China Merchants buys control of Djibouti's Red Sea container terminal

CHINA MERCHANTS Holdings (International) has announced that it has acquired 23.5 per cent of the Port de Djibouti for US$185,000,000 that includes two-thirds of the port's Doraleh Container Terminal with Dubai's DP World owning the remaining third.

Opened in 2008, the Doraleh Container Terminal was built by DP World. With its 18-metre draft and 1,050-metre quay, it was designed to handle three million TEU a year at full build out. With annual capacity of 1.2 million TEU, the terminal can handle 10,000-TEU, and claims to be the most advanced in east Africa.

Hong Kong-listed, but Chinese state-owned China Merchants Holdings (International) is the port operations division of its mainland parent, China Merchants Group.

China Merchants is also said to be eying a 49 per cent stake in cash-strapped CMA CGM's Terminal Link, which holds assets in more than 20 container terminals at Dunkirk, Le Havre, Houston, Miami, Tanger Med and Busan.

"Djibouti, which lies at the mouth of Red Sea makes it an ideal transshipment hub for cargo in and out of East Africa, and offers long-term growth potential as the economic momentum in the proximity intensifies over time," said the company statement.

Said CMHI chairman Fu Yuning: "This acquisition, together with earlier investments in west Africa - in Lagos and Lome - strengthens the group's position in the increasingly affluent African market. It is also consistent with the group's long-term development strategy to gradually roll out its international footprint."

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