Port diversity pays off

By PAM GRAHAM

Port of Tauranga is creaming it in Auckland.

It pumped 50 per cent more containers into the city than a year ago and says that figure can be doubled.

The company, which is Ports of Auckland's biggest competitor, yesterday declared a $33.64 million profit for the year to June 30, up 7.7 per cent on last year, and based on a 3.5 per cent increase in revenue.

The rise in earnings came from higher volumes, a contract to import coal and a $3.65 million gain on a land sale - and despite a 25 per cent fall in log exports.

The final dividend was increased to 13c and the total dividend to 20c.

Presenting the last profit of a decade-long chairmanship, Fraser McKenzie put the result down to the right strategy, which was to develop a container port in a region not favoured by the Government and to attract business by railing imports from Auckland.

McKenzie hands over to John Parker at October's annual meeting.

Port of Tauranga's share price has risen 17 per cent in the year to date despite a downturn in the central North Island forest sector.

A 15-year contract with Genesis Energy to import coal for the Huntly power station and a move by P&O Nedlloyd's Asia service from Auckland to Tauranga helped the port.

It is installing its fourth container crane, investing $32 million in coal-handling facilities and has spent about $3 million expanding its Metroport site at Southdown in Auckland."Metroport is now New Zealand's third-largest container port in its own right and a vital part of Port of Tauranga's strategy," McKenzie said.

Chief executive Jon Mayson said the port could "double what we are doing in Auckland" if rail company Toll NZ co-operated. The port wants trains carrying 80 containers, having increased capacity from 60 to 70.

He said the diversification strategy was also paying off.

"If we were just handling logs, Port of Tauranga would be looking sick."

The port admitted that customers had complained when the Asian service added volume to the rail route but those clients were now happier.

The Metroport upgrade doubled container slots, added lighting for 24-hour work and laid tracks for longer trains.

Overall, the port handled 394,403 standard-sized containers, up 44,607 on last year.

Tauranga is seen as well-placed in any industry rationalisation because of its ties with Northland's port and the Port of Marlborough. It is seeking approval for a log-handling joint venture with Toll Logistics that will extend into stevedoring.

Toll, which reports its profit today, controls the railways and runs ports in Australia.

The property boom in Tauranga has also helped the port's balance sheet. Fixed assets were revalued up by $189.2 million during the year, 82 per cent from higher land values.

"We have no reason to be pessimistic about the future," Mayson said.

The coal contract is expected to reach its target volume of one million tonnes a year this financial year.