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Monday 5 July 2010

Teesport development project starts soon

Around 250 jobs will be created in the first phase of plans for a £29m expansion of the North East’s biggest port. Teesport owner PD Ports has said it is about to start work on the £15m first stage of the plan to dramatically increase capacity at the Middlesbrough commercial port – the third biggest by volume in the country.

Teesport’s container terminal capacity will nearly double from 235,000 TEU (Twenty Foot Equivalent Unit) to 450,000 TEU in the initial part of the plan. It will then look at further phases which may take the capacity of the plant to 650,000 TEU and the total cost to £29m. But the company said the size of the expansion would depend on the extent of the growth of business and the stability of a market which has suffered recently in the global economic slowdown.

Group chief executive David Robinson also said the port was still working towards plans for a £300m deep sea container terminal to be opened in 2014, despite the project being originally planned for next year.

“We are very excited to outline the plans we have put in place over the coming months and believe this will allow us to attract a larger customer base as well as extend our reach across the North East, North West and Midlands,” he added.

“As well as creating 150 jobs as a result of the extra capacity, we also intend to tender out the building work to North East firms in order to support the local economy further.”

Once fully complete, it is estimated some 50 new jobs will be created within the terminal together with a further 200 jobs to support the overall supply chain.

This will complement the 1,300 jobs that have been directly created over the past five years as a result of portcentric logistics operations, in and around the port, which has attracted retailers including Tesco and Asda.

PD Ports hopes to use its expansion plans attract new clients that are similar in size to Tesco and Asda, which use the facility to distribute goods to their stores across the North East, as well as smaller companies.

The firm, which also serves chemicals giant Sabic, also said that it was looking to work with its supply chain to increase the distance that goods travel from its terminals from a 40- mile radius to around a 100-mile radius over the coming years.

Its owner Canadian-owned equity firm Brookfield Asset Management bumped plans for a £300m deep sea container terminal, which had been due to open next year, to 2014.

The company bought the Teesport operator for a nominal sum from struggling Australian infrastructure group Babcock & Brown in November.

In the first six months of this year the port had handled 129,000 TEU – 62% up on the same period a year ago. The first phase, which is expected to commence in November and last approximately 10 months, will focus on the reconfiguring of the existing container terminal layout.

PD Port bosses said the expansion was the first step towards reaching its goal of creating a world class deep sea terminal.

Tenders went out this week for the first phase of a building programme that will see the port install rubber tyred gantry cranes that will more than double capacity over the next three years and put Teesport alongside Felixstowe, Southampton and Liverpool as being among the UK’s premier container handling ports.

Speaking at the official unveiling of the port’s plans David Robinson said the latest expansion – its biggest single investment for more than a decade – would create the momentum needed to realise its goal.

“I firmly believe success breeds success. While we have had our hits in the last 18 months, we are determined to deliver as much as we possibly can not just for our balance sheet but for our stakeholders who want to see Tees Valley and Teesport become a model for success for the future.”

He said it would be “corporate suicide” to embark on £350m building programme in the short term.

But incremental steps to build the most extensive integrated logistics operation north of Felixstowe was bringing that day closer.

The latest investment was triggered by a spectacular hike in container volumes moving through the port over the last two years.

“Growth in 2009 was 15-16% across the port; growth this year is 62%. Set against a 2008 benchmark it’s still 60% over and above the volumes we made then,” said Mr Robinson. .

Critical to its success had been the support of major blue chip clients including Asda and Tesco, which both operate import centres at Teesport.

The focus now was on targeting the SME community within a 150m radius on the back of the Logical Link Solutions feeder service launched last year between Felixstowe and Teesport last year, which is shifting 1,000 containers a month, including product for the ASDA George warehouse at Darlington.

“We needed base cargo, so the initial target was big retailers and volume shippers. We are setting ourselves up for a mini northern gateway,” said Mr Robinson.

PDP has invested £250,000 in setting up the LLS service, which recently won what is thought to be the first Department of Transport grant awarded under its modal shift programme to a coastal feeder shipping service.

The subsidy is equivalent to £50-a-box for the first year of operation.

“The improtant word is momentum,” said Mr Robinson. “What we have now is creating momentum behind what’s happening on the containers side of the port.

“This helps build that platform. After getting to 350,000teus the logical next step would be to build more berths and deeper berths.

We are three to five years away from that project. But it’s not just about a single piece of infrastructure.

“It’s about creating a new platform and a new industry that wil give Teesside a market position for generations to come.”

Source: Dredging Today

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