ICTSI acquires Indonesian port operator for $5.6M

International Container Terminal Services Inc. (ICTSI) has acquired Indonesian port operator PT Makassar Terminal Services Inc. for $5.6 million, boosting its strategy of rebuilding its foreign port operations.

ICTSI sold seven of its overseas port operations in 2001 to raise funds to settle debts, and it is now trying to further expand its presence overseas to boost profitability.

In a disclosure to the Philippine Stock Exchange, ICTSI said the purchase of 95 percent of Makassar was made through Singaporean special purpose holding company ICTSI Far East Pte. Ltd. (IFEPL).

The shares were purchased from Portek Systems & Equipment Pte. Ltd. and PT Pelayaran Nusantara Meratus, although they retained five percent of their holdings in Makassar.

IFPEL also advanced funds to Makassar to allow the latter to pay certain obligations.

Makassar is the principal port in the Indonesian island of Sulawesi.

Last year, it reported cargo throughput of 239,522 container twenty-foot equivalent units (TEUs).

It has a cooperation agreement with PT Pelabuhan Indonesia IV for the procurement, installation and operation of container loading and unloading equipment under a revenue sharing scheme at the Makassar Port Container Terminal in Makassar, South Sulawesi, Indonesia.

"ICTSI considers Makassar as a young container port with a big potential for growth. This company looks forward to participating in more projects in Indonesia," the port operator said in a statement.

ICTSI is eyeing three or four more projects in Eastern Europe, Latin America and the Middle East to further improve its cashflow.

The proposed ports will have a capacity of between 300,000 to one million TEUs.

It will also make additional investments in its existing port terminals abroad.

It has earmarked $26 million for the Madagascar International Container Terminal alone, $10 million to $15 million of which will be spent this year.

Funding will come from internally-generated cash.

ICTSI will not be spending much for its local operations this year as it anticipates lower volumes.

Last year, the Manila International Containter Terminal (MICT) accounted for 66 percent of consolidated volume or 1,213,109 TEUs, up slightly by less than one percent over the 2004 volume of 1,204,798 TEUs.

Last year, ICTSI reported a 17 percent jump in its net profit to P1.34 billion, 34 percent of which came from overseas operations.

ICTSI handled consolidated volume of 1,838,451 TEUs, up 2.5 percent from 2004.

Tecon Suape or TSSA in Brazil posted a record throughput of 179,473 TEUs or an increase of 26 percent as a result of investments in infrastructure, equipment and intensified marketing campaign.

The Balctic Container Terminal, on the other hand, posted a six percent growth in volume to 395,757 TEUS last year.

ICTSI has alloted $36 million for the expansion of BCT’s capacity to over 600,000 TEUs in the short-term and further to one million TEUs per annum.

The initial stages of this expansion are being financed entirely by a 10-year loan signed in 2004.