26 Jun 2014

Port of Tauranga signs container deal

1:11 pm on 26 June 2014

Port of Tauranga has formed a 10-year freight alliance with Kotahi, a freight company owned by Fonterra and Silver Fern Farms, which it says will immediately add to earnings.

In exchange for a 1.5 percent stake in the port, Kotahi is guaranteeing it will deliver 1.8 million twenty-foot-equivalent export containers to Port of Tauranga over the decade beginning 1 August.

Port of Tauranga handled more than 848,000 containers in the year ended June 2013.

Kotahi will also take half ownership of Port of Tauranga's inland port near PrimePort Timaru in exchange for dramatically increasing export cargoes. Port of Tauranga owns half the Timaru port.

Kotahi also has an agreement with shipping line Maersk to provide up to 2.5 million containers over the same 10-year period.

Port of Tauranga chief executive Mark Cairns said the deal gave his company the certainty it needed to complete its investment in infrastructure to allow access for ships able to carry 6500 containers. The maximum sized vessel able to use the port at present is a 4500-container ship.

"I think this really does represent a step change that we've secured a ten-year deal with New Zealand's largest shipper Kotahi," Mr Cairns said.

Shares in the port rose more than 4 percent on the news.