Lyttelton Port seeks labour flexibility to lure super ships

By Chris Hutching

Friday 22nd February 2002

Lyttelton Port Co (LPC) is prepared to accept "short-term" costs in an effort to negotiate flexible labour options with waterside unions so it can service the new generation of P&O Nedlloyd super container ships.

Managing director David Viles said the rival South Island ports of Timaru and Port Chalmers had more flexible labour arrangements and he warned there may be a short-term hit on profit from union negotiations. He declined to say whether the cost would be caused by industrial strife or additional payments.

"Ultimately any changes will benefit the Canterbury region, its businesses and in the long run our employees' security," Mr Viles said.

The extent of depredations from rival port companies is difficult to quantify because of the lift in exports being experienced in all provincial centres. LPC's latest half-year result looked pretty healthy. Earnings before interest and tax were $12.4 million, an 18% increase on the previous corresponding period. Net profit after tax was $7.8 million, up 19%.

Mr Viles said the company wanted labour flexibility before it put proposals to P&O Nedlloyd next month to service the new super ships that take 4100 20ft equivalent units compared with the standard 2700 TEU containers.

P&O Nedlloyd recently sent its latest super ship, Remuera, to Auckland, Timaru and Port Chalmers to drop off new 4100 TEUs (NBR, Feb 15) and LPC executives are determined to become part of the proposed schedule.

There were 739 ship calls at Lyttelton compared with 711 in the recent half-year to December 2001. The port handled 61,200 TEUs, compared with 58,000 in the previous half-year. Container revenue was flat because of pricing pressure from customers.

Bulk fuel volumes increased 6% to 499,300 tonnes while coal volumes fell 3% to 844,300 tonnes.

LPC has been negotiating with Solid Energy for a long-term coal contract. Mr Viles was confident about projections for coal trade for the balance of the financial year.

The company will pay an interim dividend of 3.75c a share, an increase of 7%.

It has proved a big earner for its 66% shareholder, Christchurch City Council, in recent years.

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