Stiff Competition for Cosco Pacific in Mediterranean
Although Cosco Pacific, the Hong Kong-listed subsidiary of China’s biggest shipping company China Cosc, is expanding in the Mediterranean area after taking part in the acquisition of port in neighbouring Turkey, it faces stiff competition, reports SCMP.
Cosco Pacific is investing in Turkish ports after forming a joint venture with China Merchants Holdings International (CMHI) and CIC Capital for the acquisition of equity interests in Fina Liman and Kumport.
Its subsidiary Piraeus Container Terminal S.A., which operates Piers II and III at the Port of Piraeus, Greece’s largest port. According to data released the container handling at the two terminals have recorded a year-on-year decline in the second quarter and grew only 0.7 per cent in the first eight months, comparing to a 26 per cent increase in the same period last year.
In an early announcement, Cosco said it also expected potential business synergy between Kumport and Piraeus. The annually capacity of Kumport and Piraeus is 1.84 million twenty-foot equivalent units (teu) and 3.7 million teu respectively, and this will likely expand to 3.5 million teus and 6.2 million teus, respectively.
The incoming capacity, coupled with the acquisition of Kumport may raise concerns over internal competition. “It is never ideal from a line network optimisation perspective to operate with multiple hubs within a small geography,” Lane said. “The stability of Greece overall also needs to be considered.”
The company aims to expand its business abroad under Chinese President Xi Jinping's "One Belt, One Road" initiatives for facilitating trade.
