Kingston Wharves to start expansion in early 2014

The timing of the expansion relies heavily on global economic activity and the date for completion of the Panama Canal.

KINGSTON Wharves Limited (KWL) plans to start its port expansion in early 2014.  But it will receive new container handling equipment before this year is out.

The cargo handler, which is undertaking the expansion to make room for additional cargo after the Panama Canal expansion is complete, had raised $1.8 billion by selling a 25 per cent stake in the cargo handler to Jamaica Producers Group (JP), at the beginning of 2012, to finance the project.

The company estimates that it will cost up to US$50 million to complete, although it delayed demolishing warehouses and dredging activities, which were supposed to start early this year.

Indeed, the timing of the expansion relies heavily on global economic activity and the date for completion of the Panama Canal.

The latest reports from the Panama Canal Authority place the completion date at June 2015, after a re-evaluation and modification of the logistics and duration of the locks’ electromechanical works.

Previously, it was supposed to be finished in April 2015, while testing was scheduled to take place up to mid-2015.

The delay means that the Canal likely won’t open until late that year, or even later in early 2016.

As part of the redevelopment project, Kingston Wharves will remove and relocate some of its existing warehouses. Administrative buildings will also be moved and repositioned.

A new area for ships at the wharf will be created — the new berthing facility will be 7,969 square metres. Dredging to accommodate larger vessels at berths 5 through 6 will also take place.

The final part of the plan is to increase the cargo handler’s stowage capacity by 41,437 square metres.

In the meantime, KWL saw its revenue climbed by 18 per cent to $3.1 billion for the nine months to September 30, due mainly to depreciation of the Jamaican dollar.

Net profits jumped 50 per cent from $315 million for the comparative nine-month period last year to $474 million in the same period in 2013.

The management has been implementing measures to “review, monitor and minimise costs”, according to KWL CEO Grantley Stephenson, in a report to shareholders in the latest financial statements.

The company even had to restructure its cold storage operations and made all positions redundant at the end of August.

“The refrigeration segment of this business will continue operations,” said Stephenson. “However, the cold storage facilities have been leased to an independent third party.”

KWL expects modest growth in transhipment containers and motor units for the remainder of 2013, while the domestic business is expected to be flat.

 

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