DP World, a global port terminal operator based in Dubai, has officially acquired Chilean port terminal operator Puertos y Logistica S.A. (Pulogsa) after a few months of deliberation over a $502 million bid offered in January.
Pulogsa operates a long-term concession for Puerto Central (PCE) and owns and operates Puerto Lirquén (PLQ).
PCE is a multipurpose terminal at the port in San Antonio, which DP World said is “a gateway to the Chilean capital Santiago and to leading industrial, commercial and agricultural businesses.” Meanwhile, PLQ, which is also a multipurpose terminal, “is strategically positioned to benefit from the well-established pulp and lumber industry in Southern Chile, next to the country’s second-largest city and industrial Hub, Concepción,” DP World added.
The chart below, which was built using BlueWater Reporting’s Port Dashboard tool, shows that the Port of San Antonio in particular has strong global ties, with 13 liner shipping services calling the port, while two liner shipping services call the Port of Lirquén. This chart only includes liner shipping services that also sail to regions outside the west coast of South America. Both liner shipping services calling the Port of Lirquén also call Asia, while four of the 13 services calling the Port of San Antonio call Asia.
Pulogsa CEO Roberto Zilleruelo believes development at these two facilities will be potentiated with the investment of DP World. “With the support of one of the largest port operators and trade enablers in the world, we will accelerate business growth through new investments in the company and its people,” Zilleruelo said.
DP World Americas Managing Director Tiemen Meester said, “San Antonio and Concepción provide access to Chile, the most developed economy in Latin America, with attractive prospects for growth and a dynamic business environment.”
DP World now has operations at five ports on the west coast of South America: Posorja in Ecuador, Callao and Paita in Peru and San Antonio and Lirquén in Chile. These ports will provide DP World with vast growth potential as all three South American countries continue to develop.
Of the three countries, Chile is by far the most developed economy, with a GDP per capita of $24,122 according to the Organization for Economic Cooperation and Development (OECD). Chile is the only South American country with membership in the OECD, which gives it an advantage in networking and investment over its neighboring peers.
The Chilean economy is dependent upon its state-run mining company, Codelco, which is the largest producer of copper in the world. Copper sales produced over 50 percent of total Chilean exports in 2017 and account for more than 30 percent of the government income, according to the Central Bank of Chile. Chilean dependence on copper does increase volatility in the economy, but long-term infrastructure policies like the Belt and Road Initiative by China will help support copper demand for decades.
The constant cash flow provided by copper exports will allow Chile to develop into a consumer-based economy and will increase imports in the future. DP World potentially could look to capitalize on the increased consumption by expanding infrastructure and increasing capacity at the ports of San Antonio and Lirquén.
In the future, if DP World can successfully develop its acquisition in Chile the way it has in the past with ports like Jebel Ali, the return on investment should exceed expectations.
© 2019 BlueWater Reporting (www.BlueWaterReporting.com) Used with permission