Terminal is starting point in continent

Ports operator turns in a solid performance in Nigeria, and is beginning to go into other countries

For many Chinese companies going to Africa, diving in at the deep end is the hardest thing to do. Unlike many of their Western counterparts in Africa with longer experience in operating outside their home countries, going to Africa is the first foreign foray for many Chinese companies.

But as challenging as that can be, the experience can offer tremendous dividends to those willing to take the plunge. Such is the case with Tin-can Island Container Terminal, whose presence in Africa has handed it the chance to work with partners from other countries, which in turn is helping it grow in Africa.

The company is a subsidiary of China Merchants Holdings (International) based in Hong Kong and listed on the stock exchange there in 1992. It now runs a container terminal in Lagos, the busiest port in West Africa. Its partners are the French industrial and investment holding company Bollore and a Nigerian container terminal company.

With the China-African Development Fund, China Merchants Holdings (International) bought 47.5 percent of the company from ZIM Integrated Shipping Services of Israel in 2010, and Bollore and the local partner own the rest, says Shi Haisheng, the company's director.

The world economy was doing poorly at the time and ZIM wanted to limit itself to shipping, so Tin-can Island Container Terminal took the opportunity to establish the group's first overseas company.

"More importantly, we spotted a business chance because Bollore has a solid network of operations throughout Africa," Shi says. "We figured that if we forged a partnership with them it would be highly beneficial to our business in Africa."

Tin-can Island Container Terminal now owns and operates Terminal B of the Tin-can Island port in Lagos. The terminal has a shore frontage of 770 meters and a container holding area of 240,000 square meters. It has three berths with an operating capacity of 360,000 standard containers.

China Merchants Holdings' first international collaboration was in 1993.

"So we have a strong, talented team with international management skills and experience in a multicultural working environment," Zhi says. "Now more than 98.5 percent of Tin-can Island Container Terminal's staff are Nigerian, and the only foreigners in the company are three Chinese, one French, one Belgian, one Israeli and one Indian.

"We came here to make the most of our strengths, which can be deployed in a range of conditions, from easy to very difficult. We feel comfortable working with our partners to lift the productivity at the terminal, and training local staff."

A Chinese company with these kinds of credentials is apt to be highly professional and adaptable, and Tin-can Island Container Terminal's performance over the past four years has proven that it has what it takes, Shi says.

"We came out relatively late and we couldn't amalgamate our culture with local ones as easily as companies from Western or Commonwealth countries do. But we were confident we could learn to do what we had to do based on our professionalism, even if that is incredibly difficult."

The terminal is now one of the best in Lagos, and the company has 31 percent of market share, Shi says.

When the company was sounding out business possibilities in Lagos in 2010, he says, the terminal had almost no modern equipment, and all the containers it handled had to be loaded and unloaded using cranes.

"With that lack of machinery, we were highly inefficient, so we looked at how we could draw on the strong points we had. For example, we were good at handling large-scale loading and running professional equipment, while our partners were strong in local management, and logistics and transport across Africa."

China Merchants Holdings is one of the world's largest shipping service providers. It can handle 70 million containers a year, 56 million of those on the Chinese mainland.

Drawing on its experience, it developed a strategy that was suitable for Tin-can Island Container Terminal's circumstances, Shi says.

"We didn't buy the best or the largest equipment, but the most suitable for the job. We aimed to turn this poorly performing terminal into the first modern terminal in Lagos, and we have done exactly that."

The most important machines the company bought were gantry cranes that run on wheels with tires and seven mobile cranes, which have greatly helped improve efficiency.

China Merchants Holdings is a subsidiary of China Merchants Group, which has businesses in various industries including finance, transport and real estate. In China, China Merchants Holdings specializes in harbor and shipping services throughout the country, including in major harbors such as Tianjin, Qingdao, Shanghai, Ningbo, Zhangzhou, Shenzhen and Hong Kong.

The group was a pioneer in the industry when China started its policies of opening-up and reform in the late 1970s, Shi says.

Nigeria is the hub of sea transport in West Africa, and its economy has boomed over the past few years as trade has grown.

Since China Merchants Holdings set up its company in Nigeria, its presence in Africa and elsewhere has grown.

"We opened a shipping terminal in Sri Lanka last year that is bigger than the Tin-can Island one," Shi says. "We are working on or looking at many projects, including ones in Djibouti, Tanzania and Togo."

Chinese companies working overseas need to be constantly aware of being responsible and sustainable investors, he says.

"We need to shoulder more social responsibility by training local staff, and in our case, we run a green operation. As we have done in China, we have created harbors based on the values of being environmental friendly."

lilianxing@chinadaily.com.cn

(China Daily Africa Weekly 07/11/2014 page15)