Tauranga looks beyond timber trade

By Graeme Kennedy

Friday 18th October 2002

Port of Tauranga is achieving record growth with cargo diversification and multiport strategies aimed at reducing reliance on its traditional logging and forestry product base.

Chief executive Jon Mayson said plans put in place soon after he took over the top job five years ago were responsible for continued good results despite Tauranga missing out as a port call for P&O Nedlloyd's new 4100 20ft-equivalent unit (TEU) capacity supercarriers, which will from December use only Auckland, Napier and Port Chalmers for the direct trade to the US and Europe.

Wellington and Lyttelton also tendered with Tauranga for the services but Mr Mayson said the company was "always pragmatic" about its chances of getting the big ships.

"We made no additional investment in the hope we would get the extra services and showed we could handle them when two called early in the year as part of the evaluation process," he said.

"We already have the big cranes and tugs these ships need and we told P&O we would not be spending a lot of capital on a wing and a prayer. The services we have hubbing through Singapore are adequate and we are well-positioned for distribution throughout New Zealand. Unlike other ports affected by the decision on the big ships, we have not lost any existing vessel calls or cargo volumes it is business as usual at Tauranga."

P&O Nedlloyd New Zealand managing director Tony Gibson said the ships the world's biggest refrigerated vessels with 1300 reefer plugs would make fixed-day calls to enable guaranteed weekly deliveries in northern hemisphere markets.

"The choice of Auckland, Napier and Port Chalmers was no reflection on Tauranga, Wellington and Lyttelton," he said. "There was a commercial necessity where three ports had to miss out and a complex evaluation was undertaken in which we looked at each port's ability to handle our operational expectations. We are continuing to make calls with other services at the three ports that missed out, which would not be the case if we had concerns about their abilities."

Mr Mayson said the company adopted its multiport strategy to move outside Tauranga for new cargoes and opened the country's first inland port, Metroport in South Auckland, two years ago.

It acquired Owens Services BOP last year to operate log marshalling and inventory systems, materials handling and cargo packing in 10 ports, and at the weekend officially opened Northport, Tauranga's $65 million deepwater joint venture with Northland Port Corporation.

Mr Mayson said Northport, which received its first vessel in June, had already become New Zealand's second-biggest forestry products export port and was handling dairy, meat and other cargoes.

"We realised several years ago that we had to diversify away from logs," he said. "In Tauranga, forestry volumes are starting to plateau as most forests that feed the area are now at sustainable yield levels and mills in the region are at capacity. In 1997, Tauranga was doing about 65,000 TEUs and last year handled a record 322,500 with a total 12 million tonnes of cargo."

Port chairman Fraser McKenzie said a key factor in the company's performance a record 15.6% profit lift to $25.9 million on revenues up 43.8% to $110.3 million was cargo diversification.

Log shipments, 40% of business five years ago, were now 29% and forestry products including sawn timber, pulp and wood panels had dropped 9% to 50% while dairy was up from 3% to 7% and general cargo from 7% to 14%.

Mr Mayson said diversification was an on-going strategy in a year of consolidation.

Comments from our readers

No comments yet