COSCO Shipping Ports (CSP) has bought a 60% stake in Chancay Terminal in Peru from Volcan Compania Minera S.A.A (Volcan) for US$225 million, according to a statement.
The deal, which was agreed at a signing ceremony at the World Economic Forum in Davos, Switzerland, is CSP’s first venture into South America and will see it partner with Volcan to build Chancay Terminal into an important gateway port in South America.
CSP says recent economic growth has made Peru an attractive country to invest in and Chancay Terminal’s close proximity to the capital Lima (58km) has seen it become an invaluable trade hub.
Approximately 60% of Peru’s economic activities are concentrated in Lima and the surrounding areas and from 2010 to 2017 container throughput Chancay Terminal increased from 1.5 million to 2.5 million TEU.
Credit: COSCO Shipping Ports
The new partnership between CSP and Volcan, which will involve an initial investment of $56 million, will see the construction of new multi-purpose terminals, container terminals and related infrastructure facilities.
The first phase will have four berths, two of which will be multi-purpose and two are specifically container berths with a total annual designed capacity of one million TEU.
Speaking at the ceremony, Zhang Wei, Vice Chairman and Managing Director of COSCO Shipping, said the investment was vital to the terminal operator’s future growth.
A recent Port Technology technical paper explored how geopolitics is affecting the supply chain in South America and beyond
“The investment in Chancay Terminal enabled us to further extend our reach to South America,” Wei said.
“The prospective terminal at Port of Chancay will be the Company’s first terminal in South America and should help reduce the deficiency in port infrastructure in Peru.
“With an ideal geographical location, Chancay Terminal is poised to be an important gateway port in Peru.
CSP's Qingdao Port International. Credit: COSCO Shipping Ports
“With the support from the parent company and the OCEAN Alliance, we will harness our strengths to enhance the profitability of the terminal in the future and achieve sustainable growth to maximize returns to shareholders.”
Captain Xu Lirong, Chairman of COSCO Shipping echoed those thoughts and emphasized Chancay Terminal’s importance to the economy of Latin America.
“Chancay Terminal is the first terminal project invested by Chinese companies in South America, which has received great attention and support from both Chinese and the Peruvian government. Volcan is one of the world's leading polymetallic mining companies.
“To cope with its business development, Volcan has started the research work of the construction of the terminal in the Port of Chancay many years ago.
“The cooperation will enable the two parties to fully utilize resources and leverage the capabilities to jointly develop Chancay Terminal to an important hub port in Latin America and a gateway port in the Pacific Ocean which should help promote local economic growth.”
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