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COSCO Sees Piraeus in Top Thirty by 2018

Piraeus

By Reuters 2016-09-22 19:20:20

China's biggest shipping company, COSCO Shipping, plans to ramp up container volume at Greece's biggest port in Piraeus by 35 percent by 2018, the port's new managing director, Fu Cheng Qiu, said on Thursday.

COSCO Shipping, which owns the world's fourth-largest container shipping fleet, bought 51 percent of the port's operating company last month for 280.5 million euros ($315.5 million), one of Greece's biggest and most strategic privatizations since a debt crisis began in 2009.

COSCO wants to boost the port's container traffic to five million TEUs by 2018 under its plan to turn Greece into a transhipment hub for rapidly growing trade between Asia and Eastern Europe, Fu said in his first interview since COSCO took control of the port.

"If we reach that level...Piraeus port would be among the world's 30 largest container ports," he said from his office, decorated with European Union, Chinese and Greek flags.

The planned expansion would take Piraeus to Europe's fifth-busiest container port from eighth, overtaking Spain's Algeciras and Valencia, according to data from website PortEconomics.

COSCO has been managing two of the port's cargo piers through its Greek unit, PCT, since 2009, when the debt crisis shut out the nation from debt markets and scared investors away.

The shipping group has spent millions of euros to upgrade port facilities and annual throughput has more than tripled to 3.3 million TEUs last year from 880,000 TEUs in 2010. It is projected to reach 3.7 million this year.

Piraeus has shot up world rankings of container ports to 44 last year from 93 in 2010, Fu said.

Container business accounts for more than half of Piraeus' total turnover of around 100 million euros last year.

Under the privatization deal with Greece, COSCO must conclude investments of about 300 million euros in five years before buying an additional 16 percent stake in the port.

Fu said the additional investment would be used mainly to upgrade ship repair, logistics and cruise operations, adding that a detailed business plan would be ready in November.

Greece has been struggling to kickstart its economy and reduce youth unemployment of 49 percent after seven years of austerity-induced recession.

"Through our investments (we want) to create more jobs for the benefit of the local community," he said. "A company, of course, always needs new blood...in order to be growing."

Piraeus employs about 1,100 people. Labor unions opposed the port sale, fearing job and wage cuts and worsening labor conditions.

Fu said COSCO "is very careful and very serious about these issues... and is handling them in line with the law."