, mostly for the expansion of the Baltic Container Terminal (BCT) in Gdynia, Poland.

ICTSI chairman and president Enrique Razon told reporters after the company’s stockholders meeting yesterday that $16 million of the programmed capital budget will be used to expand BCT’s annual capacity to the 700,000 TEU (twenty-foot equivalent units) mark, from the current 350,000 to 400,000 TEU range.

Razon said ICTSI intends to expand BCT’s capacity continuously over the next five years with a program that will entail an investment of $80 million over the period.

Another $12 million has been set aside for the improvement of the productivity levels at the Suape Container Terminal in Brazil.

Razon said the balance of $10 million might be used to beef up ICTSI’s safety and security system to comply with the US’ Container Security Initiative.

He added that the company is looking at possible port projects in Eastern Europe, Africa and the Middle East.

Despite the continued slump in the global economy, mainly an offshoot of terrorist threats and the outbreak of the deadly SARS (severe acute respiratory syndrome) epidemic, ICTSI managed to perform well in the first quarter this year.

Razon, however, declined to give more details on their first quarter results as they have yet to finalize their financial report to be submitted to securities regulators. For the first quarter last year, however, ICTSI posted a net income of P102 million.

ICTSI is eyeing over half a billion dollars in revenues over the 20-year lease period of the BCT.

ICTSI has had 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 (MICT) handles in excess of one million TEUs per annum.

The company is reviving its international expansion after having disposed of foreign unit ICTSI International Holdings Corp. (IIHC) to the Hutchison Group of Hong Kong.

Although ICTSI as a company has become substantially smaller with the sale of IIHC, this development has strengthened the firm’s balance sheet by providing it the much-needed funds to improve liquidity through the retirement of maturing debts.

ICTSI’s holdings in Subic and General Santos will continue to provide the company flexibility for tapping local business opportunites and for maintaining its strong foothold in the industry.

Currently, South Harbor is MICT’s only competitor in the marine international container service market in the Port of Manila. It is operated by Asian Terminals Inc.

Last year, ICTSI’s net income from recurring operations amounted to P527.5 million, a hefty increase of 52 percent from P347.7 million in 2002. The growth was driven mainly by operations at the MICT and the newly-acquired BCT.

BCT is the leading container terminal in Poland and one of the largest in the Baltic region.