A joint venture between PrimePort Timaru and Port of Tauranga creates the opportunity to deliver huge benefits to the community and transform trading opportunities for the South Canterbury region, says port chairman Roger Gower.
The agreement, which remains subject to local community consultation, will have far-reaching positive economic and social impacts for the region, Gower says.
Key elements of this transaction are:
• Port of Tauranga will acquire a 50% shareholding of PrimePort Timaru to become the joint venture partner with Timaru District Holdings Ltd (TDHL)
• TDHL will acquire full ownership of the investment property at the Port
• Port of Tauranga will operate the container terminal under a long term lease arrangement.
Other elements of the transaction mean that the current minority owner, Port Industry Holdings Ltd (PIHL), will sell all shares, and Port of Tauranga will buy the container terminal assets, including the cranes and forklifts.
The amount paid by Port of Tauranga for the 50% stake in PrimePort and the container assets, but excluding the investment property, will be $21.6 million.
PrimePort will still manage and operate all aspects of the Port, including breakbulk such as logs, fertiliser, fuel and all marine services. The only exception is the container terminal, which will be leased and operated by Port of Tauranga.
It is a deal that combines the capability of Port of Tauranga, New Zealand’s largest and most efficient port, with PrimePort’s strategic position and huge commercial potential in the South Island. It has the capacity to open exciting new doors to exporters, in South Canterbury and beyond and to create a paradigm shift in the way freight is moved in New Zealand.
At the same time TDHL, which is owned by the Timaru District Council, will be the 100% owner of the investment property, continue to be the joint partner in the operation of the port and derive secure income through this investment.
“This is a first step in a pathway for all central South Island exporters to connect directly with a far greater range of shipping services offered by Tauranga, enhanced by the frequency and personalised service of a local port. It is a win-win-win proposal that will deliver a huge boost to the business sector and wider community,” Gower says. “It opens possibilities for more jobs, increased trading volumes and significant growth for our port and partners.
“The port is in the prime South Island location, and it is in close proximity to the largest area of irrigated agricultural land in New Zealand, the second largest dairy processing plant in the world, and in a region that is growing almost twice as fast as the average in New Zealand.”
PrimePort chief executive Jeremy Boys said Port of Tauranga’s position as the country’s number one port hub for freight to international markets was an important part of the deal, and the alliance is entirely consistent with the strong recommendations by the NZ Shippers Council, made up of Fonterra and the country’s largest exporters.
“The joint venture creates the opportunity for coastal shipping to allow a better, more reliable route to international markets,” he says.
Boys says the new entity will aggressively pursue new business opportunities: “We believe we can attract substantial new business to PrimePort through the efficiencies and greater range of international services that this new venture provides.”
“The port has faced many challenges over recent years but we always believed in the value that was here, value which has been recognised by this alliance,” Mr Boys says. “It reflects not only Tauranga’s innovative approach to business but the long term vision by our shareholders, which we trust our community will respond to during the consultation phase.
“This venture will create opportunities for our staff, the region and represents a future that can only be described as exciting”