Legal Document

Cambodia’s two international ports – the Phnom Penh Autonomous Port (PPAP) and Sihanoukville Autonomous Port (SAP) – yesterday reported increases in container traffic last year, with the latter looking to go public this year in a bid to fund an expansion plan.

According to container statistics from both ports, the number of containers passing through the SAP reached 390,000 20-foot equivalent, a cargo capacity unit, up 17 per cent compared with 2014, with PPAP recording 144,800 TEUs, which was an increase of 8 per cent.

Hei Bavy, general director of the river port PPAP, said based on last year’s performance the state-owned port would look to increase its container capacity, as well as start work on its new port in Kandal’s Kien Svay district.

“We are negotiating to buy machinery and start building the port as planned and it is expected to finish by the end of 2018,” he said. “By that time our capacity will increase double from 150,000 TEUs to 300,000 TEUs,” he added.

The port, which listed on the Cambodia Securities Exchange last month, will use capital raised from the markets to kick start its expansion plans.

“Capital raised from the stock market together with profits generated will be invested in the second phase of the new port, but money from other sources will not be used,” Bavy said.

Bavy said that they were looking to expand their services to meet the growing demands of clients, as well as improve logistical services to cut transportation costs of getting containers from factories to the port.

He added that while the improvement of road infrastructure to Vietnam was a challenge for the port, they were working on quickening access to the neighbouring country, on the back of an agreement reached by the two governments on cross-border transportation in 2009. The river port handles container traffic and oil transport to Ho Chi Minh City in Vietnam.

Lou Kim Chhun, director-general of SAP, said total tonnage, around 3.7 million tonnes, had increased 8 per cent compared to 2014, with the port seeing an uptick in container and tourist ships.

“The main products leaving our ports are garments and rice, which is shipped to Europe and the US,” Kim Chhun said. “Whereas imports consist of raw materials for garment factories, construction material and machinery,” he added.

The deep sea port, Kim Chhun said, is looking to follow PPAP and list on the stock exchange by mid-2016, and will float around 15 to 25 per cent of its shares in the market.

“Listing is one way to find capital and besides that we are looking at other sources of capital as well,” Kim Chhun said.

According to Kim Chhun, there is a need for the port to increase capacity given the high demand it is facing currently, and while it will take five to six years to build a new port, once completed capacity will increase to 700,000 TEUs by 2020. If the new port is not built, he said, the current port will reach capacity in 2020.

“Our technical team has started to draw plans and we estimate it will take $80 million to build port and $50 million for the machinery,” he said.

Given that the Cambodia Securities Exchange will see the listing of two ports in a seven-month period, if SAP were to list this year, Svay Hay, CEO and president of Acleda Securities, said this will not dampen investor interest in SAP.

“Buyers always prefer to trade in various listed shares, so a new listing in the market will attract more investment,” Hay said.

He said SAP being a state-owned enterprise will be able to tap into the trust factor that the public has for such companies, and the Sihanoukville port will do well to learn from PPAP’s listing.

“New listing companies can learn by having an average price level in the market and offering dividend yields to attract investors,” Hay said.

source: http://www.phnompenhpost.com/business/positive-growth-has-ports-upbeat