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Tauranga tries new strategies

By Graeme Kennedy

Friday 5th September 2003

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Port of Tauranga is continuing to diversify into new business areas to maintain growth as its traditional core log and forestry product business begins to ease.

Increasing container volumes driven largely by the company's innovative South Auckland Metroport and a 10 million-tonne coal importing deal with Genesis Power are expected to maintain momentum as the exchange rate and lower commodity prices cool timber exports.

Revenue will also come from Tauranga's 50-50 joint venture with Northland Port Corporation to establish a deepwater port at Marsden Point and North Tugz ­ a joint venture with Ports of Auckland to provide shipping services at Whangarei.

Tauranga owns Owens Cargo Company, which provides log marshalling, container packing and general cargo handling around New Zealand and provides advice and expertise under a management services contract to Port of Marlborough.

"We recognised that the logs and forestry products bubble would burst and its growth would level out so we adopted the diversification strategies to tap into other areas," CEO Jon Mayson said.

"We had record log volumes of almost four million tonnes last year but we believe it will now taper off.

"Container traffic rose 8.5% to almost 350,000 TEUs (20ft equivalent units) with Metroport's contribution increasing 26% to 60,000 and the coal contract with Genesis will mean a million tonnes annually for the next 10 years."

Mr Mayson said Tauranga, the country's biggest export port with 65% of cargoes outbound, would see a levelling between imports and exports when log traffic dropped and coal began coming in next year.

The port handled more than 12 million tonnes of cargo last year, increasing revenues 32% to $146 million and profits by 12% to a record $29 million.

The Australian Productivity Commission this year awarded Tauranga's Sulphur Point container terminal its top accolade, rating it for delivering higher productivity at lower prices than Australian ports.

Port chairman Fraser McKenzie said business this year would be affected by the weaker log export markets and the company would continue to lift operating efficiencies while keeping costs under control.

"Offsetting this will be the benefits from the levels of new business management has been able to secure, diversification of cargoes and investment in ventures such as Owens and Northport," he said.

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