The recent decline in domestic container throughput volumes at private-run port-terminal, South Asia Gateway Terminals (SAGT) may have been partly due to the recent loss of GSP+ concessions, a recent research report has suggested.
SAGT’s higher-margin domestic volumes declined by 13% YoY in September 2010 to 25,259 Twenty-foot Equivalent Units (TEUs), following a 9% YoY decline in August 2010, although both were off relatively high bases, statistics showed.
“The drop in volumes may in part be due to lower Sri Lankan apparel sector (and other affected sector) exports, resulting from the loss of GSP+ concessions in August 2010,” CT Smiths Stockbrokers Private Limited stated in its September 2010 SAGT update.
The report said domestic volumes had earlier recorded double digit YoY growths for the periods between October 2009 to May 2010 (although off relatively low bases), but fell to low single digits thereafter.
“Apparel sector exports (accounting for 41% of total Sri Lankan exports in July 2010) declined 11% YoY in July (in anticipation of the GSP+ termination in August), and it is likely that this trend has continued in August and September,” the report highlighted.
Domestic volumes year to date (from January to September 2010) at SAGT were, however, up by 17% YoY to 281, 227 million TEUs, accounting for 19% of total throughput.
SAGTs total container volumes in the month of September 2010 also fell by 2.5% YoY to 157,441 TEUs, albeit off a relatively high base of 161,450 TEUs in September 2009 (the second highest throughput recorded in 2009).
Statistics, however, showed that this was the second consecutive monthly YoY decline with August 2010 throughput declining 2.3% YoY to 159,334 TEUs, also off a high base. September 2010 throughput is also the lowest recorded in 2010 but cumulative volumes for 2010 YTD are up 16% YoY to 1,499,947 TEUs.
Meanwhile, CT Smiths report also stated that SAGT is likely to increase rates for transshipment (one way) in line with the rates of State-run rival, Sri Lanka Ports Authority’s (SLPA) as SAGT’s transshipment business is suffering from lower margins.
SLPA rack rates for tariffs are currently US$37 per TEU for transshipment (one way), and US$140 per TEU for domestic cargo operations.
SAGT’s overall market share (calculated using the latest Central Bank statistics) stood at 48% in July 2010 after peaking at 54% in February 2010.
The two largest contributors to JKH’s key transportation sector have historically been the now 42% owned associate SAGT and the fully owned marine bunkering subsidiary Lanka Marine Services (LMS).
Following the Supreme Court ruling against JKH on a Fundamental Rights Application on LMS in FY09, SAGT is currently the main contributor to JKH’s transportation sector earnings. SAGT is one of the two terminal operators at the Colombo port; the other being the government owned Jaya Container Terminal (JCT).
The Port of Colombo has a current annual capacity of approximately 4.5 million TEUs
SAGT’s higher-margin domestic volumes declined by 13% YoY in September 2010 to 25,259 Twenty-foot Equivalent Units (TEUs), following a 9% YoY decline in August 2010, although both were off relatively high bases, statistics showed.
“The drop in volumes may in part be due to lower Sri Lankan apparel sector (and other affected sector) exports, resulting from the loss of GSP+ concessions in August 2010,” CT Smiths Stockbrokers Private Limited stated in its September 2010 SAGT update.
The report said domestic volumes had earlier recorded double digit YoY growths for the periods between October 2009 to May 2010 (although off relatively low bases), but fell to low single digits thereafter.
“Apparel sector exports (accounting for 41% of total Sri Lankan exports in July 2010) declined 11% YoY in July (in anticipation of the GSP+ termination in August), and it is likely that this trend has continued in August and September,” the report highlighted.
Domestic volumes year to date (from January to September 2010) at SAGT were, however, up by 17% YoY to 281, 227 million TEUs, accounting for 19% of total throughput.
SAGTs total container volumes in the month of September 2010 also fell by 2.5% YoY to 157,441 TEUs, albeit off a relatively high base of 161,450 TEUs in September 2009 (the second highest throughput recorded in 2009).
Statistics, however, showed that this was the second consecutive monthly YoY decline with August 2010 throughput declining 2.3% YoY to 159,334 TEUs, also off a high base. September 2010 throughput is also the lowest recorded in 2010 but cumulative volumes for 2010 YTD are up 16% YoY to 1,499,947 TEUs.
Meanwhile, CT Smiths report also stated that SAGT is likely to increase rates for transshipment (one way) in line with the rates of State-run rival, Sri Lanka Ports Authority’s (SLPA) as SAGT’s transshipment business is suffering from lower margins.
SLPA rack rates for tariffs are currently US$37 per TEU for transshipment (one way), and US$140 per TEU for domestic cargo operations.
SAGT’s overall market share (calculated using the latest Central Bank statistics) stood at 48% in July 2010 after peaking at 54% in February 2010.
The two largest contributors to JKH’s key transportation sector have historically been the now 42% owned associate SAGT and the fully owned marine bunkering subsidiary Lanka Marine Services (LMS).
Following the Supreme Court ruling against JKH on a Fundamental Rights Application on LMS in FY09, SAGT is currently the main contributor to JKH’s transportation sector earnings. SAGT is one of the two terminal operators at the Colombo port; the other being the government owned Jaya Container Terminal (JCT).
The Port of Colombo has a current annual capacity of approximately 4.5 million TEUs
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