Stake Acquired in Port Terminal Operating Company in Myanmar

Sumitomo Corporation (Head Office: Chiyoda-ku, Tokyo; Representative Director, President and Chief Executive Officer: Masayuki Hyodo) and Toyota Tsusho Corporation (Head Office: Nakamura-ku, Nagoya; President and CEO: Ichiro Kashitani; hereinafter, “Toyota Tsusho”), together with the Japan Overseas Infrastructure Investment Corporation for Transport & Urban Development (hereinafter, “JOIN”), have decided to acquire a 35% stake in Thilawa Multipurpose International Terminal Co., Ltd. (hereinafter, “TMIT”), a new local terminal operation company founded by Kamigumi Co., Ltd (hereinafter, “Kamigumi”), a major port logistics firm, for the purpose of participating in port terminal operations in Myanmar’s Thilawa Port.

The container cargo handled in Myanmar has grown rapidly over the past five years at an average of about 20% per year. The annual volume of container cargo already exceeds one million TEU (Twenty-foot Equivalent Units), and further increases in volume are expected in this market. However, Yangon Port, which handles about 90% of the country’s cargo volume, has no room for expansion because of its location next to a built-up urban area, and its shallow water depth requires vessels to wait for a suitable tide level to enter/exit the port. Ocean cargo is thus likely to be shifted to Thilawa Port, whose greater water depth allows larger ships to dock.

The terminal to be operated by TMIT is a multipurpose terminal constructed in Thilawa Port with ODA yen loans from the Japanese government (hereinafter, “the Terminal”). Kamigumi obtained operating rights from the Myanmar Port Authority (hereinafter, “MPA”) in March 2018, and the construction was completed in December 2018. The handover of the Terminal from MPA is planned in February 2019, and commercial operation will begin from April 20191.

The Terminal will be outfitted with the latest loading/unloading equipment from Japan, and Kamigumi will be employing the high-quality operational know-how it has cultivated both inside and outside Japan to run the facility. The value provided by the Terminal will be further enhanced using the networks established by Sumitomo Corporation, Toyota Tsusho, and JOIN.

Sumitomo Corporation is engaged in industrial park operations and logistics in the Thilawa district, and will provide shippers within Myanmar, including industrial park tenant companies, with greater convenience through more efficient logistics achieved via collaboration between existing businesses and the Terminal. Sumitomo Corporation in future will be actively operating other port terminals overseas to contribute to the development of local industries in other countries.

Toyota Tsusho is involved with the construction/operation of transport infrastructure at airports and ports/harbors primarily in Asia and Africa. In operating the Terminal, situated at a key location within the Greater Mekong Subregion Economic Corridor, Toyota Tsusho will be helping invigorate the economies of Myanmar and surrounding countries and promoting their development.

 

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■ Overview of terminal operation business
Site area	:	165,700m2
Pier	:	400 meters (Plots 25 & 26)
Draft	:	9 meters
Permissible vessel length/cargo tonnage	:	200 meters/20,000 DWT
Handling capacity	:	Approximately 200,000-240,000 TEU per year
Operating period	:	38 years

 

 

■ Business scheme

 

Japanese SPC shareholder composition:
Sumitomo Corporation: 36%, Toyota Tsusho: 34%, JOIN: 30%
TMIT shareholder composition:
Kamigumi: 51%, EFR Group: 14%, Japanese SPC: 35%

 

 

 

■ Location map

 

 

■ Photo
(Full view of terminal)



 

 

■Sumitomo Corporation’s  Material IssuesSumitomo Corporation Group positions “Six Material Issues to Achieve Sustainable Growth with Society” as an important factor in developing business strategies and in the decision-making process for individual businesses. Going forward, we will pursue sustainable growth by resolving these issues through our business activities. This project especially contributes to “the Development of Local Communities and Industries” and “Providing Diverse Accessibility”.

 

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