RAZON-LED port operator International Container Terminal Services Inc. (ICTSI) said it wants to increase the capacities of its facilities in Mexico and Iraq on expectations of global trade growth in the region.
ICTSI Chairman Enrique K. Razon said they intend to raise the Iraqi port’s capacity to 1 million twenty-foot equivalent units, and about 500,000 TEUs in Mexico.
“For Mexico, we are looking at one and a half million TEUs, since we are already doing around 1 million TEUs there,” he added.
Razon said, however, the brewing trade war between the United States and China may affect the operations of its Mexican port since it handles a lot of shipments from China bound for the US.
If it becomes a full-blown trade war, China will have to seek new markets for its products, and ICTSI’s ports in other parts of the world may benefit from the possible shift.
“For 2018 we have a capex [capital expenditure] budget of $380 million mainly for continuing capacity expansion in Manila, Mexico and Iraq; completion of the Honduras expansion; equipment and infrastructure development in Papua New Guinea; and the new barge terminal in Cavite,” he said.
ICTSI issued a new $400-million senior guaranteed perpetual capital securities to fund its capex. Razon said, however, that about half of this is for the refinancing of existing debt.
“As the dust starts to settle, the race to build larger and larger ships begins anew. For us, the only way to keep up and stay relevant is to increase our efficiency and productivity—to stay ahead of the game,” he said.
“Given our ongoing expansion and modernization projects and other mechanisms in place, we will be ready to meet the demands of the new shipping era. ICTSI will continue to leverage on the gains we made over the past year as we tread with caution in search of new opportunities to become the best at what we do. We are ready,” Razon added.