Qingdao Port is inching closer to its goal of becoming the shipping hub of northern China with a planned initial public offering (IPO) in Hong Kong, probably within this year.

The 10-square-kilometer port is also applying for government approval to turn 8 square kilometers of its area into a free trade port to help it sharpen its competitiveness.

"We are preparing the IPO, and I would prefer to list it in Hong Kong, hopefully by this year," said Chang Dechuan, chairman and president of Qingdao Port (Group) Co Ltd.

Qingdao Port is talking to international investment banking and securities firms such as UBS, Goldman Sachs and BOC International (China).

Although the scale of the IPO is not known yet, Chang said the group will have its major businesses coal, iron ore, crude oil and container handling listed. The funds raised will be injected into the four sectors, especially container handling.

China's third-largest port in container throughput, following Shanghai's Yangshan and Shenzhen's Yantian, Qingdao Port aims to become the largest shipping hub in northern China, and even Northeast Asia.

Last year, the port's handling capacity shot to 224 million tons more than twice its actual capacity of 100 million tons. The company's revenues stood at 8 billion yuan and its profits at 1.3 billion yuan.

The handling capacity will reach 260 million tons, and revenues will hit 8.2 billion yuan this year, Chang said.

Qingdao Port's container handling volume reached 7 million twenty-foot equivalent units (TEUs) last year and is expected to go up to 9 million TEUs this year and 20 million TEUs by 2010.

After roping in Weihai Port to expand its container handling capacity in December 2005, Qingdao Port is planning to enter into agreements with Rizhao Port as well.

In July 2003, the port partnered with A.P. Moller Maersk Group of Denmark, P&O of Britain and China Ocean Shipping (Group) Company with an investment of $887 million to build Qianwan container dock.

Qingdao Port's application for a free trade port is expected to be approved this year.

(China Daily 03/08/2007 page14)

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