The Internationalization of Terminal Operators Resemble More a Rational Choice Approach to Internationalization

The Internationalization

of Terminal Operators Internationalization an Incremental Learning Process or a Rational Choice Approach?

MSc. Business Studies – International Management Supervisor: Dr. Johan Lindeque Second Reader: Drs. Erik Dirksen Student: Angenietje Temme Student ID: 10732128 Date: 31 August 2015

Abstract This thesis adds a contribution to the internationalization discussion, by investigating a highly competitive and global industry, terminal operators and if their internationalization resembles an incremental learning process or a rational choice approach. This thesis investigates the internationalization pattern of the three largest terminal operators by their equity throughput. Applying a multiple-case study design, data on internationalization was collected from the terminal operators’ company websites and the company websites of the individual terminals as well newspaper articles from the LexisNexis database. All terminal operators showed that their firm specific advantages where highly transferable and that they were able to recombine the location specific advantages with their firm specific advantages. And although the expansion of terminal operators did not manifest itself in a gradual expansion of FDIs into more distant location it does not preclude the experience effects. The nature of the business defines the feasible locations and therefore the internationalization of terminal operators resemble more a rational choice approach to internationalization.

Acknowledgements Writing this thesis learned me a lot. It was not only about the academic literature since the container terminal business is my working environment. This combination made it more interesting and also challenging since I had to combine a fulltime job with writing a thesis. I must admit that without the support from Johan Lindeque and his constructive feedback writing a thesis would have been an ongoing story. Thank you Johan for all that I have learned from you about doing research. Next to that I want to thank Johan that he supported me in my choice for terminal operators. I can imagine that when you don’t know the business that well it sounds a little boring. I can assure every reader that working on a container terminal is very complex and a great environment to work in. This great working environment and the support of my managers and colleagues helped me a lot finishing my thesis. Last but not least I want to thank my partner, parents and friends for their patience, help and support.

Table of Contents

1. Introduction ...... 1

2. Literature Review ...... 4

2.1 Internationalization Theory ...... 4

2.1.2. Internationalization Process ...... 4

2.1.1 Discrete Rational Choice ...... 7

2.2 Firm Specific Advantages of Global Terminal Operators ...... 9

2.2.1 Firm Specific Advantages ...... 9

2.2.2 Firm Specific Advantages of a Terminal Operator ...... 10

2.3 Transferability of a Terminal Operator’s Firm Specific Advantages ...... 12

2.4 Location Specific Advantages of a Terminal Operator ...... 13

2.5 International Experience of a Terminal Operator ...... 14

3. Methodology ...... 17

3.1 Epistemological and Ontological Considerations ...... 17

3.2 Research Design: Qualitative Multiple Case Study ...... 18

3.2.1 Quality Criteria ...... 18

3.2.2 Case Selection ...... 20

3.2 Data Collection ...... 22

3.3 Data Analysis ...... 23

4. Results ...... 26

4.1 Within-Case Analysis ...... 26

4.1.1 Stevedores: the case of the PSA International ...... 26

4.1.3 Financial holdings: the case of Dubai Ports World ...... 33

4.1.2 Maritime Shipping Companies: The case of APM Terminals ...... 42

4.2 Cross-Case Analysis ...... 51

5. Discussion ...... 58 II

6.1 Core arguments of incremental learning process vs rational choice approach ...... 58

6.2 Transferability of a Terminal Operator’s Firm Specific Advantages ...... 58

6.3 Location Specific Advantages of a Terminal Operator ...... 59

6.4 International Experience of a Terminal Operator ...... 60

6. Conclusion ...... 62

6.1 Scientific relevance and managerial implications ...... 63

6.2 Limitations and Suggestion for Future Research ...... 64

References ...... 66

Appendix 1 ...... 74

Appendix 2 ...... 86

Appendix 3 ...... 105

III

1. Introduction The internationalization of companies is a wide researched topic. Internationalization theories can provide a form of guidance to firms regarding what is important since companies are internationalizing in more different ways than ever before and often using combinations of entry and exit strategies (Axinn and Matthyssens, 2002). Leading theories on internationalization are generally based on linear conception of time. Consequently, several researcher hypothesize a logical sequential process of investment and expansion choices and identify various stages along the internalization sequences (Parola, Satta and Persico, 2013). In explaining the temporal and spatial constructs of the internationalization processes of MNEs, some scholars point out that institutional conditions have significant influence on the adoption of specific strategic decisions in any given context, so that firms sometimes undertake foreign ventures despite their lack of overseas experience (Forsgen, 2002; Rugman and Verbeke 2008). This could be argued that internationalization resembles a more rational approach as argued by Benito and Gripsrud (1992). Although there are also researchers that still hold on to the internationalization process model of Johanson and Vahlne (1977) like Shayer and Yeung (1992), Pedersen and Petersen (1998) Knight and Cavusgil, (2004), Ronen and Shenkar (1985), Erramilli (1991) and Hakanson and Ambos (2010). Although these reaserachers and others more researched the view of Johanson and Vahlne (1977) the view of Benito and Gripsrud is less issued. A few of their limitations were that they only used firms from one specific country and that their database did not include large multi-center firms. They argue that the emergence of such firms would make it even less likely that such data would support the process model of Johanson and Vahlne (1977). Next to that Benito and Gripsrud only used manufacturing and exporting firms where the arguments fits that making a foreign investment is mainly to take advantage of low labor cost and thus will not consider investments closely to Norway. Since it is argued that the expansion logic of service MNEs differs from that of manufacturing MNEs (O’Farrell, Moffat and Wood, 1995; Dicken, 1998) it could be that those differences could have inevitable implications on their internationalization. Therefore terminal operators are chosen since they are serve MNEs and have different home countries. Terminal operators are located in ports and the container port sector is an ideal setting for investigations in the service industry, due to past few decades where a profound restructuring of the port and stevedoring sector have been witnessed (Parola, Setta and Persica, 2013). This sector had a progressive international opening of local markets, a fast development of competitive paradigms, and an increase in the number of private stevedoring firms that exploit port reform opportunities what in particular

transformed the container port industry (Slack, 1985; Hoyle and Charlier, 1995; Heaver, 1995). Despite of the intrinsic international scope of the container terminal business due to its role in the international seaborne trade, the sector’s liberalization, privatization and the globalization process didn’t start before the early 1990s (Peters, 2001). The transformation in the container terminal industry induced several container port operators to expand their business overseas. What made that lead players could arise who were capable of managing extensive portfolios of facilities across various nations (Cullinane and Song, 2002; Damas, 2002; Olivier, 2005). Next to the raised market leaders the transformation made it possible for these new MNEs to adopt diverse business models and growth strategies. This automatically had an impact on the temporal and spatial dimensions of the internationalization process of these new container port MNEs (Notteboom and Rodrigue, 2012; Olivier, 2005; Peters, 2001). Therefore it is interesting to study if these terminal operators internationalized though a rational choice approach or an incremental learning process, leading to the following research question: “How well does the rational choice or learning process explain the internationalization of terminal operators?” For this thesis longitudinal quantitative and qualitative data for the selected terminal operators has been collected. A multiple-case study approach was adopted in which quantitative data is collected to complement the qualitative data, like revenue, distance in kilometers and terminal capacity in twenty foot equivalent (TEUs), what is the standard of one container, through scrutinizing the annual reports of the selected cases and additional company websites and newspaper articles. Qualitative data is collected through newspaper articles and company websites for the start of their internationalization until 2014. This research attempts to increase the knowledge of and insights of the internationalization pattern of MNEs and contributes to the scientific debate of internationalization. More specifically, this thesis examines the effect of the international transferability of firm specific advantages (FSAs), the ability of recombining the location advantage with the FSAs and the influence of experience on the internationalization of MNEs. The outcome could have managerial implications for firm strategist and governance within the industry to shape future ideas and management. The findings indicate that terminal operators show that when there is a greater the degree of international transferable FSAs the terminal operator is more likely to use a rational approach for their internationalization. In all three cases their core FSA was highly transferable that resulted in large global portfolios. The availability of location specific advantages for recombining with the terminal operator FSAs was less clear. The internationalization pattern of the three terminal operators where slightly different and the institutional factors where far more 2

important than expected. Interesting finding was that PSA and DPW, both companies from developing countries, made high commitment investments though acquiring terminals in the developed world. Making high commitment investments such as acquisitions in countries where there is no experience seems odd and against the argument that the lack of knowledge of foreign markets is a critical restriction to international expansion (Johanson and Vahlne, 1977). Due to the fact that both terminal operators are from developing countries they have no knowledge of developed countries. In developed countries the institutional environment has less market imperfections and thus less risk making a high commitment investment a suitable option. The pattern revealed by the terminal operator did not show a gradual expansion of FDIs into more distant locations as Johanson and Vahlne (1977) argued. All findings of this thesis reflect a more rational choice approach to internationalization of terminal operators. Although there are small hints of an incremental learning process and this thesis does not preclude the experience effects. The argument of Benito and Gripsrud (1992) that it is the nature of the business that defines the feasible locations and that these locations are evaluated by the potential of these locations. Therefore the rational choice approach fits far more to the internationalization of terminal operators. This thesis is structured as follows. The next section reviews the literature on the key dimensions of this thesis. Internationalization theory will be discussed elaborately, making a distinction between the internationalization process model of Johanson and Vahlne (1977) and the rational choice approach of Benito and Gripsrud (1992). Making it more specific by discussing the literature within the perspective of terminal operators and deriving working propositions from that discussion. Next, the methodology section describes the research philosophy, the research design, the quality criteria and the case selection of terminal operators and how the data has been collected and analysed. The validity of the working propositions is analysed in the results and discussion sections. Finally, the conclusion section addresses the key findings, scientific relevance and the managerial implications, closing this section with the limitations of this research and suggestions for future research.

2. Literature Review This literature review is twofold starting with a theoretical background reviewing the internationalization theory, with the focus on the internationalization process by Johansson and Vahlne (1977) and the discrete rational choice view of Benito and Griprud (1992). The second part is to make these two theories more specific by applying these views on the terminal operating business. First the terminal operators will be conceptualized to give a true understanding of the business. The conceptualization will be done by theorizing about the terminal operator’s Firms Specific Advantages (FSAs) and the transferability of these FSAs from this first working proposition will be derived. Next to the FSAs the location specific advantages will be discussed followed by the second working proposition. The theoretical background will be concluded with the international experience of the terminal operator and the last working proposition. This chapter then finishes with a summary.

2.1 Internationalization Theory This section will serve as a theoretical background and will discuss the internationalization theory. The main theories that will be discussed are the internationalization process also called the Uppsala Model by Johansson and Vahlne (1977) and the Discrete Rational Choice by Benito and Gripsrud (1992). First the internationalization process will be discussed and the rational choice view will follow. The next purpose of this section is to apply these theories to the terminal operator internationalization. Out of this, a final theoretical discussion working propositions will follow.

2.1.2. Internationalization Process Vernon (1966) suggested that firms internationalize according to a logical and incremental sequence of steps, through a decision making process based on the gradual acquisition of information about foreign markets. In 1977 the concept of knowledge acquisition and learning in internationalization theories was based on the assumption of foreign market uncertainty (Johanson and Vahlne, 1977). This view has had a profound impact on overseas investment decisions and implementations in the internationalization processes and was introduced via the Uppsala Model by Johanson and Vahlne (1977). The Uppsala model suggests that there are stages of internationalization, whereby the potential benefits of exploiting Firm Specific Advantages (FSAs) (Rugman and Verbeke, 1992) abroad, need to be weighed against the risks of operating in unknown foreign environments and the costs of learning to do business there. In the view of Johanson and Vahlne (1977) the lack

of knowledge of foreign markets is a critical restriction to international expansion. They argue that market-specific knowledge and general knowledge could deeply affect a firms’ internationalization. Quin (1980) adds that the Uppsala model is based on the assumption of instrumentalism and argues that the traditional internationalization path is to invest in just a few neighbouring countries, according to a sequential and cautious process based on a ‘learning-by- doing’ approach. Later Johanson and Vahlne (1990) introduced the notion of an; “establishment chain” in their Uppsala model. In this case firms are likely to enter foreign markets with a progressively greater “psychic distance” (Davidson, 1980) and thus neighbouring markets seem to be preferred in the beginning, as geographical proximity is supposed to imply cultural proximity. Davidson (1980) found evidence that shows how firms prefer to invest in adjacent and comparable cultures predominantly in the initial stages of expansion. When the expansion is into countries that are related to the home country, the expansion is more easily manageable (Ronen and Shenkar, 1985). More recently this finding has also been confirmed by Hakanson and Ambos (2010). They suggest that managers try to reduce risk and uncertainty by investing in the markets they are linguistically, psychologically and culturally familiar with. Consequently the experience and the knowledge that comes with operating in a foreign country generates foreign venture opportunities since the company has learned from previous experiences (Johanson and Vahlne, 1990). Therefore the psychic distance has a stronger influence on firms during the early stages of international expansion. After the introduction of the Uppsala model of internationalization, several authors developed the Uppsala model and challenged both the antecedent and the constraints of the international process, addressing knowledge and experience (e.g., Shayer and Yeung, 1992; Pedersen and Petersen, 1998; Knight and Cavusgil, 2004), psychic distance (Ronen and Shenkar, 1985; Erramilli, 1991; Hakanson and Ambos, 2010), and cultural factors (Barlett and Ghoshal, 1989; Shenkar and Nyaw, 1995; Gupta, Hanges and Dorman, 2002). What has been learnt from these studies? And what is your assessment of what we have learnt? The process approach seeks to explain-and predict-two aspects of the internationalization of the firm. The first is the step-by-step fashion by which a firm's engagement in a specific country often develops. Although several stages are proposed in the literature, a typical establishment chain could begin with occasional exports, develop into regular exports through agents, followed by setting up sales subsidiaries, and end with fully- owned production facilities abroad. The second aspect is that firms are assumed to successively

enter markets at an increasing "cultural distance" from the home country, as measured by differences in language, values, political systems, etc. Thus, firms are predicted to start their internationalization by moving into those markets they can most easily understand, entering more distant markets only at a later stage (Benito and Gripsrud, 1992). Next to Johanson and Vahlne there are several authors who focus on the experience as a key determinant in explaining a firm’s internationalization strategy (e.g. Pedersen and Petersen, 1998; Forsgren, 2002; Knight and Cavusgil, 2004; Tuppura et al., 2008). Like in the study of Pedersen and Petersen (1998) where they conclude that a positive relationship exists between market knowledge and internationalization. Consequently, experience comes over time which gives another angle to internationalization. In the studies of Barkema, Bell and Pennings (1996) and later in that of Luo and Peng (1999), they argue that time-based experience is a major determinant because it impacts the organizational learning about the local background. There are also other considerations that suggest that the length of an operation in a host country influences corporate foreign growth because it mirrors the profoundness of organizational experience, which can refer to pace and path regularity should be positively correlated with time-based foreign experience (Stalk, 1988). In the study of Lin et al. (2009) where they ask themselves the question ‘how do networks and learning drive mergers and acquisitions’, they assume that firms are bounded rational players who can rely on prior experiences to be able to acquire knowledge and to respond to the institutional environment. In this view experience becomes a primary source of learning. When countries with diverse cultural and institutional environments are simultaneously entered, this can hinder the firm from gaining experience and knowledge in unfamiliar contexts. Qian et al. (2010) debates, regarding the appropriateness of a geographical diversification strategy closer to home. The studies of Rugman (2005) and Rugman and Verbeke (2008) show that there are more concentrated regional strategies rather than globally strategies and they argue that there are very few true global firms. Most of the firms are operating in the triad of Northern America, Europe and Asia. Next to the triad, Qian et al. (2010) developed a two-tier geographical diversification approach based on the notion of inter- and intra-regional diversification. The intra-regional diversification allows a firm to take advantage of the potential benefits derived from the home region similarities and spatial proximities and also the integration in regulations and policies. To elaborate on the regionalization theory goes beyond the purpose of this thesis.

2.1.1 Discrete Rational Choice Ronald Coase (1937) argued that the FDI will mainly occur in imperfect markets, because the investment decision is a make or buy decision. This means that if the market is imperfect, transactions are not able to be completed due to too high transaction cost and therefore this transaction will be internalized. Rugman (1981) adds that MNEs play an important role to overcome market imperfections and that internalization can lead to more efficiency. Hymer (1960) on the other hand recognizes that FDI is a firm-level strategy decision rather than a capital-market financial decision. Benito and Gripsrud (1992) make it a little more specific and argue that one of the reasons for internationalization is due to the cost leadership strategy firms have, meaning that the firm will move their production facilities (and thus a big part of their labour) to countries that have lower cost than in their home country. In other words firms that make a foreign investment mainly do this to take advantage of low resource costs and therefore will probably not consider countries culturally close to the home country as viable alternatives. Here a note is necessary. In times of these early studies the rise of emerging market MNEs was not yet the case and these theories from the perspective of the developed market MNEs. And thus the first investments of such firms are likely to be in distant markets. Another factor is that the institutional conditions have a significant influence on the adoption of specific strategic decisions in any given context, therefore there are firms that undertake foreign ventures despite their lack of overseas experience (Forsgren, 2002; Rugman and Verbeke, 2008). Salancik and Meindl (1984) argued that contingent and external factors could be responsible for the decision to go overseas without experience simply due to the need to react to new institutional conditions. Benito and Gripsrud (1992) base their view of the rational decision of internationalization on mainstream economic theory that is basically static and treats individual investment decisions as discrete phenomena. They use the argument of Hirsch (1976) to explain that the use of experience in economic theory is used as a cost component in terms of the cost of controlling foreign operations. Salinacik and Meindl (1984) argue that undertaking overseas investments are beneficial despite the lack of foreign experience and that this is beneficial when there are changes in the domestic or foreign market conditions is an argument of Rugman and Verbeke (2008) but also to be able to catch up with first-movers or to be the first mover (Li, 2003). Benito and Gripsrud (1992) therefore argue that the probability of investing in a particular country may not be independent of earlier location decisions due to the experience effect. The reason for that is, if this effect would be present, it should cause the next investment

to be undertaken in the same country as the previous one or in a nearby country in terms of culture. According to Benito and Gripsrud (1992) there is no general tendency to move into more distant countries as gained experience grows, since each decision is made separately. In other words if experience would be the case the internationalization of the company would only be in small steps. Benito and Gripsrud (1992) found that firms entering these distant markets are likely to invest to a larger extent via greenfield investments than for FDIs undertaken in culturally closer countries. Their explanation is that culturally distant countries, tend to be less developed countries where fewer opportunities exist to buy established companies. Mariotti et al. (2010) extend this and argue that MNEs will not agglomerate with domestic companies if they think there is a negative balance between potential inflows and outflows, this effect can be undone when the domestic company enjoys some comparative advantages. Mariotti et al. (2014) adds that the influence of core cities and industrial districts reduce an MNE’s need to maintain a local partner, although these two types of areas substitute for different aspects of a target firm’s competences. This argument also illustrates a finding of Benito and Gripsrud (1992) that the impact of distance will vary along different parts of the value chain and this distance may also create new learning opportunities for the MNE and also the importance of networks to be able to access CSAs. The agglomerative view of Mariotti (2010; 2014) can also been seen as a form of mimicking. DiMaggio and Powell (1983) argue, based on the basic assumption of the institutional theory that the adoption of mimetic behaviour is to reduce uncertainty. Lewitt and March (1988) add that firms tend to imitate the critical decisions by leading companies in the hope that such strategies will be successful or simply because they are widely legitimized. In this type of environmental context, internationalization patterns will not stop because of the lack of experience due to the pursuing and widespread dogmas aiming that firms adopt less incremental and more risky and irregular paths (Forsgren, 2002). This could be the case for the ‘late comer’ MNE who could mimic the first-movers or use another strategy of ‘jumping’ or ‘leap frogging’ the established chain to catch up. This type of catch up internationalization strategy could come in forms like inward internationalization, stage overlap, stage jump, stage repeat, stage reverse and stage compression (Li, 2003). In other words if this is the company’s strategy there will not be a ‘step by step’ learning path and the path will go wherever the company thinks is worthwhile to do business. The outward FDI of the investing company could be country specific. Dunning’s (1998) data suggest that many of the factors which explain the location of FDI, and thus the host location, may not be unique to the home country, which is

quite similar to the findings of Benito and Gripsrud (1992). Relating all of the points, this part of the review shows that the internationalization of the MNE does not manifest itself in a gradual expansion of FDIs into culturally more distant locations because it is a choice based on a cost benefit balance. Thus supporting the view that the location choice of the MNE can be seen as a discrete rational choice.

2.2 Firm Specific Advantages of Global Terminal Operators In the previous section two opposite theories of internationalization were discussed. In this section the global terminal operators will be conceptualized using the Firm Specific Advantages (FSAs) and how they affect the internationalization of these global terminal operators. After a theoretical discussion of what FSAs are and how they reflect MNE internationalization, the FSAs of the terminal operators will be conceptualized. The port operator conceptualization and the internationalization theory sections have then been integrated to allow the development of working propositions regarding the expected internationalization patterns of different types of port operators.

2.2.1 Firm Specific Advantages The early thoughts regarding Firm Specific Advantages were derived from a resource based view, with scholars like Wernerfelt, Barney and Collins. Their view is that firms consider competitive advantages as a result of a unique set of tangible and intangible resources and capabilities (Wernerfelt, 1984; Collins, 1991), to be able to create sustainable competitive advantages these resources and capabilities should be valuable, rare and inimitable (Barney, 1991). These tangible and intangible resources and capabilities could be seen as FSAs since they reflect on a firm’s capability of economizing on transaction costs as a result of the multinational coordination and control of assets (Buckly and Casson 1975; Dunning and Rugman 1985). This includes as well as the transaction costs/advantages, proprietary know- how, that are the unique assets of the firm (Rugman and Verbeke, 1992). The research of Hennart (1991) takes the costs and benefits into account when studying the corporate capabilities to develop optimal internal coordination and control mechanisms. Later, the research of Verbeke (2013) adds that the created FSAs can be either stand-alone resources and routines or a combination of activities. This can then be separated in Location Bound (LB) and Non-Location Bound (NLB) FSAs. NLB FSAs can be more easily adapted to the exploitation potential at a host location, whereas the LB FSAs should be amplified to be deployed within an entire region (Rugman and

Verbeke, 2007). To be able to benefit from the strategy, the MNE needs to be able to align their FSAs with a location-specific environment (Verbeke, 2013). The strategy also needs to take the Country-Specific Advantages (CSAs) into account. When the MNE wants to transfer its FSAs they need to be able to interact with the CSAs of the host country. These CSAs are e.g. economic, political, institutional and cultural factors or more practical labour and natural resources and will have an exogenous influence on the MNEs strategy (Rugman and Verbeke, 1992; Rugman, 2005). The benefits from a specific location may arise due to structural market imperfections raised for example by government regulations (Rugman et al. 1985) and benefits of the local opportunities that enhances the potential to economize on transaction costs by a reduction of risks (Rugman, 1990). And if the MNE makes an investment in a particular country the CSAs could be one of the pull factors to move into that country. Rugman, Verbeke and Nguyen (2011) argue that some of these CSAs that lead to international expansion are not always freely accessible by the MNE. The access to this advantage is sometimes controlled by host country actors. These host country actors can have close distribution networks preventing sales to customers or local monopolies on natural resources ownership and exploitation preventing purchasing these resources as examples for closing this access. In that case the challenge for the MNE is developing relationships with national or local governments or through networks in a form of LB FSAs with powerful local actors to open up access to the desired CSAs.

2.2.2 Firm Specific Advantages of a Terminal Operator A terminal operator is always located in a port and the importance of the port is due to the source of value creation it has for firms involved in a supply chain, like the container terminal. More generally, the impact of port activities lies on the social, environmental and economic development of the region in which the port is located (Tongzon, Chang, and Lee, 2009). Ports in this sense are of major economic and strategic importance for countries and are examples of strategic assets (Porter, 1990). They serve where the aggregation of services and activities generates benefits and socio-economic wealth as well as they facilitate imports and exports due to their ability to connect the geographical locations. Ports are a source of value creation for the firm’s involved in the process of service production and can boost the firm’s competitiveness along the entire global supply chain (Panayides and Song, 2009; Song and Parola, 2015). The first step in exploiting the firm specific advantages of a terminal operator is to categorize the different types of terminal operators. Notteboom and Rodrigue (2012) argue that a strict categorization of these terminal operators is hard to establish since many scholars have 10

different views on classifying terminal operators like Bichou and Bell (2007) who propose four types, Parola and Musso (2007) define three groups and Olivier et al. (2007) only make a distinction between two types just like Slack and Frémont (2005). The study of Notteboom and Rodrigue (2012) combine the insights of these scholars and proposes three typologies. The first typology are the Stevedores or port terminal operators that expand to diversify their revenue geographically and consider port operations as their core business. Stevedoring operations require simultaneous production and consumption that leads to the concept of “Location-Boundedness” (Parola, Satta and Persico, 2012). This unique feature is a significant determinant effecting the choice of entry strategy by the container port MNE since the production and consumption cannot be separated it means that the service cannot be exported unlike other soft-services (Mariotti and Mutinelli, 2004; Blomstermo, Sharma and Sallis, 2006). Although the terminals themselves are quite standard in their infrastructure, equipment, and operation that makes them effectively replicable in a variety of markets. Therefore stevedores expand into new markets by replicating their expertise in terminal operations via mergers and acquisitions of existing terminals or expansion by building new terminal facilities. These stevedores pursue a strategy based on organic growth, which is, at the same time the most common strategy available to container terminal operations (Notteboom and Rodrigue (2012). The second typology are the Financial holdings that own terminal operators because they are seen as an asset class and for revenue generation potential by financial interests ranging from investment banks, retirement funds to sovereign wealth funds. These terminals assets can be managed directly through a parent company but the majority of them have an indirect management approach; acquiring an asset stake and leaving the existing operator to take care of the operations. The terminal in this view has the advantage of generating economic rent and is tradable through buying and selling operations (Notteboom and Rodrigue, 2012). Notteboom and Rodrigue (2012) argue that the advantages of these type of terminals adds three values, first the intrinsic value, mostly related to real estate, infrastructure and equipment and directly relating the traffic the terminal handles to the value of the land that supports terminal operations. The thought of potential monopolistic profits, financial institutions are particularly attracted to places where a local monopoly positon is available, what is seen as the operational value. Last is the risk mitigation value. This implies that the terminals are quite standard in their infrastructure, equipment, and operation which makes them effectively replicable in a variety of markets. Also terminal assets located in different regional markets helps mitigate risks, like traffic demand fluctuations and the pricing and capacity strategies of rivals. Having a global

portfolio could also reduce the financial and political risks that are associated with it if there is only focus on one market. Lastly, are the Maritime shipping companies that are in many cases hybrid structures, formed with separate business units or sister companies that are active in liner shipping or terminal operations. These maritime shipping companies invest in port terminal facilities as a support for their business. These terminal facilities can be operated as a dedicated terminal or can be open to third shipping lines. The biggest advantage for the shipping company as well as for the terminal is that it is much easier to deal with the vessel schedule integrity (Notteboom, 2006; Vernimmen, Dullaert and Engelen, 2007). The terminal operator plays the role of being able to prioritize and synchronize the handling of vessels in terms of berthing and crane density with the shipping line services and therefore makes its berthing schedule more reliable. Another advantage is that their ‘sister(s)’ will still be their client even when other customers can reorganize their service networks or can engage in new partnerships with other carriers and that will minimize the risk of losing important clients (Slack, Comtois and Sletmo, 1996). It is even possible that because the ‘sister’ company partners up with another carrier the number of clients can even grow.

2.3 Transferability of a Terminal Operator’s Firm Specific Advantages The Uppsala model suggests that there are stages of internationalization, whereby the potential benefits of exploiting Firm Specific Advantages (FSAs) abroad, need to be weighed against the risks of operating in unknown foreign environments and the costs of learning to do business there (Johanson and Vahlne, 2006). Therefore, the global expansion of the biggest terminal operators try to sustain competitive advantages by building barriers to prevent competitors entering their domains (Notteboom and Rodrigue, 2012). These barriers increase the costs to do business at that specific location. As argued, the core of a terminal operator is easy to transfer in the way that there needs to be a port, a quay, quay cranes (not always necessary due to cranes on board the vessels) and enough water depth to host the (biggest) ships. Although this seems quite easy, the supply of investment opportunities are not endless and is constrained by institutional factors facing investors to enter in to foreign markets (Olivier et al. 2007). The differences in local institutional factors and the degree of openness of the local terminal markets might imply that some terminal operators are very visible in one market and lagging behind in another (Notteboom and Rodrigue, 2012). Because the container terminal operations require simultaneous production and consumption which is a unique feature (Parola, Satta and Persico, 2012) and affects the 12

choice of entry strategy by the container operator. Since the production and consumption cannot be separated it means that the service cannot be exported unlike other soft-services (Mariotti and Mutinelli, 2004; Blomstermo, Sharma and Sallis, 2006) and is thus a location bound FSA. Since there are three types of terminal operators that lean on horizontal or vertical integration processes or a diversification strategy, the internationalization strategy could therefore also differ per category as a result of their FSAs transferability. Therefore the following working propositions are proposed:

WP 1a: The greater the degree of international transferability of terminal operators FSAs, the more likely the internationalisation will reflect a rational choice approach.

WP 1b: The lower the degree of international transferability of terminal operators FSAs, the more likely investments will resemble an incremental learning process to internationalisation.

2.4 Location Specific Advantages of a Terminal Operator For terminal operators the country is not a specific target but the port is and thus the location of the port. One of the risks is that the Country-Specific Advantages (CSAs) are associated with locating certain activities in particular countries. For ports, their advantage is that they are a very important link in the global supply chain, so the impact of port activities lies on the social, environmental and economic development of the region in which the port is located (Tongzon, Chang, and Lee, 2009). If the importance of the port drops this has an influence on the container terminals. An important factor is the potential increase in the valuation of the terminal asset, because it is strongly related to the demand and supply profile in the region. Terminal assets are typically valuated higher when located in markets with a high growth potential and high terminal capacity utilization (Notteboom and Rodrigue, 2012). For example, this can lead to, maritime shipping lines reorganizing their service networks and engage in new partnerships (Slack, Comtois and Sletmo, 1996). Vanelslander (2008) argues that legislation often makes it impossible to enter a foreign market without establishing links with one or more local partners. Quin (1980) adds that the Uppsala model is based on the assumption of instrumentalism and argues that the traditional internationalization path is to invest in just a few neighbouring countries, according to a sequential and cautious process based on a ‘learning-by-doing’ approach. If there is an investment in a particular country the Country Specific Advantages (CSAs) could be one of the pull factors to move into that country. Rugman, Verbeke and Nguyen (2011) argue that some of these CSAs who lead to international expansion are not always freely 13

accessible by the MNE. The access to this advantage is sometimes controlled by the host country actors. Host country actors often have closed distribution networks preventing sales to customers or local monopolies on natural resources ownership and exploitation preventing purchasing these resources, this is an example of how this access is closed. In the global expansion of the biggest terminal operators, they try to sustain a competitive advantage by building barriers to prevent competitors entering their domains (Notteboom and Rodrigue, 2012). Therefore the attraction to places where a local monopoly position is available, is seen as an operational value. The following working propositions are derived from the above:

WP 2a: The greater the degree of location specific advantages available for recombining with terminal operator FSAs, the more likely investments will resemble a rational choice approach to internationalisation.

WP 2b: The lower the degree of location specific advantages available for recombining with terminal operator FSAs, the more likely investments will resemble an incremental learning process to internationalisation.

2.5 International Experience of a Terminal Operator In the view of Johanson and Vahlne (1977) the lack of knowledge of foreign markets is a critical restriction to international expansion. They argue that market-specific and general knowledge could deeply affect firms’ internationalization. Consequently the experience and the knowledge that comes with operating in a foreign country generates foreign venture opportunities since the company has learned from previous experiences (Johanson and Vahlne, 1990). The psychic distance would have therefore a stronger influence on firms during the early stages of international expansion. Since there are three types of terminal operators who pursue different strategies the background of their experiences also differs. The stevedore is the only one who cannot rely on the experience of the global strategy of their mother company or in the case of the maritime shipping type lean on the experience of their sister company. Although if there was a lack of foreign experience in the beginning Salinacik and Meindl (1984) argue that undertaking overseas investments are beneficial and that this is beneficial when there are changes in domestic or foreign market conditions (Rugman and Verbeke, 2008). Benito and Gripsrud (1992) argue that there is no general tendency to move into more distant countries as gained experience grows, since each decision is made separately. Therefore they argue that the probability of investing in a particular country may not be independent of earlier location 14

decisions due to the experience effect.

WP3: The greater the international experience of a port operator, the more likely investments will resemble a rational choice approach to internationalisation.

This literature review has aimed to give insights regarding the two opposite theories of firm internationalization, namely internationalization as an incremental learning process or better known as the Uppsala model or that internationalization is based on a rational choice approach. The Uppsala model is found by Johanson and Valhne in 1977 and is critiqued by Benito and Gripsrud (1992). The foundation of the Uppsala model is that the lack of knowledge of foreign markets is a critical restriction to international expansion. Johanson and Vahlne (1977, 1990) argue that market-specific and general knowledge could deeply affect a firms’ internationalization. The Uppsala model suggests that there are stages of internationalization, whereby the potential benefits of exploiting Firm Specific Advantages (FSAs) abroad (Rugman and Verbeke, 1992), need to be weighed against the risks of operating in unknown foreign environments and the costs of learning to do business there. Whereas the rational choice approach is based on economic theories. Benito and Gipsrud (1992) argue that one of the reasons for internationalization is due to the cost leadership strategy firms have, meaning that the firm will move their production facilities (and thus a big part of their labour) to countries that have lower cost than in their home country. In other words firms that make a foreign investment mainly do this to take advantage of low resource costs and therefore will probably not consider countries culturally close to the home country as viable alternatives. Here a note is necessary. In times of these early studies the rise of emerging market MNEs was not yet the case and these theories from the perspective of the developed market MNEs. And thus the first investments of such firms are likely to be in distant markets. To get a better understanding about these two theories they are viewed from a terminal operator perspective. Terminal operators can be divided in three categories. The first are the stevedores who have port operations as their core business and invest in container terminals for expansion and diversification. The second are the maritime shipping companies who invest in container terminals as a support function of their business. The last are the financial corporations (maritime shipping companies) who have container terminals for valuation and revenue generation.

The terminal operator conceptualization and the internationalization theory sections are integrated to allow the development of working propositions regarding the expected internationalization patterns of different types of terminal operators. These working propositions are based on how the terminal operator is expected to cope with internationalizing their Firm Specific Advantages (FSAs), their ability to recombine their FSAs with the Location Specific Advantages (LSAs) and if the experience of the terminal operator will show a incremental learning process or a rational choice approach for its internationalization. In the next chapter, the methodology chapter, the research method will be explained, what the cases are and how these three variables (FSAs, LSAs and experience) can be measured.

3. Methodology This chapter will give a description of the study’s methodology. The arguments for using this methodology will be reflected in four sections. First, the research philosophy will be discussed. Second, the research design will be viewed based on the quality criteria and the case selection. Next a description of the cases in this thesis will be given and this chapter ends with a discussion of the types of data collected in this study, the sources of the data and the analytical strategy used to analyse the data.

3.1 Epistemological and Ontological Considerations Each research design rests on the epistemological and ontological foundations (Brannick and Coghlan, 2007). The epistemology concerns the question of what is (or should be) regarded as acceptable knowledge in a discipline (Bryman and Bell, 2011). One of the core thoughts is that of the post-positivist epistemology that reinforces the idea that the reality cannot be known in its totality, but only probalistically (Gephart, 2004). Post-positivists focus on the creation of new knowledge and extension of established theories (Ryan, 2006). Bryman and Bell (2011) argue that this positivism orientation is fundamental for quantitative studies and for a qualitative study like a case study the interpretivism is more suitable. This strategy is predicated upon the view that a strategy is required to respect the differences between people and the objects of the natural sciences and therefore requires the social scientist to grasp the subjective meaning of social action (Bryman and Bell, 2011). In contrary a case study can be post-positivist in nature due to the fact that the researcher seeks for generalization of the results to existing theory to understand the phenomenon studied (Einsenhardt, 1989; Yin, 2003). In this thesis the literature review has drawn on existing theoretical concepts of the two theories and their supporters from which proposition have been developed that will be linked to the qualitative results, reflecting the post-positivist philosophy (Eisenhardt, 1989) Questions of social ontology are concerned with the nature of social entities. According to Bryman and Bell (2011) the central point of orientation is that social entities can and should be considered objective entities that have a reality external to social actors, or whether they can and should be considered social constructions built up from the perceptions an actions of social actors. In their view the first part should refer to objectivism and the second to constructionism or subjectivism. The objective ontology argues that an independent researcher examines the reality as it is, without altering it (Brannick & Coghlan, 2007). It implies that social phenomena studied, confront us as external facts that are beyond our reach or influence (Bryman and Bell, 2011). Whereas the counterpart is argued that the reality is an output of a human cognitive 17

process (Branninck & Coglan, 2007). Bryman and Bell (2011) called this constructionism and see this type of ontology in relation to the nature of knowledge of the social world that is being incorporated into notions of constructionism. Therefore is this type related to social objects and categories and thus can be viewed as socially constructed and are in a constant state of revision. Derived from the above, it comes down that there is an objective reality which is observable by the researcher (Saunders et al., 2011), and the aim of this thesis is to seek for generalization of the results to existing theory. Therefore this thesis takes a post-positivist approach.

3.2 Research Design: Qualitative Multiple Case Study For this thesis a case study design has been applied, this is a research strategy which focuses on understanding the dynamics present within single settings (Eisenhardt, 1989). A case study can be based on either a single or multiple cases, and on numerous levels of analysis (Yin, 1984). In this thesis multiple case studies have been used to examine a contemporary phenomenon within a real life context (Yin, 1994; Yin, 2003). Since the research question is a “how” question, next to the case study design also an experiment could be considered (Yin, 2003), because the question reflects a container terminal as the contemporary phenomenon. Therefore the case study design is far more suited to this study. As a qualitative case study has a more explanatory nature and therefore allows a better understanding of the realities and complexities that surround the object of study (Bryman, 2012). Another argument is that of Eisenhardt (1989) who argues that case studies allow the researcher to discover patterns and to generate new theory. Before explaining the selected cases, the foundation from where these cases have been built on need to be explained via the quality criteria for this research design. The next sections will give an additional insight into why the qualitative multiple case study is most suited for the research question: “How well does the rational choice or learning process explain the internationalization of terminal operators?”

3.2.1 Quality Criteria To make a study with high quality is has to be reliable, replicable and valid. In the next sections this thesis will be viewed by these criteria.

Construct Validity Construct validity also referred to measurement validity is essentially about if the measure that is devised of a concept really does reflect the concept that it is supposed to be 18

denoting (Bryman and Bell, 2011). In other words it refers to the accurate measurement of the objects of the study. This is achieved via the use of data triangulation. Data triangulation addresses multiple sources of evidence and thus essentially provides multiple measures of the same phenomenon, it is an option to overcome problems of construct validity. Consequently when using multiple sources of evidence it has been found that analysis rates more highly in terms of overall quality (Yin, 2003). In this thesis multiple sources like, annual reports, webpages, newspaper articles, articles of scholars and sector reports have been used, what can be characterized as data triangulation. Moreover, the data has been collected in a structured way that makes it possible for external observers to trace the steps in all the decisions made and thus will increase the overall quality of the case (Yin, 2003). Another important aspect of construct validity, according to Bryman and Bell (2011), is that the hypotheses or working propositions are derived from theory that is relevant to the concept. They argue as well that qualititative research is inductive and thus will generate theory principal orientation to the role of theory in relation to the research. This is also the case in this thesis.

Internal and External Validity Internal validity refers to the match, or the lack of, between the researchers’ observations and the theoretical ideas developed, whereas the external validity refers to the degree to which the findings can be generalized (Bryman and Bell, 2011). Internal validity has been covered since the propositions reflect the existing literature on the topic under study and there is a detailed explanation, including contrary explanations, of the studied relationships. All within-case analyses have been conducted following the theoretical framework and the results have been analyzed in a cross-case analysis (Yin, 2009). The external validity in the form of a case study represents a problem for a qualitative researcher because case studies are just small samples (LeCompte and Goetz, 1982; Bryman and Bell, 2011). This is covered due to the specification of this research. The focus are container terminals and the findings of this thesis have therefore a higher theoretical generalizability. Yin (2009) argues that through replication logic, the theory is tested by comparing the results of each case. In this study two theories of well cited researchers are tested in a field with case studies where they were not have been tested.

Reliability In the case of reliability Yin (2009) argues that when a study is rigorously conducted, it is

possible that later investigators can repeat the same steps. Bryman and Bell (2011) see two kinds of reliability, the external and internal reliability. External reliability means the degree to which a study can be replicated, like the definition of Yin (2009). In the case of this thesis the study can be replicated as it is based solely on evidence that is readily available for any researcher. The data collection process was rigorous in which all cases are stored in a case study database and all steps have been described. These steps are explained in the data collection and data analysis section of this chapter. The internal reliability refers to whether or not multiple researchers agree on the findings of the researched material. This is also covered during the time of writing this thesis there have been multiple feedback sessions with the thesis supervisor and the end results also been viewed by a second researcher.

3.2.2 Case Selection The purpose of this research is to evaluate the internationalization of terminal operators. Therefore the selected cases in this thesis need to be relevant for studying terminal operator internationalization and thus terminal operators are the focal units of analysis. As explained in the literature review there are three types of terminal operators. Stevedores, maritime shipping companies and financial holdings. Since they have different backgrounds the firm specific advantages (FSAs) of these firms will differ and this could influence their internationalization pattern. Due to the large amount of container terminals worldwide and the limited time for this research, it is not realistic to investigate all terminal operators worldwide. Therefore this thesis will analyze of each category the biggest terminal operator based on the equity based throughput during 2009. Based on that criteria and the categorization of terminal operators, the Port of Singapore Authority International (PSA) is the largest stevedore, APM Terminals (APMT) the largest maritime shipping company and Dubai Port World (DPW) the largest financial holding. In table 1 these units of analysis have been further specified. Here a note has to be made, concerning APMT, since this operator was difficult to position due to fact that it was formed to become an independent terminal operator from its sister carrier Maersk Line. The argument that APMT manages some facilities that are Maersk Line dedicated and other that are multi-user terminals (Slack and Frémont, 2007) made them a maritime shipping company. Based on these arguments APMT is seen as a maritime shipping company in this thesis.

Table 1: Case selection HQ First Number of Number of Case Company Location Expansion Terminals Countries Description Case 1 Stevedores PSA Singapore 1996 28 15 The Port of Singapore Authority is publicly hold and has port operations as their core business. International Investing in container terminals for expansion and diversification. Their business model is horizontal integration and their dominant expansion strategy is through direct investment. Case 2 Financial Dubai Ports Dubai 1999 46 31 Dubai Ports World is a branch of the Dubai World sovereign wealth fund and is publicly owned. Holdings World (including Financial assets management is the main business therefore the investment in container terminals new are for valuation and revenue generation. Their business model is portfolio diversification and developments) their dominant expansion strategy is through acquisitions, mergers and reorganization of assets. Case 3 Maritime APM The 1975/ 62 38 APM Terminals is a sister company of Maersk Line, both are part of the APM Moller Maersk Shipping Terminals Netherlands 2001 (including Group. APM Terminals is privately owned. Their business model is vertical integration. The Companies new holding has maritime shipping as their main business and APM Terminals started as a support developments) function. The dominant expansion strategy is through direct investment. Source: Angenietje Temme (2015) Note 1: In the case of APM Terminals their sister company Maersk-Line already started with a container terminal division that later in 2001 became an own company. That is the reason two dates are shown for their first expansion. Note 2: The Dubai Ports World website gave the number of 65 marine terminals, these terminals are not all container terminals or not located in sea-ports. Therefore the number of terminals is only 46.

3.2 Data Collection The defined propositions give clear directions and are the foundations of the systematic analysis of the content. To be able to do so, the process of collecting data has a number of phases: first, data is collected to establish an orientation on the international transferability of terminal operators firm specific advantages (FSAs); second an overview of available location specific advantages (LSAs) that could be recombined with the terminal operators FSAs where collected and lastly representation of the terminal operators international experience through the collection of their internationalization pattern. In the case of terminal investments of the three terminal operators their company websites are used, see table 2 for the used number of investments researched.

Table 2: The Terminal Operators and the available expansion data Company Website Investment Studied Company Total Studied Investments PSA International 28 23 23 Dubai Ports World 46 37 37 APM Terminals 58 49 49 Source: Angenietje Temme (2015) Note: In some cases new terminal project where scheduled therefore these terminals are not included although they were mentioned on their website.

As already mentioned to generate high construct validity it was important to use data from multiple sources. Therefore the data for these phases was gathered via newspaper articles, industry reports, industry magazines, annual reports, company websites and previous research that reflect these topics. These sources, amongst others, are identified as being appropriate data sources for multiple-case studies (Yin, 2003). To find newspaper articles like from the ‘Financial Times’, and other (financial) newspapers, to analyze the internationalization by container terminals, the LexisNexis database has been used. As a key search term the firm’s name and the name of the terminal was used as a first step. As a result the database gave a broad range of articles, which were then systematically reviewed to identify articles providing significant commentary on the internationalization of the focal firms. Next to the data triangulation all of the data was put in a database. This makes it possible to replicate this study. Subsequently, longitudinal data of the selected cases was collected individually on the three terminal operators via de different sources mentioned above. The collected data was carried out over different periods starting from the moment the company started to

internationalize until 2014. The reason for the different starting dates and thus the different time in number of years of these companies is because they started their businesses in other time frames although when all companies got there present form they started internationalize around the same period. DPW started as a local port operator in Dubai in 1991 after Port Rashid and Jebel Ali port were combined. DWP became a regional port operator in 1999 and since 2005 they claim to be a global port operator. APM Terminals had already started in 1975 when Maersk made its first acquisition in Tacoma, US. Only in 2001 it became an own company under the A.P. Møller-Maersk Group and thus a sister company of Maersk-Line. For PSA their first internationalization step was in 1996 by an acquiring an 49 per cent stake in the Dalian Container Terminals to form a minority joint venture with the local government of Dalian.

3.3 Data Analysis The gathered data was managed and analyzed using NVivo. NVivo is a software for qualitative data analysis and is used because it facilitates an accurate and transparent data process which provides a reliable, general picture of the data (Welsh, 2002). On the analysis part the next paragraph will give an in-depth view. The themes of this thesis have been divided into code categories, in the NVivo program referred to as nodes, which are then associated to codes. This is done by thematic coding. NVivo is used to associate the data. This data (i.e. words, sentences or paragraphs) and the codes, allows later analysis and interpretation of outcomes (Payne 2004). These pieces of newspaper text, as well as similar pieces text are manually evaluated and thus it is important to understand that this can suffer from subjective interpretation. The technique of deductive formulation of an “a priori template of codes” (Fereday and Muir-Cochrane, 2006, p. 83) is used in this thesis. The categories and codes used in the analysis process are derived from the key themes discussed in the literature review and reflect the propositions. The coded texts where then analyzed to identify support (or lack of support) for the propositions and thus the displayed data identifies patterns and subsequently draws conclusions. The concepts of this thesis derived from the literature via the working propositions are the firm specific advantages (FSAs) of a terminal operator, the location specific advantages (LSAs) for a terminal operator and the experience a terminal operator has in internationalization. These concepts (FSAs, LSAs and experience) are all accepted as measures of internationalization (e.g.

Wernerfelt, 1984; Johanson and Vahlne, 1990; Rugman, Verbeke and Nguyen, 2011; Verbeke, 2013). Therefore they are seen as the highest level of quotes and thus the code category.

Table 3: Coding scheme Working Code Category Code Description Proposition Firm Specific Location Bound All information regarding the boundedness of the WP 1a, 1b Advantages FSAs FSAs to the home location of the terminal operator.

Non-Location All information regarding the transferability of the WP 1a, 1b Bound FSAs FSAs into the host location of the terminal operator.

Location Specific Attractiveness of All information regarding the attractiveness of the WP 2a, 2b Advantages the Host Location host location (e.g. capacity of the terminal, port and hinterland infrastructure) entered by the terminal operator.

Accessibility of All information regarding the accessibility of the host WP 2a, 2b the Host Location location (e.g. entry barriers) entered by the terminal operator.

Experience Market All information regarding to the tangible and WP3 commitment intangible commitments (e.g. the chosen entry mode) the terminal operator made at the host location.

Physic Distance The geographical distance between de home location WP 1a, 1b, and the host location WP 2a, 2b, WP 3

Source: Angenietje Temme (2015)

Consequently these and other articles sub codes were reviewed to cover all of the dimension within the data. These code categories and their sub codes are presented in table 2. The analysis of the data, as mentioned in the previous paragraph, is a synthesis of articles, annual reports and other sources over the period that covers the existence of the different companies of the case studies. To give an analytical overview of the findings for each case there is a table presented containing quotes from the data, illustrating the concepts of table 2. The used quotes in these analytical tables are all directly taken from their source even though they are not referenced as such. These quotes are cited individually when used directly in-text in all of the following chapters. The unit of analysis is the terminal operator and its container terminals around the globe. Since the selected terminal operators PSA International, Dubai World Port and APM Terminals are the market leaders their terminal portfolio is, like it has been described earlier large but most of all

very complex. Figure 1 gives an example of the inter-firm relations of the Rhine-Scheldt Delta.

Figure 1: Inter-firm relationships in selected container ports of the Rhine-Scheldt Delta – situation early 2010

Source: Notteboom and Rodrigue (2012).

This data is from the early 2010 and only shows the complexity. Due to this complexity is was not possible to find the relevant information from each of the terminals. Therefore the analysis, although all terminals were studied, the within-case analysis will only make assumption about the terminals where there was enough information to do so. This decision is made to not jeopardize the reliability of this thesis.

4. Results This chapter provides an overview of the results retrieved and analysed from the data collected. The chapter is divided in two parts the within-case analysis and the cross-case analysis. In the within-case analysis PSA International, Dubai Ports World and APM Terminals will be analysed. The cross-case analysis will view the three cases together to assess the similarity and differences of patterns from the within-case analysis. The method of analysing is described in the methodology chapter.

4.1 Within-Case Analysis This section will analyse the cases of PSA International, Dubai World Ports and APM Terminals separately. The analysis will be done though a review of the collected data and comparing this data with the literature. The companies will be viewed in terms of the transferability of their FSA, the ability of recombining the location specific advantages with their FSAs and their experience as an unique FSA. Second they will be assessed by their year of entry, the type of entry mode, the type of commitment, the host location attractiveness and the accessibility of the host location. The data is collected from the time they start internationalizing. To give an overview of the collected date an overview of each terminal operator is done through an analytical table.

4.1.1 Stevedores: the case of the PSA International The largest stevedore is PSA International (PSA). Their home location is Singapore and this is also where its headquarters is located. The data has been collected from the first internationalization in 1996 until 2014. The most valuable firm specific advantage (FSA) is that PSA created an international benchmark for their service level. This service level is based on their successful residence of maritime-related community in the Port of Singapore and that this community strives to provide word-class and competitive products and service standards to meet the stringent requirements of port users. To be able to transfer this FSA PSA had to learn how to deal with the differences in various host countries or like the global head of corporate affairs and human resources Caroline Lim (2007) explained, “as the company began to expand overseas, it also had to learn how to deal with foreign governments, port authorities, unions and communities.” The first expansion, shown in table 3, was through a joint venture with the Port Authority of Dalian and the second was an acquisition in Italy. After Italy PSA took a step further in to Europe with their concession in Sines, Portugal. After that they shifted back to China again for a joint venture to and 26

coming back to Europe by acquiring Hesse Noord Natie that owned five terminals in Antwerp and two in Zeebrugge, both in Belgium. At first they acquired an 80% stake but later it became a wholly owned subsidiary. After this acquisition PSA looked closer to home and made a joint venture commitment in Vietnam. Although there was learning involved as Ms. Lim (2007) explained above, PSA showed more a pattern where it expanded sometimes moving into more distant locations while at other times moving into locations closer to the home country. Therefore this data shows more support for the argument for the rational choice approached because there was not found a gradual expansion FDI pattern into more distant locations. These first steps of internationalization, confirms that PSA has managed to transfer its FSAs internationally since they still have most these terminals in their portfolio. Next to that PSA is awarded as “best global container terminal company” and “best container terminal – Asia” in 2015 (AFLAS, 2015). An interesting extra finding was that PSA made Looking at the ABG Kolkata Container Terminal investment in 2008, PSA had acquired a 49 per cent equity stake. This joint venture was together with the Mumbai-based public listed ABG Infralogistics. Only later in the beginning of 2015 ABG Infralogistics bought PSA out. The reason behind this buyout is not disclosed, but it seems it was due to financial reasons for ABG. This was not a reason for PSA to back out of India since they have several terminals with joint venture partners, as well as a greenfield investments. Looking at table 3 there can be no pattern found looking at the distances from Singapore to the new host locations. It seems that they leapfrog, which is driven by financial incentives. Li (2003) argues that using the strategy of ‘jumping’ or leapfrogging’ is mostly used to catch up with the first movers, only PSA is a first mover. Therefore it assumes a more rational choice approach. The strategy of PSA is based on the strategy, according to the group CEO Mr. Tan Chong Meng, that PSA will continue to make the necessary investments to stretch its capabilities and enhances the operational efficiency to serve the customers as their businesses grows with PSA into the future (Portstrategy, 2015). PSA has managed to grow quite rapidly from a single location to operating in 15 countries on four continents due to their unique operational FSAs and PSA explain that they “have to remain agile, tread with caution and work closely with our customers and partners to seize the opportunities while avoiding the pitfalls.” These pitfalls can be linked to the location choice of PSA for example that of Pipadive where they

Table 4: The Internationalization of PSA International

PSA PSA owes a great deal of its success to the resident port and maritime-related community that strives to provide world-class and Firm Specific advantage competitive products and service standards to meet the stringent requirements of port users to establish itself as an international benchmark Evidence Revenue Europe Revenue Revenue Revenue and Europe and Revenue Revenue Revenue Revenue Southeast Southeast Asia Mediterranean Mediterranean Northeast Northeast Others Others Transferable Assessment Asia 2012 2013 2012 2013 Asia 2012 Asia 2013 2012 2013 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 Yes Revenue 2,726,367 2,793,849 1,124,363 1,172,782 361,681 377,658 298,955 304,658

Degree of Attractiveness Accessibility of Public- relatedness Year of Geographical of the host the host private Degree of to previous entrance Location Region distance in km location location Entry mode partnership commitment investment 1996 Dalian, China Northeast 4,559 H M JV Yes L - Asia 1998 Italy Europe 10,059 H L Acquisition No H L 1999 Sines, Europe 11,896 H L Concession - H L Portugal 1999 Pipavav, Other M H JV Yes L L India* 1999 Fuzhou, Northeast 3,214 H M JV Yes M M China Asia 2001 Guangdong, Northeast 2,610 H M JV Yes M H China Asia 2002 Antwerp, Europe 10,559 H M Acquisition No H M Belgium 2002 Zeebrugge, Europe 10,639 M M Acquisition No H M Belgium 2003 Leam Southeast 1,347 H M JV Yes M M Chabang, Asia Thailand Source: Angenietje Temme (2015) *PSA sold its stake in 2004 (The Business Time Singapore, 2004)

Figure 4 (continued): The Internationalization of PSA International Degree of Attractiveness Accessibility of Public- relatedness Year of Geographical of the host the host private Degree of to previous entrance Location Region distance in km location location Entry mode partnership commitment investment 2004 Habiki, Japan Northeast 4,589 H L Greenfield No H L Asia 2006 Chennai, Other 2,907 H M Greenfield No H M India 2007 Tianjin, Northeast 4,417 H M JV Yes M H China Asia 2007 Rousseau, South 15,646 H M Greenfield No H L Panama America

2007 Ho Chi Minh, Southeast 1,065 M M JV Yes M M Vietnam Asia 2007 Mersin, Europe 8,087 H M JV Yes M L Turkey 2008 Buenos Aires, South 15,905 H M JV Yes M L Argentina America 2009 Busan, South- Northeast 4,586 H M JV No M M Korea Asia 2009* Kolkata, India Other 2,895 M H JV No M L

2011 Dammam, Other 6,375 H M JV Yes M L Saudi Arabia 2013 Cali, South 19,511 H M JV No M M Colombia America 2014 Mumbai, Other 3,909 H M Greenfield No H H India 2014 Jakarta, Other 907 H M JV No M M Indonesia

Source: Angenietje Temme (2015)

started in 1999 but sold the terminal in 2004. PSA's head of communications, Fei Che, confirmed the sale of PSA's stake in an interview with Bloomberg, saying the move was a 'very strategic exit' (Business Times Singapore, 2004). A few years later PSA their company spokesperson said: “PSA has always upheld the belief that there is great market potential in India and we will continue to develop our existing portfolio of port projects in India and look for other opportunities to invest in the country” (Business Times Singapore, 2012). The change of thought could be due to a learning process they have undergone in India what could suggest an incremental learning process. Although the statement they make that they look for opportunities only first investing in their existing portfolio. This fits also the assumption of Benito and Gripsrud (1992) that the nature of the business defines the feasible locations and therefore it seems more a rational choice approach to internationalization then a learning process. The only missing continents in PSA’s portfolio are Northern America and Australia. PSA tried to get a foothold in Australia, only PSA bowed out on May 9th 2006 from an attempt to acquire ports owned by Australia's Patrick Group. The ports were to have been sold to it if Macquarie Bank managed to buy the entire Patrick portfolio of companies. But the deal was complicated by a rival bid from another Australian company, the Toll Group (The Straight Times Singapore, 2006). If this acquisition had gone through, it would have given PSA a key stake in the Australian market. This example shows that it is not easy to enter another country and that some locations are easier to access then others, what could more reflect the argument of Johanson and Vahlne (1977) that the lack of knowledge of foreign markets is a critical restriction to international expansion and therefore the risk and uncertainties of doing business abroad is higher than investing in the markets they are linguistically, psychologically and culturally familiar with. Ms. Fu, CEO for Southeast Asia and Japan, argues that the costs of acquiring ports have risen ‘astronomically’. She adds that: “Although many countries are privatizing their ports, the port business is still intrinsically linked to government regulations, especially in areas of Customs and security. While we say we are private operators, we do play a role in contributing to trade development and the promotion of local industries. So we have to actively engage the government where we operate.” Fu (2006) The reason that PSA is absent in these parts of the world, illustrated in figure 2, can thus be found due to the differences in local institutional factors and the degree of openness of the

local terminal market which was also concluded by Notteboom and Rodrigue (2012) and thus can also be used as support for the argument of Johanson and Vahlne (1977) that it was too much risk to invest in the countries that they are not familiar with. In the case of deal not going through with the Australian portfolio it was due to multiple reasons of needing to buy the total portfolio and a rival bid of a local terminal operator. Therefore it seems more like a fair bidding process and not that they did not get the Australian terminals because they did not have enough market knowledge and thus reflecting a more rational choice approach of internationalization.

Figure 2: Global coverage of PSA International

Source: Notteboom and Rodrigue (2012)

The type of entry mode seems to give a good indication in terms of showing if a country is accessible and on what level. Australia was not accessible for PSA where China is only accessible with a public- private partnership (PPP) via (in most cases) a minority joint venture. This confirms the argument of Vanelslander (2008) who argues that legislation often makes it impossible to enter a foreign market without establishing links with one or more local partners. The entry mode can also show the level of commitment, having a joint venture has also less commitment for that location and what results is less risk. However a joint venture still has much more risks than non-equity entry modes like licensing. PSA only enters new host locations via joint ventures, acquisitions or greenfields and thus enters with a moderate to high risk entry mode. Not only does the legislation have an influence on the type of entry, mode but also the degree of the strategic value of the location. The location itself has strategic value and the degree of attractiveness is based on appendix 1. According to Notteboom and Rodrigue (2012) the terminal assets are typically valued higher when located in markets with a high growth potential and high terminal capacity utilization. Looking at the pattern in table 4 it can be seen that all locations have moderate or high valued locations where it can be seen in appendix 1 that already some of the terminals have been extended or upgraded. The chief executive Tan Chong Meng said: “over the next few years, we will continue to invest in new terminals and upgrade older ones, ploughing back a high proportion of our annual earnings

to serve our customers' future requirements and growth” (The Straight Times Singapore, 2014). This confirms that the commitments PSA made in the past years and the years to come are long term commitments and that their internationalization is based on the requirements of their customers and thus will invest where it is needed as long as PSA think it will be profitable. PSA’s biggest investment is that of acquiring 20 per cent in their rival operator Hutchinson Wampoa (HW). This deal gave PSA a stake in all 42 of HW’s port assets in 20 countries and raises PSA’s interest in Hong Kong International Terminals (HIT), Kwai Chung's dominant operator, to just over 30 per cent (South China Morning Post, 2006). Looking at the motive for this acquisition the group chairman Mr. Fock Siew Wah argues: “we believe this investment will generate good long-term value for PSA and allows us to benefit from a well- diversified spread of assets globally”. That PSA paid a premium for this stake in HW Mr. Fock defends as in line with the premium Dubai's DP World paid for P&O in February 2006 and that PSA would continue to invest in opportunities that make good commercial business sense (South China Morning Post, 2006). Taking together the FSAs of PSA are highly transferable, as exhibited from the quick expansion process and the growing revenue of the last two years. Unfortunately the annual reports of earlier years where not accessible therefore this conclusion is solely based on the revenues of these two years and therefore should be taken with caution. The lack of pattern shown in table 4 concerning the location shows that PSA managed to a high degree to recombine their FSAs with the location specific advantages (LSAs). These LSA where not always easily accessible due to government regulations or just because another party made a higher bid. The degree of accessibility is also shown in table 4 via the type of entry mode and there a pattern can be found. Where the accessibility is moderate the entry mode is a form of a joint venture (minority, 50/50 or majority) and in most of the cases with a public- private partnership. Accessing a location that is easier to access an acquisition or greenfield is established. An interesting finding is that PSA is investing in an early stage in distant countries like Belgium with an acquisition what is a high commitment entry mode. Next to that they are entering geographical close countries like China and Thailand with a public-private joint venture. An explanation could be that the investment opportunities are not endless and is constrained by institutional factors (Olivier et al. 2007). In that case it could be argued that due to the institutional environment in Belgium that it has less risk and thus easy accessible. Therefore a high commitment entry mode can be used and the opposite is true for China and Thailand as they are developing countries, what makes them more difficult to access. The types

of entry modes give therefore a good argument for the type of commitment PSA was willing to make in a specific location. Derived from table 4, it can be concluded that PSA, for the biggest part of their internationalization, has a moderate commitment in the host locations. The internationalization of PSA started, as all MNEs started, without experience. The experience that they had was established in their home country. Without cross boarder experience their first commitment was moderately difficult and thus they used a public-private joint venture. Their second was more easily accessible, although it was a distant country, and therefor they used a high commitment entry. As second argument is the lack of experience due to the physic distance because both countries are relatively far away. This does not resembles a gradual expansion of FDIs into more distant locations and thus supporting the rational choice approach. Although China could be argued les distant since they are having both strong governmental influences and thus it could be assumed that there is a form of experience with how to do business in a country that has strong governmental regulations. Next to that the arguments found in the newspaper articles included board members explaining their investment actions where based on a profit perspective. The portfolio of PSA is not global since they are not present in North America and Australia but they are the largest terminal operator based on equity throughput (Notteboom and Rodrigue, 2012). Thus confirming that the nature of the business defines the feasible locations although it does not preclude the experience effects. Thus the internationalization of PSA resembles a more rational choice approach.

4.1.3 Financial holdings: the case of Dubai Ports World Dubai Ports World (DPW) is the largest financial holding company in the ports business, with its headquarters in Dubai. The data on DPW has been collected from the first internationalization in 1999 until 2014. DPW started with the interest in shipping in the Emirate's with only two man-made harbors: the downtown Port Rashid and the far larger Jebel Ali, now a sprawling free-trade city within a city hugging the coastal highway to Abu Dhabi (Associated Press Financial Wire, 2009). Due to these two ports DPW could develop its ability to provide a superior level of service to shipping lines and has been voted “Best Seaport in the Middle East” for ten constructive years (PR Newswire US, 2005). DPW was able to transfer this FSA by catapulting itself with one transaction into the sixth-largest terminal operator in the world. This was in January 2005 through the acquisition of the operations outside the United States of U.S.-based CSX Corporation (CSX). Later the acquisition of P&O in 2006 further added substantially to DPW’s portfolio due to P&O’s ports in China. Peter Wong, Vice President China, CSX World 33

Terminals said: “I am very pleased that the acquisition has been completed. DPI has an excellent reputation for the successful management and growth of port operations. It is clear that the combination of two such complementary operations is great news for our customers and employees” (PR Newswire US, 2005). Before elaborating on the acquisitions done by DPW the first internationalization steps need to be reviewed. As can be seen in table 5, DPW’s first expansion was into neighbouring country Saudi Arabia. The next steps where into Djibuty, India and Romania. Djibuty and Inda are not that far from Dubai in location as well as culturally. Both countries have a large Muslim population and both have governments that are highly involved in the countries business environment. Romania is therefore an outlier. This can also be backed up by the suggestion that managers try to reduce risk and uncertainty by investing in the markets that they are linguistically, psychologically and culturally familiar with (Hakanson and Ambos, 2010). This can not generally be said about the entrance of DPW in Romania, as the location of the port of Constansa on the Black Sea in Eastern Europe is not known for high growth rates. Therefore the location at first is not very attractive, but at that time Romania was already an EU candidate and became an EU member in 2007, thus the investment can be seen as a first step into Europe. Derived from that it could be seen as a learning investment for how to do business in Europe. Next to the learning it can also be seen as rational because it is deversification. DPW is part of a financial holding and its task is to genreate profit. The next acquisitions were two major acquisitions. As already mentioned DPW acquired the terminal portfolios of CSX World Terminals in 2005, which had stakes in nine ports in China, Hong Kong, South (East) Asia, Australia, the Americas and Europe (Drewery Shiping Consultants, 2006). Therefore it can be stated that DPW has acquired around two-thirds of its terminal concessions through the acquisition of CSX and P&O, which gave DPW the credibility to bid for new concessions in its own right (Farrel, 2012). DPW has an aggressive growth strategy aimed at acquiring existing terminal assets, many of which are in lower volume markets that have a strong potential, like the Mediterranean, South Asia, and the Middle East. This argument is backed up due to the small hectare portfolio compared to its sizable number of terminals in which it has the largest equity (50) and these investments are found in secondary port regions (as mentioned above). Most of the ports in these regions have undergone extensive privatization or corporatization processes in the last decades (Notteboom and Rodrigue, 2012). The governments of these countries are

Table 5: The internationalization of Dubai Ports World Dubai Port World

Firm Specific advantage Exporting DPWs efficiency and customer service know-how. DPW has an excellent reputation for successful management and growth of port operations. Evidence Revenue Asia Revenue Asia Revenue Revenue Revenue Revenue Pacific and Pacific and Australia Australia Middle East, Middle East, Indian Indian and and Revenue Revenue Europe and Europe and Subcontinent Subcontinent Americas Americas Others Others Transferable Assessment Africa 2012 Africa 2013 2012 2013 2012 2013 2012 2013 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 Yes Revenue 2,112 2,124 457 355 553 594 298,955 304,658 Degree of Attractiveness Accessibility of Public- relatedness Year of Geographical of the host the host private Degree of to previous entrance Location Region distance in km location location Entry mode partnership commitment investment Jeddah, Saudi 2000 Middle East 1,699 M L Concession - H - Arabia 2000 Djibouti Middle East 2,008 L M JV Yes M M

2002 Vizag, India 3,370 H M JV Yes L L

Opened in Mundara, 1,490 H M 100% equity - H M 2003 India

Source: Angenietje Temme (2015)

2003 Maputo, Africa 6,207 H M JV Yes M L Mozambique 2005 Pusan, South- Asia 7,025 H - Ex CSX Yes L - Korea 2005 Brisbane, Australia 11,997 - Ex CSX - H - Australia 2005 Tianjin, Chin Asia 5,917 H - Ex CSX Yes M -

2005 Yantai, China Asia 6,306 - Ex CSX Yes M -

Santo Domingo, South 2005 12,371 M - Ex CSX No M - Dominican America Republic Melbourne, 2005 Australia 12,454 M - Ex CSX - H - Australia Buenos South 2005 Aires, 13,727 M - Ex CSX Yes M - America Argentina Hong Kong, 2005 Asia 5,950 H - Ex CSX Yes M - China

Source: Angenietje Temme (2015)

Table 5: (Continued): The internationalization of Dubai Ports World Degree of Attractiveness Accessibility of Public- relatedness Year of Geographical of the host the host private Degree of to previous entrance Location Region distance in km location location Entry mode partnership commitment investment 2005 Cochin, India Other 2.798 H M Concession - H M Kocaeli, 2005 Eurpoe 4,031 H L Greenfield - H L Turkey Qingdao, 2005 Asia 9.890 H M JV Yes L H China 2006 London, UK 5,487 H - Ex P&O - H - 2006 Kulpi, India Other 3,370 H - Ex P&O - H - Sydney, 2006 Australia 12,067 M - Ex P&O - H - Australia Fremantle, 2006 Australia 9,051 M - Ex P&O - H - Australia Southampton, 2006 Europe 5,555 M - Ex P&O - M - UK Vancouver, North 2006 11,734 H - Ex P&O - H - Canada America Laem 2006 Chabang, Asia 4,958 H - Ex P&O Yes L - Thailand Busan, 2006 Asia 7,025 M - Ex P&O Yes M - South-Korea

Source: Angenietje Temme (2015)

Table 5: (Continued): The internationalization of Dubai Ports World Degree of Attractiveness Accessibility of Public- relatedness Year of Geographical of the host the host private Degree of to previous entrance Location Region distance in km location location Entry mode partnership commitment investment Surabaya, 2006 Asia 7,195 M - Ex P&O Yes M - Indonesia Le Havre, 2006 Europe 5,424 H - Ex P&O No M - France Chennai, 2006 Other 2,947 H - Ex P&O - H - India Nhava Sheva, 2006 Other 1,936 M - Ex P&O Yes M - India Karachi, 2006 Middel East 1,182 H - Ex P&O - H - Pakistan Antwerp, 2006 Europe 5,164 H - Ex P&O - H - Belgium South 2006 Calloa, Peru 14,843 H L Greenfield - H L America Dakar, 2007 Africa 7,620 L L Concession - H L Senegal 2007 Sokna, Egypt Middle East 7,482 H L Acquisition - H L 2007 Abu Dhabi Middle East 131 H M JV Yes M H

Source: Angenietje Temme (2015)

Table 5: (Continued): The internationalization of Dubai Ports World Degree of Attractiveness Accessibility of Public- relatedness Year of Geographical of the host the host Private Degree of to previous entrance Location Region distance in km location location Entry mode Partnership commitment investment Rotterdam, 2007 The Europe 5,178 H L Greenfield/JV No L M Netherlands Algiers, 2008 Africa 5,085 M M JV Yes M L Algeria Tarrangona, 2008 Europe 5,246 H M JV No M M Spain Santos, South 2009 12,236 H M JV No M L Brazil America Algiers, 2009 Africa 5,085 M M JV Yes M M Algeria Opened in Ho Chi Minh, Asia 5,630 M M JV Yes H L 2010 Vietnam Parimaribo, South 2011 11,775 L M JV Yes M L Surinam America Source: Angenietje Temme (2015)

often prone to grant access to global terminal operators with the goals of significantly increasing port productivity (Notteboom and Rodrigue, 2012). Thus the first step for DPW is to acquire existing terminals and then undertake modernization projects to make the port terminal more productive, which fits the FSA of DPW. Dispite the strong foodhold in some parts of the world, like the Middle East, some locations are hard to excess by DPW, for instance entry barriers. In The Middel East the competitive tendering is valued high in some countries like Syria, Lebanon, Jordan, Saudi Arabia, but in the UAE contracts for the management of smaller ports, such as Fujairah and Mina Zayed, have been directly negotiated with DPW. Oman has also preferred negotiations as a means of bringing in foreign expertise and funding to its centrally controlled ports system (Farrell, 2012). DPW was involved in on the P&O deal concerning the ports in America. This deal sparked an outcry in Congress, where some members said they had concerns that an Arab- owned port operator could expose the United States to Middle Eastern terror groups. Bowing to political pressure, DPW promised to sell its U.S. operations by October 2006 (AFX International Focus, 2006). The reason that DPW is almost absent in America can thus be found in the differences in local institutional factors and the degree of openness of the local terminal market (Notteboom and Rodrigue, 2012). Figure 3: Geographical Covarage of Dubai Ports World

Source: Notteboom and Rodrigue (2012) As already shown, the type of entry mode is crucial and tells a lot about the institutional factors of the host location. Since DPW is a Arab-owned port operator some parts of the world, as illustrated with the P&O US case, are sometimes not easy to access. Therefore paying a premium to acquire a terminal portfolio, such as that of CSX and P&O, can be seen as a rational decision to overcome entry barriers, athough it is not a 100 per cent cure. These type of investments are associated with a high commintment and enable DPW to overcome the learning process by acquiring already made deals with (local) governments and other parties. CSX and P&O were already mature companies and owned locations with high values. By acquiring these firms, that have been operating interantioanlly for a long period over time, the assumption of Benito and Gripsrud (1992) is confimed. The assumption was, that the emergence of such firms 40

would make it even less likely, that they would internationalize through the process model (Benito and Gripsrud, 1992). According to Notteboom and Rodrigue (2012) the terminal assets are typically valued higher when located in markets with a high growth potential and high terminal capacity utilization. Looking at table 5 it can be seen, also see a more extended version in appendix 2, that most of the acquired terminals where valued high and the terminals that are acquired by DPW itself are generally valued moderately valuable. This can be backed up by their strategy of acquiring existing terminal assets in lower volume markets that have a strong potential and thus have not been fully developed at the time of writing this thesis. These lower volume markets could be seen as potential growth markets and this fits the argument of Notteboom and Rodrigue (2012) that the thought of potential monopolistic profits is what they see as the operational value. Financial institutions, like DPW, are particular attracted to places where a local monopoly positon is available. In these developing countries other terminals have not seen the opportunity yet, which makes it a posibly valuable location for DPW to gain an monepolitic position or to be able to set entry barriers to other terminal operators. This could also be the answer on the question of Benito and Gripsrud why such companies would ten to move to closer locations the next time. In the case of DPW they are a terminal operator from the developing world. Research shows that private sector participation in the port industry is useful for improving port operation efficiency (Tongzon and Heng, 2005) in their study 21 of the 25 selected container ports/terminals where developing countries. Therefore it could be a reason to expand less far because there are more oportunities in their own region. Expanding close they could have an advantage because they have a better market-specific and general knowledge then terminal operators from developed countries and thus could reflect a more inremental learning process. Although DPWs internationalization has more terminals outside their own region and due to the background of DPW and that they are seeking monopolies in these regions, it reflects more a reational choice approach than a incremental learning process. Derived from the above the FSAs of DPW are highly transferable although in some cases (e.g. P&O and their terminals in the US) legislation created an entry barrier, which has made it impossible for DPW to enter as an Arab-state owned company. It is therefore likely that they had to acquire already established terminal operators to gain a global footprint. When DPW started its first cross border ventures it first went close and with its fourth step out of the border it was into Romania, a geographical culturally distant location, since Romania is for the largest part Catholic and European. Romania was in 2003 not yet a member of the EU but it

became a full member in 2007 and therefore this move can be seen as the first step in to Europe and a form of a learning process. Although this was a significant step, the largest steps DPW made were through the acquisitions of CSX and P&O that contained two-third of DPWs current terminal portfolio. The experience DPW derived from its own terminals in Port Rashid and in the port of Jebel Ali made their FSA possible and through their acquisitions they gained a global footprint and leapfroged the learning process. The decisions made are all based on an economic perspective since the company is part of a financial holding. Therfore it can be concluded that the internationalization of DPW is for the largest part based on a discrete rational approach.

4.1.2 Maritime Shipping Companies: The case of APM Terminals APM Terminals is the largest Maritime Shipping Company in the world (Notteboom and Rodrigue) and its sister company of Maersk Line the largest shipping line of the world (ship- techology, 2015). Their mother holding company is the A.P. Møller-Maersk Group, which has it headquarter in Copenhagen, Denmark. The A.P. Møller-Maersk Group is a conglomerate of worldwide businesses established in 1904 with its core focus in the industries of shipping and energy. In 1999 Maersk, the shipping line business of the Group, acquired Sea-Land Services and became Maersk-Sealand (Vanelsander, 2008). In 2005 they bought P&O Nedlloyd and merged it with Maersk Sealand to form Maersk Line (The Straits Times Singapore, 2006). The most important motive acquisition of Sealand was the large container-shipping network, which was complemented by the network’s terminals (Vanelsander, 2008) what expanded Maersk’s terminal operations globally. In 2001 APM Terminals (APMT) was established as a separate terminal operating unit within Maersk Line. APMT became an independent business in 2004 relocating its headquarters to The Hague, The Netherlands (Journal of Commerce, 2006). The relocation of the headquarters was in order to appear to be a more independent player inside the Danish Group (Midoro, Musso and Parola, 2005). This short introduction to the APMT case shows that the internationalization already began in 1975 for Maersk and that APMT emerged from Maersk. Therefore the data has been collected from the first opening of a Maersk terminal in 1974 until 2014. Due to the complexity, it is possible that there are terminals not mentioned in table 6 or in appendix 2, however if there are terminals missing this will not materially affect the outcome of this analysis due to the number of terminals that are accounted for currently. All distances have been measured from the headquarters in The Hague, The Netherlands, although the previous headquarters when APMT was part of Maersk Line was in Copenhagen, Denmark, and this will not significantly 42

influence the distance argument. The expertise of APMT in developing, constructing and operating terminal facilities goes, as already mentioned, back to the 1970’s. Derived from this the most valuable firm specific advantage (FSA) of APMT will be their expertise in the development, construction and operation of ports. This can also be shown by winning such prestigious awards like: “Port Operator of the Year” in 2006, 2009, 2012 and “International Terminal Operator of the Year” in 2012 and 2013. Due to the fact that Maersk Line is a sister company of APMT, and therefore there was already a basis for APMT, this made it easier to transfer the FSA into new locations. Having Maersk Line as a sister company can be seen as a FSA as well.

Table 6: The internationalization of APM Terminals APM Terminals

Firm Specific advantage: Core expertise in the development, construction and operation of ports.

Evidence Revenue Revenue Revenue Revenue Europe and Europe and Revenue Revenue Revenue Revenue Southeast Southeast Mediterranean Mediterranean Northeast Northeast Others Others Transferable Assessment Asia 2012 Asia 2013 2012 2013 Asia 2012 Asia 2013 2012 2013 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 Yes Revenue 2,450 2,573 17,312 16,800 11,204 11,662 65,454 58,828

Degree of Geographical Attractiveness Accessibility of Public- relatedness distance in of the host the host Entry private Degree of to previous Year of entrance Location Region km location location mode partnership commitment investment North 1975 Tacoma, USA 7,879 M L Acquisition - H - America 1986 Algeciras, Spain Europe 1,935 M L Greenfield - H L Laem Chabang, 1995 Asia 9,319 H M JV Yes M L Thailand Middle 1998 Salala, Oman 5,834 H H JV Yes L East L 1998 Contonou, Benin Africa 5,092 L L Greenfield - H L Bremerhaven, 1999 Europe 332 H L JV No M L Germany Los Angeles, North 1999 8,947 H L Greenfield - H M USA America Pelepas, 1999 Asia 10,533 H H JV Yes M M Malaysia Gioia Tauro, 2000 Europe 1,766 H M JV No L L Italy Buenos Aires, South 2000 11,409 L M Acquisition - H L Argentina America Source: Angenietje Temme (2015) 44

Table 6 (Continued): The internationalization of APM Terminals Degree of Geographical Attractiveness Accessibility of Public- relatedness distance in of the host the host Entry private Degree of to previous Year of entrance Location Region km location location mode partnership commitment investment North 2000 Elisabeth, USA 9,799 H L Greenfield - H - America Rotterdam, The 2000 Europe 20 H L Greenfield No H M Netherlands 2002 Shanghai, China Asia 8,939 H H JV Yes M L 2002 Tema, Ghana Africa 5,182 H H JV Yes M M 2003 Dalian, China Asia 8,238 H H JV Yes M M 2004 Aqaba, Jordan Africa 3,556 M H JV Yes M L 2004 Xiamen, China Asia 9,375 M H JV Yes M M 2004 Douala, Guinea Africa 5,371 L M JV No M M 2005 Pipavav, India Asia 6,645 M M JV Yes M L South 2005 Itajai, Brazil 10,193 M L Acquisition - H L America Zeebrugge, Opened in 2006 Europe 112 H L Greenfield Yes H M Belgium Middle 2006 Bahrain 4,816 H M JV Yes M L East 2006 Apapa, Negeria Africa 5,083 JV No M M 2006 Mumbai, India Asia 6,900 H M JV Yes M M North Opened in 2007 Virginia, USA 6,904 H L Greenfield - H L America Middle Opened in 2007 Port Said, Egypt 3,247 H M JV Yes M L East Tangier, Opened in 2007 1,984 H L JV No M L Marocco South 2007 Posorja, Ecuador 9,888 H M Greenfield No H L America

Source: Angenietje Temme (2015)

Table 6 (Continued):: The internationalization of APM Terminals Degree of Geographical Attractiveness Accessibility of Public- relatedness distance in of the host the host Entry private Degree of to previous Year of entrance Location Region km location location mode partnership commitment investment 2007 Luanda, Angola Africa 6,833 L M JV No M L

2007 Qingdao, China Asia 8,436 H H JV Yes L H Le Havre, 2007 Europe 466 M L JV No M H France North Opened in 2008 Alabama, USA 5,948 L L Greenfield - H H America South 2008 Pecém, Brazil 7,404 L L 100% share - H M America North 2008 Miami, USA 7,424 L M JV No M H America Pointe-Noire, 2008 Africa 6,370 M M JV No Lb M Congo 2008 Genoa, Italy Europe 920 M L Greenfield No H H South 2009 Santos, Brazil 9,792 H L JV No M M America 2009 Qingdao, China Asia 8,436 H H JV Yes L H Aarhus, 2010 Europe 596 H M JV No M M Denmark Monrovia, 2010 Africa 5,282 M L Greenfield - H M Liberia South Opened in 2011 Calloa, Peru 10,502 M M Greenfield Yes H M America Lázaro South 2011 Cárdenas, 9,528 M L Greenfield - H M America Mexico Gothenburg, 2011 Europe 796 M L Concession Yes H M Sweden Moin, Costa South 2011 8,965 ? L Greenfield - H M Rica America Source: Angenietje Temme (2015) 46

Table 6 (Continued): The internationalization of APM Terminals Degree of Geographical Attractiveness Accessibility of Public- relatedness distance in of the host the host Entry private Degree of to previous Year of entrance Location Region km location location mode partnership commitment investment Wilhelmshaven, Opened in 2012 Europe 304 H L JV No M H Germany 2012 Izmir, Turkey Europe 2,330 H M Greenfield - H M Mombasa, Opened in 2013 Africa 7,084 H L JV ? H M Kenya 2014 Namibe, Angola Africa 7,529 L M JV No M M Rotterdam, The Opened in 2015 Europe 20 H L Greenfield No H H Netherlands Abidjan, Ivory Sold in 2012 Africa 5,260 M M JV No M - Coast Stevedoring Sold in 2015 Charleston, USA Americas 6,835 M H Yes M - contract Sold in 2015 Houston, USA Americas 8,065 M L Greenfield - M - Jacksonville, Sold in 2015 Americas 7,145 L L Greenfield - M - USA ? Onne, Nigeria Africa 5,279 L JV Yes M - ? Oslo, Norway Europe 960 L M JV Yes M - ? Nansha, China Asia 9,260 H L Indirect JV Yes L - (Source: Angenietje Temme, 2015)

Looking at the expansion pattern shown in table 4, and more detailed in appendix 2, at first glance it can be argued that there is no pattern, when considering the distance and the type of countries, as where the terminals are located differ. In table 6 it can be seen that most of the locations have moderate or high value locations and it can be seen in appendix 2 that already some of the terminals are extended or upgraded. Where some are valued as low, this is based on their terminal capacity, which does not directly mean that the location does not have a strategic value. According to Notteboom and Rodrigue (2012) the terminal assets are typically valued higher when located in markets with a high growth potential and high terminal capacity utilization. After the year 2000 there is more of a pattern towards the developing world, and thus it is not surprizing that the volumes in TEU are not that large at this moment. Looking at the expansions in 2011 there are three entries in South America. For example in 2011 APMT announces: “during the past 12 months, APM Terminals has secured three significant terminal projects in Brazil, Peru and Costa Rica, in addition to its existing terminals in Argentina and Brazil”. The reason behind these investments is that they see Latin America as a key growth market (APM Terminals, 2011). This trend towards the developing world and the large presence in China and the African world are examples of their underlining a strategy more on global

Figure 4: Maersk Shipping Routes and Port Calls 2015

Source: Maersk (2015) market coverage to support its sister shipping company Maersk-Line (Notteboom and Rodrigue, 48

2012). In Africa APMT has 12 operating facilities in 10 African countries, including facilities in Tangier, Morocco and Port Said East, Egypt. New terminal projects are currently underway at the Port of Abidjan, Ivory Coast, and Badagry, Nigeria (World Maritime News, 2014). The argument for investing in Africa is according to the head of business development for the Middle East and Africa, Hans-Ole Madsen (2011) that “Africa’s attraction is that it is relatively early on in its development cycle”. This can be seen as a rational economic decision. The rational choice based on economics can also be linked to the shipping routes of sister company Maersk-Line, since maritime development and economic growth are closely knitted together (Ng et al., 2014). APMT is operating in 16 of the total of 26 areas where Maersk-Line is active (Parola and Veenstra, 2008). Thus APMT covers more than 61 per cent of the ports Maersk-Line calls to, although these figures are from 2008, the argument is still valid that APMT’s internationalization is significantly influenced by its sister Maersk-Line. The combination of Maersk-Line and APMT are the only companies that match their liner network and its terminal portfolio in terms of a global coverage (Parola and Veenstra, 2008). The above given arguments are visualized in figure 4 here the pattern between the APMT terminal portfolio and the Maersk-Line liner network is pointed out (note: on this map inland terminals have also been mapped). Maersk-Line is however not the only customer of APMT, while in the beginning the terminal business of the A.P. Møller-Maersk Group was established as dedicated terminal facilities making its business more reliable, now APMT has mostly multi-user terminals. According to Neil Davidson (2006), research director at Drewry Ports, a division of Drewry Shipping Consultants in London: “They have diversified away from Maersk-Line and become a multiuser operator. Maersk- Line is down to 60 to 70 percent of APM Terminals' business from the more than 90 percent share when they first got into the business”. Where Maersk-Line started the terminal business, APMT has expended mostly into South America and Africa. For a company from a developed country the step into developing countries could have more risks. These risks need to be weighed against the risks of operating in unknown foreign environments and the costs of learning to do business there (Johanson and Vahlne, 1977). APMT does know how to transfer there FSAs into the host location since they have established almost a global footprint, see figure ??. APMT is, as already shown, very visible in developing countries so they saw the benefits that had risen due to structural market imperfections (Rugman et al. 1985). Although these differences between developed and developing countries in their local institutional 49

factors and the degree of openness of the local terminal market might imply that some terminal operators are very visible in one market and lagging behind in another (Notteboom and Rodrigue, 2012). This is therefore not totally applicable for APMT since they are only missing Australia in their portfolio. Why APMT has no terminal operations in Australia was not found in the data. Figure 5: Geographical coverage by APM Terminals

Source: Notteboom and Rodrigue (2012) The expansion in Asia is interesting since all these expansions are via a public-private partnership. When counting India under Asia here a learning process can be seen. The first step into India is a public-private minority joint venture the next is a majority joint venture with an Indian company where its shareholder is only 61 per cent of the Indian government (Concorindia, 2015). This confirms the argument of Vanelslander (2008) who argues that legislation often makes it impossible to enter a foreign market without establishing links with one or more local partners. Looking deeper into the literature about public-private partnerships, these partnerships arise in general due to the unpredictability of laws, regulations and policies and excessive regulatory burden play a major role in deterring FDI (Daude and Stein, 2007). More specific for these partnerships in ports, there are two explanation, according to Panyides, Parola and Lam (2014), there are two explanations why there are only public-private partnerships in dese developing countries. The first is the absence of institutions such as a regulatory quality might act as a tax by increasing the cost of doing business. Second, imperfect ability to engage in business even in the presence of regulation might also increase uncertainty regarding future returns and thus have a negative impact on the level of investment. In other words the ‘ease to start a business’ in developing countries contributes to the development of co-operation between government and private enterprise for port projects. Deriving from these arguments it can be seen that to enter with a public-private partnership is a rational choice due to the necessity to cooperate with the (local) government to be able to enter the location. APMT shows that it is able to transfer its FSAs across the globe and that in the search for

new locations APMT searches for opportunities, like in the developing world. Their experience goes a long way back since their sister company Maersk-Line already started the terminal business in 1975. The expansion pattern follows for a large part the liner network of Maersk-Line. The liner network itself can be seen as a pattern of economic growth and thus the ports where a container ship calls is an economic hub and thus an attractive location. To locate the terminal at that location can thus be seen as a rational choice. Since 2004 APMT was an own business and made more investments in Africa and South America with no or mediate experience in these countries. This can be seen as rational decisions since their main argument is that they see these continents as growth markets. Combining this statement with the long history of Maersk-Line in the business where APMT emerged from, the argument of the liner network – economic growth and the ability of APMT to recombine its FSAs at the host location makes the conclusion that APMT internationalizes via a rational choice approach.

4.2 Cross-Case Analysis The cross-case analysis presents the results of the analysis of the three terminal operators. The aim of this chapter is to identify how well the rational choice or learning process explains the internationalization of terminal operators. This by examining the ability of the terminal operators to transfer and recombine their firm specific advantages at the host location and if experience plays a role. The FSAs of PSA International (PSA), Dubai Ports World (DPW) and AMP Terminals (APMT) are all slightly similar, see table 7 and they are all valued for it by their customers and through awards. What distinguishes these three terminal operators from each other is their background. PSA is a stevedore and recombines its FSAs into new markets by replicating their expertise in terminal operations via mergers and acquisitions of existing terminals or expansion by building new terminal facilities (Notteboom and Rodrigue, 2012). This was also what was found in the within-case analysis of PSA where they had a preference for joint ventures and acquiring a 20 per cent stake in rival terminal operator Hutchinson Port Holdings, the second largest terminal operator behind PSA. DPW has other reasons to internationalize, they see their expansion as an asset class and for revenue generation potential by financial interests. This could be confirmed by their major acquisitions of CSX World in 2005 and P&O in 2006, which made DPW, in two years’

time, the fourth largest terminal operator of the world. For APMT, as a Maritime Shipping Company, invested in port terminal facilities supports the core maritime shipping business. This was mainly the task of APMT till 2002 where it became a sister company of Maersk-Line. Since they are a standalone company the investments are slightly different from the sailing routes of Maerk-Line, although APMT still covers over 61 per cent off ports Maersk-Line calls.

Table 7: Terminal Operator Typologies and their core Firm Specific Advantage Terminal Operator Typology Firm Specific advantage Transferability PSA International Stevedore International service level benchmark High Dubai Ports World Financial Holing Exporting efficiency and customer service know- High how APM Terminals Maritime Shipping Core expertise in the development, construction High Company and operation of ports.

Source: Angenietje Temme (2015)

For terminal operators the location specific advantages play a huge role in the internationalization and thus recombining their FSAs with LSAs is crucial. In other words an important factor for terminal operators’ internationalization is the potential increase in the valuation of the terminal asset, because it is strongly related to the demand and supply profile in the region. Terminal assets are typically value higher when located in markets with a high growth potential and high terminal capacity utilization (Notteboom and Rodrigue, 2012). For all three terminal operators this is confirmed by looking at their total internationalization pattern. In some cases the location advantages are valued low at this time, because at this moment this location has no high terminal capacity and not stated yet that there is growth potential. This does not mean there is none. In the case of APMT there is a pattern, after 2000, towards the developing world, and thus it is not surprizing that the volumes in TEU are not that large at this moment. The reason for APMT to invest in these countries, for example in Africa and South America is according to the head of business development for the Middle East and Africa, Hans-Ole Madsen that “Africa’s attraction is that it is relatively early on in its development cycle”. Therefore African countries do have growth potential just like terminals in South American countries. Latin America is seen by APMT as a key growth market (APM Terminals, 2011) although they are sometimes valued low in this study. The above already gives a first insight of terminal operators’ internationalization. Traditionally there are several stages proposed in the literature for internationalization. A typical 52

establishment chain could begin with occasional exports, develop into regular exports through agents, followed by setting up sales subsidiaries, and end with fully-owned production facilities abroad (Johanson and Vahlne, 1990). The second aspect is that firms are likely to enter foreign markets with a progressively greater “psychic distance” (Davidson, 1980). Therefore neighbouring markets seem to be preferred in the beginning, as geographical proximity is supposed to imply cultural proximity (Davidson, 1980). In the case of terminal operators they leapfrog these stages and immediately expand through joint ventures, acquisitions or greenfields. The three terminal operators expended each differently see table 8. Where PSA and DPW started from their home country, APMT emerged from its sister company Maersk-Line and therefore had in the beginning a strong pattern with the shipping routes of Maersk-Line. APMT’s first terminal was in Tacoma, US under Maersk, the first terminals under the APMT flag in 2002 where Shanghai, China and Tema, Ghana. For that reason table 8 has split these first investments from each other to get a better understanding of this company. Looking at the first five cross border investments of PSA and DPW they are all quite close to home. At first glance not in the physical distance but they are moving into markets thy can most easily understand, except for AMPT. In both the Maersk beginning as in its current form, Maersk, after two relatively close investments, went rapidly distant and came back for its last expansion to Rotterdam, The Netherlands. This weakens the argument that the lack of knowledge of foreign markets is a critical restriction to international expansion and therefore market-specific and general knowledge could deeply affect firms’ internationalization (Johanson and Vahlne, 1977), since it did not for APMT. This could be the case since Maersk-Line was still APMT’s biggest client and therefore there where shore to make money wherever they would go. After the expansion into Rotterdam APMT became an independent company in 2002. For APMT, also when it became a standalone company under the A.P. Moller Maersk group, it expanded only in distant countries, with only a few exceptions like a greenfield at Rotterdam that opened in 2015. Therefore it is against the prediction that MNEs start their internationalization by moving into those markets they can most easily understand, entering more distant markets only at a later stage (Benito and Gripsrud, 1992). In the case for the first five investments of DPW it is true. Their first terminals in distant location where acquired through CSX Wold in 2005 and in 2006 by P&O. This suggest that DPW was not able to recombine its FSA at the host location, most likely due to the fact that it is a state owned company from the Islamic world. In 2006 when in acquired P&O the

Table 8: First five and last international expansions PSA International Dubai Ports World APM Terminals/ Maersk APM Terminals

Home Location Singapore Dubai Copenhagen, Denmark1 The Hague, The Netherlands First investment Year of Entry 1996 2000 1975 2002 Location Dalian, China Jedda, Saudi Arabia Tacoma, USA Shanghai, China

Distance 4,559 1,669 7,879 8,939

Entry Mode Minority JV Concession Acquisition JV

Commitment L H H M Second investment Year of Entry 1999 2000 1975 2002 Location Italy Djibouti Algeciras, Spain Tema, Ghana

Distance 10,059 2,008 1,879 5,182 Entry Mode Acquisition JV Greenfield JV

Commitment H M H M

Third investment Year of Entry 1999 Opened in 2003 1995 2003 Location Sines, Portugal Vizag, India Laem Chabang, Thailand Dalian, China

Distance 11,896 3,370 9,319 8,238

Entry Mode Concession Greenfield JV JV

Commitment H H M M

Fourth investment Year of Entry 1999 Opened in 2003 1998 2004 Location Pipavav, India Mundra, India Salala, Oman Aqaba, Jordan

Distance 4,128 1,490 5,834 8,238

Entry Mode Minority JV Acquisition JV JV

Commitment L H L M

Fifth investment Year of Entry 1999 2003 1998 2004 Location Fuzhou, China Constanta, Romania Cononou, Benin Xiamen, China

Distance 3,214 4,730 5,092 6,645

Entry Mode JV Concession Greenfield JV

Commitment M H H M Last investment Year of Entry 2014 2009 2000 2014 Location Jakarta, Indonesia Santos, Brazil Rotterdam, The Netherlands Namibe, Angola

Distance 907 12,236 20 7,529

Entry Mode JV Acquisition Greenfield JV

Commitment M H H M

1 The distance is measured from The Hague, The Netherlands 54

portfolio held also multiple terminals in the United States (US). This deal sparked an outcry in Congress, where some members said they had concerns that an Arab-owned port operator could expose the US to Middle Eastern terror groups. Bowing to political pressure, DPW promised to sell its US operations by October (AFX International Focus, 2006). Although it still weakens the argument that the lack of knowledge of foreign markets is a critical restriction, since they had acquired the US ports in the first place. Moving up into closely related countries and later into more distant markets seems also the case for PSA at first. For PSA the first five investments, only the acquisition of two Italian terminals look out of order and their sixth investment was again a European acquisition of Belgian Hesse Nord Natie, which owned five terminals in the port of Antwerp. Although both Italy and Belgium are European countries they have very different institutional frameworks. In 2007 the global head of corporate affairs and human resources Caroline Lim looked back and said: “as the company began to expand overseas, it also had to learn how to deal with foreign governments, port authorities, unions and communities.” Therefore it can only partly be argued that PSA tried to reduce risk and uncertainty by investing in the markets they are linguistically, psychologically and culturally familiar with (Hakanson and Ambos, 2010). However it strengthens the argument, in all three cases, that the institutional conditions have a significant influence on the adoption of specific strategic decisions in any given context and therefore there are firms that undertake foreign ventures despite their lack of overseas experience (Forsgren, 2002; Rugman and Verbeke, 2008). Continuing with this argument, there can be found a pattern in each of the terminal operators concerning their strategic decisions and how to overcome their lack of overseas experience. Looking at the total portfolio’s of these companies, PSA mostly internationalize through joint ventures, DPW takes different entry strategies. For both PSA and DPW there is pattern found that when they are moving into those markets they can most easily understand they use joint ventures and when that is not the case they use acquisitions. Whereas APMT uses high commitment entry strategies like acquisitions and greenfields in markets they most easily understand and if that is not the case they use in most of the cases joint ventures. The underlying argument could be that APMT is from the so called developed country and PSA and DPW are from developing countries and both are, through their mother holding, state owned. And therefore even if these two terminal operators invest in locations in markets they most easily understand these are developing countries. In developing countries the benefits may arise due to structural market 55

imperfections raised for example by government regulations (Rugman et al. 1985) and thus investing through, for example, a joint venture could be the only way of entering that location due

Figure 6: Geographical diversification of the Terminal Operators

Source: Notteboom and Rodrigue (2012) to these governmental regulations. In the data this can be seen very clearly in the investments, of all three terminal operators, in China. These differences in local institutional factors and the degree of openness of the local terminal market might imply that some terminal operators are very visible in one market and lagging behind in another (Notteboom and Rodrigue, 2012). This is for all three terminal operators the case. PSA has the smallest global footprint and is absent in Australia and Africa, DPW in the US and APMT in Australia. This confirms the challenge for the terminal operator to develop relationships with national or local governments or through networks in a form of LB FSAs with powerful local actors to open up access to the desired LSAs (Rugman, Verbeke and Nguyen, 2011). Ms Fu, CEO for Southeast Asia and Japan of PSA, gives a nice illustration of how challenging is to get a foothold in a new market and how embedded the business is in the local (institutional) environment. She argues that the costs of acquiring ports have risen ‘astronomically’. She adds that: “Although many countries are privatizing their ports, the port business is still intrinsically linked to government regulations, especially in areas of Customs and security. While we say we are private operators, we do play a role in contributing to trade development and the promotion of local industries. So we have to actively engage the government where we operate.” Fu (2006)

Engaging governments is not only the case in developing countries but also in developed countries. Governments are involved because of the impact that port activities have on the social, 56

environmental and economic development of the region in which the port is located (Tongzon, Chang, and Lee, 2009). The impact of the social, environmental and economic development of the region of the port is an important factor to the potential increase in the valuation of the terminal asset. For investing in a terminal operation, a critical mass of volume is necessary to be profitable (Financial Times, 2011). If the region has a critical mass of container volume and enough growth potential maritime shipping lines could reorganize their service networks and engage in new partnerships to call a port (Slack, Comtois and Sletmo, 1996). This highlights again the importance of the location and that terminal operators are willing to pay a premium for terminals on a high valued location, like PSA did for a stake in HPH and DPW did for P&O, to get these preferred locations and to gain profits.

5. Discussion This chapter discusses the relationship between the findings of the analysis and the working proposition. The basis of this thesis are the opposition of the arguments of Johanson and Vahlne (1977) and Benito and Griprud (1992). Therefore a brief discussion about these arguments will be given to extend the discussion into the terminal operator internationalization. Ending this chapter with an overview of the working propositions and if these can be supported by the analysis and discussion.

6.1 Core arguments of incremental learning process vs rational choice approach The core of that discussion is that Johanson and Vahlne (1977) argue that there stages of internationalization are proposed. A typical establishment chain could begin with occasional exports, develop into regular exports through agents, followed by setting up sales subsidiaries, and end with fully-owned production facilities abroad (Johanson and Vahlne, 1990). In that case firms are likely to enter foreign markets with a progressively greater “psychic distance” (Davidson, 1980) and thus neighbouring markets seem to be preferred in the beginning, as geographical proximity is supposed to imply cultural proximity. The lack of knowledge of foreign markets is a critical restriction to international expansion. Therefore Johanson and Vahlne (1977) argue that market-specific and general knowledge could deeply affect firms’ internationalization. According to Benito and Gripsrud (1992) there is no general tendency to move into more distant countries as gained experience grows, since each decision is made separately based on the type of advantages they seek at the new location. It is the nature of the business that defines the feasible locations and therefore the internationalization process does not manifest itself in a gradual expansion of FDIs into culturally more distend locations (Benito and Gripsrud, 1992). Therefore Benito and Gripsrud (1992) argue that location choices are discrete rational choice, and not a cultural learning process.

6.2 Transferability of a Terminal Operator’s Firm Specific Advantages The Uppsala model suggests that there are stages of internationalization, whereby the potential benefits of exploiting firm specific advantages (FSAs) abroad, need to be weighed against the risks of operating in unknown foreign environments and the costs of learning to do business there (Johanson and Vahlne, 1977). As shown in the analysis terminal operators mentioned to transfer their FSAs internationally and leapfrogged all stages making foreign direct investments as their first step of internationalization. Within fifteen years the analysed terminal operators where able 58

to get a geographical diversified portfolio and in the case of APMT and DPW even a global portfolio. Although the FSAs are transferable the core business is not, since the production and consumption cannot be separated it means that the service cannot be exported unlike other soft- services (Mariotti and Mutinelli, 2004; Blomstermo, Sharma and Sallis, 2006) and is thus a location bound FSA, which is an argument for why terminal operators jump in to foreign expansion with joint ventures, acquisitions or greenfield investments as entry modes. Although this rapid expansion seems quite easy, the reason behind the rapid and sometimes quit aggressive expansion, like that of DPW by acquiring two major terminal operations in 2005 and 2006, is that the supply of investment opportunities are not endless. Making it possible to transfer the FSAs it is constrained by institutional factors facing these terminal operators to enter in foreign markets (Olivier et al. 2007). The differences in local institutional factors and the degree of openness of the local terminal market might imply that some terminal operators are very visible in one market and lagging behind in another (Notteboom and Rodrigue, 2012). This is confirmed in all analyses. The pattern shown by the three terminal operators where al slightly the same in the sense that there was not found a gradual expansion FDI pattern into more distant locations. Their pattern showed more a rational choice approach confirming the findings of Benito and Griprud (1992) that companies will expand sometimes moving into more distant locations while at other times moving into locations closer to the home country. Therefore it is more likely that terminal operator internationalization will reflect a rational choice approach when FSAs are international transferable.

6.3 Location Specific Advantages of a Terminal Operator For terminal operators the country is not a specific target but the port is and thus the location of the port. One of the risks is that the CSAs are associated with locating certain activities in particular countries. Terminal assets are typically valued higher when located in markets with a high growth potential and high terminal capacity utilization (Notteboom and Rodrigue, 2012). This can lead for example to maritime shipping lines reorganize their service networks and engaging in new partnerships (Slack, Comtois and Sletmo, 1996). The case of APMT clearly shows how important the Maersk-Line routes and thus ports of call are, since they have more that 61 per cent overlap. Next to that without customers there is no reason to make an investment in a location.

Being able to establish a foothold in a location is not always possible because in some cases legislation makes it impossible to enter a foreign market without establishing links with one or more local partners (Vanelslander, 2008). A pattern is shown in all cases in this regard, where with most of the developing countries 100% ownership is not possible. China is an example that could only be entered with a joint venture with the (local) government. The reason to invest in developing countries is because in those locations a local monopoly position is available and thus seen as an operational value (Notteboom and Rodrigue, 2012). These locations are at first sight not valuated as high due to the fact that they are at this moment lower volume markets. Companies that are profit driven, like PSA, DPW and APMT, are particular attracted to places where a local monopoly positon is available, in these developing countries other terminals have not seen the opportunity yet, what makes it a posible valuable location in the longer term. The traditional internationalization path is to invest in just a few neighbouring countries, according to a sequential and cautious process based on a ‘learning-by-doing’ approach (Quin, 1980). In all three cases the terminal operators have acquired, or invested in other high commitment entry modes, in distant countries where they had no experience. In the view of Johanson and Vahlne (1977) this type of entry modes will not be advised when entring countries when there is no experience yet. However it fits the argument of Benito and Gripsrud (1992) that the internationalization process does not manifest itself in a gradual expansion of FDIs into culturally more distant locations because the nature of the business defines the feasible locations. Therefore the investment by terminal operators is more likely to resemble a reational choice approach to internationalization when LSAs are available for recombination with FSAs.

6.4 International Experience of a Terminal Operator In the view of Johanson and Vahlne (1977) the lack of knowledge of foreign markets is a critical restriction to international expansion. They argue that market-specific and general knowledge could deeply affect firms’ internationalization. Consequently the experience and the knowledge that comes with operating in a foreign country generates foreign venture opportunities since the company has learned from the previous experience (Johanson and Vahlne, 1990). The psychic distance would have therefore a stronger influence on firms during the early stages of international expansion. As already mentioned above all three terminal operators leapfrog the experience argument. Where PSA and DPW did build their experience in their home country and first

internationalized in related countries only their expansion in a greater physic distance was done through acquisitions. Since there are three types of terminal operators who pursue different strategies the background of their experience also differ. PSA is the only firm that cannot rely on the experience of the global strategy of its mother company, unlike with DPW or APMT who can lean on the experience of its sister company. Looking at the speed of investments starting around the year 2000 till now, and the geographical different investments sometimes made in the same period can hinder the firm from experience and knowledge in the unfamiliar contexts (Qian et al., 2010). The reason is that diversification in the same geographic region makes accumulated learning possible and more efficiency benefits due to the likelihood of having greater managerial control on the costs associated with cross-border activities (Johanson and Vahlne, 1977; Qian et al., 2010). Due to the lack of pattern in the internationalization of the examined terminal operators there is not found a general tendency to move into more distant countries as gained experience grows. Therefore the argument of Benito and Griprud (1992) can be confirmed that each decision is made separately.

Table 9: Results Working Proposition Description Results WP 1a The greater the degree of international transferability of terminal operator Supported FSAs, the more likely the internationalization will reflect a relational choice approach. WP 1b The lower the degree of international transferability of terminal operators Not Supported FSAs, the more likely investments will resemble an incremental learning process to internationalization. WP 2a The greater the degree of location specific advantages available for Supported recombining with terminal operator FSAs, the more likely investments will resemble a rational choice approach. WP 2b The lower the degree of location specific advantages available for Not supported recombining with terminal operator FSAs, the more likely investments will resemble an incremental learning process to internationalization WP 3 The greater the international experience of a terminal operator, the more Supported likely investments will resemble a rational choice approach to internationalization Source: Angenietje Temme (2015)

6. Conclusion This thesis focused on the internationalization of terminal operators and asked if the rational choice (Benito and Gripsrud, 1992) approach or the incremental learning process (Johanson and Vahlne,1977) explained the internationalization pattern. Derived from the analysis and the discussion, it is shown that when there is a greater the degree of international transferable FSAs the terminal operator is more likely to use a rational approach for their internationalization. In all three cases their core FSA was highly transferable that resulted in large global portfolios. The availability of location specific advantages for recombining with the terminal operator FSAs was less clear. The internationalization pattern of the three terminal operators where slightly different and the institutional factors far more important than expected. At first sight there was for PSA no clear pattern, while DPW firstly invested in close countries in the sense of geographical location and also familiar markets and thus showed at first a more incremental learning process. Due to their large acquisitions in 2005 and 2006 leading to a global portfolio at once, together with their terminal operator type as a financial holding, the rational choice approach fits fare more better to DPW. APMT had a very clear rational choice approach, since their locations, very strong in their Maersk beginning, where following the pattern of the ports that Maersk-Line called. Later when they became their own company their path became even more rational by investing mostly in developing countries. APMT already invested in their first five foreign expansion in distant countries where they had no experience. This has the same argument as with the recombination, they knew Maersk-Line would be their customer so they knew they would have at least one customer. So even without experience APMT internationalized through a rational choice approach. For PSA as a stevedore this was slightly different and the same goes for DPW. Both are from developing countries and in the beginning they followed a more incremental learning process. Both where highly experienced terminal operators before they went cross borders. Their lack of experience in the developed world they compensated with acquisitions and thus high commitment investments what shows a rational choice approach. Making high commitment investments in countries where there is no experience seems odd and against the argument that the lack of knowledge of foreign markets is a critical restriction to international expansion (Johanson and Vahlne, 1977). Due to the fact that both terminal operators are from developing countries they have no knowledge of developed countries. In developed countries the institutional environment has less market imperfections and thus less risk making a high commitment investment a suitable 62

option. Therefore it can be stated that that the rational choice approach explains the internationalization of terminal operators for the largest part although there are small hints of an incremental learning process.

6.1 Scientific relevance and managerial implications This thesis contributes to the internationalization debate by viewing the two most known and opposite theories. That of the internationalization process derived from the Uppsala model by Johanson and Vahlne (1977) and the critique of Grupsrud and Benito (1992) who argue that internationalization is a rational approach. Therefore the internationalization of the three largest terminal operators (based on their equity) are viewed. The industry of terminal operators is highly international and only emerged around the year 2000. These three larges terminal operators had all different backgrounds what made the discussion if the internationalization resembles a learning process or a rational choice approach more interesting. This thesis proven terminal operators select their host location very carefully and combine there FSAs with their strategy, targeting different locations and different types of investments. Since all three terminals are part of larger group entities it is most likely that the internationalization of the other firms of the group will internationalize in predominantly the same way. Interesting finding was that terminal operators from developing countries invested in the same way as terminal operators from developed countries. Due to carefully analysing the internationalization pattern of the three cases it is proven that terminal operators resemble a rational choice approach of internationalization. In the study of Benito and Griprud (1992) one of their limitations was that they could not confirm if the internationalization process was inadequate in interpreting the location decisions of large multi-firms that have been operating internationally for a long period of time. In the case of APMT their assumption, that the emergence of such firms would make it even less likely that more recent data would support the process model, was confirmed. Since all three terminal operators are part of larger group entities, although PSA’s and DPW’s groups are younger then the group of APMT, this thesis did not support the internationalization process model of Johanson and Vahlne (1977). The managerial relevance lays in that they have to carefully analyse their portfolio and what it is that they seek in the location. It is shown that governmental regulations play a large role

in the ability to get access to the preferred location. Although this thesis shows a rational choice approach of internationalization the importance of incremental learning should not be neglected. The insights that this thesis has given could be used as a guidance about what is important when thinking about internationalize the company or set a step into a location where there is no experience.

6.2 Limitations and Suggestion for Future Research The discussion about internationalization and if it resembles a incremental learning process or a rational choice approach is not new. The first discussion was started by Benito and Gripsrud (1992). The approach and analysing the data of terminal operators is new, so there are some limitations for this thesis. First of all, the exclusive focus on terminal operators and the small sample of companies, does not allow the findings to be generalizable for the whole population of MNEs, rather the study uses analytical generalization (Yin, 2003). The analytical generalization could also be harder since terminal operators are service firms and some scholars argue that the expansion logic of service MNEs differs from that of manufacturing MNEs (O’Farrell, Moffat and Wood, 1995; Dicken, 1998). Therefore those differences could have inevitable implications on expansion strategies. The selected time frame of APM Terminals makes the comparison slightly difficult since they emerged from their sister company Maersk, although they functioned as a sister company since 2002. Second, the large portfolios of the terminal operators and the time contains of this thesis it is possible that some terminals are not accounted for. In some cases there was not enough information about a terminal. This information varied from the year of entry till the capacity of the terminal. Both did not jeopardise the reliability of this thesis for the same argument of the large number of terminals that is accounted for and that for as far is known all terminals are included. Thirdly, in this thesis the used literature is from and about companies from the developed world. Since two of the cases are from developing countries it could give new insights on the debate. Another limitation is that this thesis did not view the institutional background of the host locations or the theory that fits cultural distance and other forms of distance then geographical distance. Although this thesis did it best to give some insights but the core was the physic distance. Deriving from these implications looking more into the other forms of distance that are suggested in the theory of the internationalization and could be a suggestion for future research. It

would give a deeper understanding and possibly new insights for terminal operator internationalization as for the internationalization theory in general. Increasing the sample size and also replicate this study with manufacturing firms or other industries would be also an option to overcome some of the limitations to be able to generalize the findings. The last suggestion is to look more into the literature of emerging markets this could also give new insights to the discussion and a better understanding of terminal operators from developing countries.

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Appendix 1

High/ Geographical Capacity moderate/ distance in in ‘000 Year of low Terminal Location km TEU Host LSA entry Entry mode commitment Supporting Quote(s) Dalian China 4,559 5.0 mio Favourably loated at the entrance 1996 49% stake M The joint venture, in which PSA holds a Container of Bohai Rim, serving as the Joint-venture 49 per cent stake, was granted the right Terminals gateway to Northeast China and Anno 2015 of first refusal on the development of hub port to the Bohai Rim. 20% container terminals in the city, according to Dalian Port's listing prospectus. That means Dalian Port is obliged to make an offer to Dalian Container Terminal for any potential port projects in the city.

Venice Italy 10,059 420,000 This is the main container 1998 Acquisition H VeCon (Venice Container Terminal), Container facility of the Port of Venice. It which is controlled by PSA. Terminal is the natural gateway between Singapore.Welcoming the investment the rich cargo hinterland of VeCon and stressing that "the PSA and Northeast Italy and the East its partners confirmed the continuing Mediterranean/Middle and Far commitment to ensure an adequate Eastern Markets. The port of response to growing market demands Venice is well connected to the and expectations of its customers in the Trans European rail and read port of Venice. networks, as well as major shipping routes in the Mediterranean. Voltri Italy 1.8 mio Gateway port for shipping lines 1998 Acquisition H Since 1998 VTE is part of PSA Terminal serving the vast hinterland of International. This expansion will add Europa southern continental Europe. important new container handling It is directly connected to the capacity at the Port of Voltri and excellent rail and road strengthen its role as a regional hub port transportation system of Italy, for Italy and the Mediterranean. It is extending to all part of the believed that PSA made several European continent. guarantees to the Genoa Port Authority in order to maintain its hold over Voltri Terminal Europa SpA (VTE) and win Module 6, including an assurance on amount of cargo handled annually.

High/ Geographical Capacity moderate/ distance in in ‘000 Year of low Terminal Location km TEU Host LSA entry Entry mode commitment Supporting Quote(s) PSA Sines Sines, 11,896 1.7 mio Sines is a deep-water port 1999 Concession H PSA has invested 225 million Euro’s at Portugal strategically located at the cross the deep-water terminal since it started roads of the north-south and its operating concession in 1999. east-west shipping lanes, offers a PSA International is investing 40 million unique opportunity for the euros ($42.5 million) to boost the annual successful development of a capacity of its container terminal in best-in-class container terminal Sines, Portugal, to 2.5 million TEUs. and a regional hub Fuzhou China 3,214 3.6 mio Fuzhou Port is located at the 1999 Joint-venture M The terminals are managed under Fuzhou Terminals centre of the Fujian coastline three Container Terminals (FCT), leveraging along the Taiwan straits. terminals the strengths of its partners PSA and Connected to the hinterland via 1. Fuzhou Fuzhou Port Group to create greater excellent networks, it is well- Qingzhou service excellence for its customers. FCT- positions as a major container Container Jiangyin – comprising FICT and FJCT – hub port to support ongoing Terminal owns concessions for a continuous stretch development of industries and (FQCT) of five linear berths at Jiangyin Port hinterland investments in 2. Fuzhou district. FCT-Jiangyin is capable of South0eastern and western International handling all mega container vessels China. With connected services Container plying the world’s maritime trade routes to the United States, South Terminal today, America, South Korea, Taiwan, (FICT) Southeast Asia, Middle East, 3. Fujian West & South Africa, Hong Jiangyin Kong, Europe, the International Mediterranean; domestic and Container feeder services. Terminal (FJCT)

High/ Geographical Capacity moderate/ distance in in ‘000 Year of low Terminal Location km TEU Host LSA entry Entry mode commitment Supporting Quote(s) Guangzhou China 2,610 1.1 mio It is located in the centre of the 2001 Joint M The Huangpu New Port-Guangzhou Container high growth Pearl River Delta Venture Container Terminal (GCT) is a joint Terminal region. This enables the terminal venture between the Guangzhou Port to better serve the fast growing Group and PSA. And while industry container traffic from both insiders said that PSA is unlikely to steal Guangzhou and southern China. significant volumes from Hutchison, its The Terminal has a well- presence there (Hong Kong) holds developed infrastructure strategic value. network for cargo transportation, collection and distribution. It is connected to a network of highways and rivers and complemented by more than 50 kilometres of dedicated rail links. Cargo from Chongqing, Guangxi, Guizhou, Hunan, Jiangxi and Sichuan are transhipped from GCT to the rest of the world

High/ Geographical Capacity moderate/ distance in in ‘000 Year of low Terminal Location km TEU Host LSA entry Entry mode commitment Supporting Quote(s) PSA Belgium 10,559 12.1 mio The container gateway to 2001 Acquisition H PSA Antwerp is PSA's largest investment Antwerp Europe, with excellent in Hesse outside Singapore… PSA Antwerp transhipment and hinterland Nord Natie operates five container terminals in connections for rail, road barge 1. 50% share Antwerp and is connected to 800 and short-sea vessels MSC destination worldwide through 300 2. 100% regular services. over 80% of containers owned that arrive in Antwerp pass through on of 3. 100% PSA Antwerp's Terminals. owned By acquiring the Belgian operation early 4. 100% 2006, this clearly meant entering a new owned geographical area for PSA 5. 50% share (Vanelslander, 2008; Notteboom and CYKH Rodigue, 2012) With the ink scarcely dry on the agreement to sell Hesse Noord Natie (HNN) to PSA Corporation, the Belgian Parliament has cancelled the construction permit for the new Left Bank container terminal complex in Antwerp (Deur-gancdok), alleging "serious procedural mistakes." PSA Belgium 10,639 1.9 mio The coastal port of Zeebrugge is 2001 H Zeebrugge positioned as a key port for both Acquisition deep sea and shortsea container in Hesse transport with transhipment Nord Natie possibilities to the UK, 1. 100% Scandinavia and the owned Mediterranean/Iberian 2. 65% share Peninsula.

Capacity Geographical of the distance in terminal Host location specific Year of Degree of Terminal Location km in TEU advantage entry Entry mode commitment Supporting Quotes Eastern Sea Thailand 1,347 2.2 mio Leam Chabang Port was 2003 JV M In April 2003, PSA invested in Eastern Laem developed in the early 1990s to Sea Laem Chabang Terminal Co Ltd Chabang facilitate Thailand's long-term (ESCO) which operates Container Terminal economic and trade growth. Terminal B-3 at Laem Chabang Port. Located at Chonburi provice in ESCO also has major stakes in Container the upper Gulf of Thailand, Terminal A-0 and Container Terminal B- 130km's Southeas of Bankok 1. Together, these three terminals have a Laem Chabang Port is now the combined capacity of over 2.2 million key point of entry for Thailand's TEUs. container traffic. Habiki Japan 4,589 1.1 mio Well-situated along the main 2004 greenfield H Taking advantage of the increasing trade Container trade routes between Asia and in the Pan Yelow Sea area between Japan, Terminal the West Coast of North China and Korea, Hibiki Container America. Terminal is poised to provide shippers and shipping lines with a full range of round-the-clock hub service. After criticising the proposal and threatening to block PSA's involvement for months (see WorldCargo News April 2001, p3), Mutsumi Ozaki, chairman of the powerful Japan Harbour Transportation Association (JHTA) said he had agreed to PSA's participation as the majority shareholder in the proposed terminal operating company

Capacity Geographical of the distance in terminal Host location specific Year of Degree of Terminal Location km in TEU advantage entry Entry mode commitment Supporting Quotes Chennai India 2,907 1.5 mio Chennai International 2006 Greenfield H "PSA has always upheld the belief that International Terminals, in Chennai Port, is there is great market potential in India Terminals ideally positioned to tap the high and we will continue to develop our growth Chennai region. Serving existing portfolio of port projects in India an ever growing hinterland and and look for other opportunities to invest catering to the fast growing in the country," said the company automobile, pharmaceuticals, spokesperson. textile, leather, light engineering and chemical manufacturing units, CHennai is the second largest container port in India, with inreasing volumes and several weekly seervices. the region is also steadily emerging as the hub for the Indian east coast. Hutchison China - - Hutchingson Port Holdings is 2006 Acquired a M Hong Kong based Hutchison Port Port one of the top 5 terminal 20% stake Holdings (HPH), whilst remaining the Holdings operators of the world. overall market leader in total volume, Hong Kong is seen as the world's number of terminals and hectares terms, most strategic area to be in to tap holds the second place on an equity TEU the biggest market for the basis, due to the sale of a 20% share in transportation of goods, and the company to Singapore-based PSA hence the operation of Corporation in 2006. PSA is investing container terminals. over $2 billion in Hong Kong port assets, including acquiring stakes in global leader Hutchison Holdings' Hutchison International Terminals (HIT).

High/ moderate/ Capacity Year of low Terminal Location Distance in TEU Host LSA entry Entry mode commitment Supporting Quote(s) Tianjin China 4,417 5.9 mio 2007 JV M 49% stake Terminals PSA Panama 15,646 450,000 PPIT is located at the entrance of 2007/ Greenfield H PSA Panama International Terminal Panama the Panama Canal, on the Pacific 2015 concession (PPIT) started operations in December International side at the former US Rodman increased 2010. One of the most productive Terminal Naval Base. The terminal is the terminals in Latin America. well-positioned to participate in terminal PSA Panama is increasing the capacity the growth of this strategic hub of the terminal from 450,000 teu to two and provides an important port million teu per year. of call for shipping lines “The approvals by the National Assembly handling containers as well as and the Panama Canal Authority are Ro-Ro cargo. Expansion works important milestones for us,” said are scheduled to begin in March Alessandro Cassinelli, general manager, 2015. Completion is expected in PSA Panama. “In the past two years we the second half of 2016 and will have worked closely with the authorities increase PPIT’s annual capacity representing the Panamanian State on the to 2 million TEUs. design and development of the expansion of our container terminal with the purpose of having state-of-the-art infrastructure ready to serve container vessels with a capacity of up to 18,000 teu.” “This project increases the ability of the country to handle additional containers in line with the vision of promoting Panama as the logistics hub of the Americas. In addition, the project opens up new logistics and maritime opportunities for the west bank of the Panama Canal Pacific, making this an important part of the future of Panama and its national logistics sector,” he added.

High/ moderate/ Capacity Year of low Terminal Location Distance in TEU Host LSA entry Entry mode commitment Supporting Quote(s) SP-PSA Vietnam 1,065 2.2 mio Located near the mouth of the 2007 JV/ H PS-PSA International Port (SP-PSA) is International Cai Mep-Ti Vai river with deap Greenfield well positioned to serve the fast growing Port water berths. SP-PSA is poised container traffic of Vietnam and to for strong growth with the become a major hub for Indochina. development of extensive road and inland waterway networks linking it to Ho Chi Minh City and the rest of the burgeoning South Vietnam industrial hinterland. Mersin Turkey 8,087 2.6 mio Mersin's success as a port city 2007 JV M 50% stake Mersin Uluslararasi Liman International contunues today because of its Isletmiciligi A.S. Port proximity to major international markets such as Middle East, North Africa, Mediterranean, Europe, Black Sea and Central Asian Republics as well as to North America and Far East with direct cals that have drawn many businesses to its shores Exolgan Argentina 15,905 1.1 mio Located in Dock Sud- Buenos 2008 JV M Exoglan Container Terminal represents Container Aires, Exologan is the leading PSA international's first foray into South Terminal terminal of the Port of Buenos America. Aires, positiones as the only PSA group chief executive officer Eddie terminal capable of attending 2 Teh said: 'We will work with our partners Post Panamix vessels and the local authorities to capitalise on simultaneaously. The terminal is Argentina's expanding trade with Latin located eight kilometers from the America and the rest of the world.' main city, with uncongested Research firm Global Insights said acces to major highways and rail container trade between Argentina and links. North-east and South-east Asia grew by 26 per cent between 2005 and last year (The Straight Times (Singapore) 12-08- 2007).

High/ moderate/ Capacity Year of low Terminal Location Distance in TEU Host LSA entry Entry mode commitment Supporting Quote(s) ABG India 2,895 2008/201 49% M PSA had acquired a 49 per cent equity Kolkata 5 Stake/buy stake in ABG Kolkata Container Terminal Container out 0% for around Rs 50 crore. Mumbai-based Terminal public listed ABG Infralogistics has bought out the 49 perimn cent equity stake held by its foreign partner PSA in ABG Kolkata Container Terminal Pvt Ltd, formerly known as Cardinal Logistics Pvt. Ltd, according to a stock market disclosure (http://www.vccircle.com/, viewed 01-08-2015, published 09-01-

2015). Pusan Busan, 4,586 2.2 mio The terminal is operationally 2009 Joint M Pusan Newport International Terminal Newport South- tailored to efficiently handle Venture (PNIT), a joint venture between PSA International Korea hub and spoke as well as relay International Pte Ltd (PSA) and Hanjin Terminal transhipment volumes for the Corporation in Busan New Port, South (PNIT) Transpacific and North East Korea, has started commercial Asian trade routes. operations as a Pacific transhipment hub. PNIT took over three berths and equipment from Busan Port Authority on November 2, 2009. Saudi Dammam, 6,375 1.8 mio An important deep water port in 2011 Joint M A joint-venture company, Sauidi global Global Ports Saudi the Arabian Gulf serving the Venture port LLC (SGPC), formed between the Arabia major provincial cities in the public investment fund (PIF) of the Eastern and Central Provinces of kingdom of Saudi Arabia and PSA Saudi Arabia. Dammam is the international (PSA) will develop, operate closest gateway port to the and manage the second container country's economic centre and terminal in the king Abdul Aziz port in capital city, and is linked by an Dammam, a kay gateway on the Arabian existing railway netwerok and Gulf. excellent highways. It is also the largest Gulf port in Saudi Arabia. 82

High/ moderate/ Capacity Year of low Terminal Location Distance in TEU Host LSA entry Entry mode commitment Supporting Quote(s) Sociedad Colombia 19,511 1.4 mio The Sociedad Puerto Industrial 2013 Joint-venture M In September 2013, ICTSI and PSA Puerto Aguadulce S.A. (SPIA) terminal International Pte. Ltd. (PSA) signed a Industral is located in the port of joint venture agreement to develop the Aguadulce Buenaventura, the sole Pacific Multi-User Container Terminal. ICTSI gateway of Colombia, and the and PSA, through their subsidiaries, first port of call for southbound jointly own 91.28 percent of SPIA. shipping services to and from the West Coast of South America. Compared to Colombia’s other ports in the Caribbean, the port of Buenaventura offers the shortest travelling time to Colombia’s “Golden Triangle” - the main cities of Bogota, Medellin and Cali, that together account for about 70% of Colombia’s GDP. From the sea, SPIA is accessed through the newly-deepened channel leading to Buenaventura port. On land, SPIA is better-connected to the rest of Colombia than the older Buenaventura city terminals, with dedicated access to the improved Buga-Buenaventura highway, avoiding the increasingly congested city- centre and Puente El Pinal bridge. The first phase of SPIA is expected to be operational by the end of 2015

High/ moderate/ Capacity Year of low Terminal Location Distance in TEU Host LSA entry Entry mode commitment Supporting Quote(s) Bharat India 3,909 4.8 mio Jawahralal Nehru Port (JPN) in 2014 / Greenfield H "PSA will work along with Jawaharlal Mumbai Mahrashtra, India's largest and operation Nehru Port Trust to develop this very Container premier container gateway. It al early important terminal in India to cater to the Terminals serves the important industrial 2018 increasing demand for container and manufactruing centres and handling capacity, and facilitate maritime cities in Northwest India, as well trade in India," as India's largest hinterland with A wholly-owned company formed a population in excess of 400 by PSA International, was approved by million. the board of trustees of JN port on Wednesday, at least two trustees who attended the meeting said on condition of anonymity. A spokesman for Jawaharlal Nehru port confirmed the decision taken by the board of trustees. Last week, PSA emerged as the highest bidder for the project by quoting the highest revenue share price bid of 35.79%. Ports contracts at union government-controlled ports are decided on the basis of revenue share-the bidder willing to share the most from its annual revenue with the government-owned port gets the contract, according to the port privatization policy of the government (The Business Times Singapore, 27-02-2014).

High/ moderate/ Capacity Year of low Terminal Location Distance in TEU Host LSA entry Entry mode commitment Supporting Quote(s) New Piork Jakarta, 9,07 1.8 Tanjung Priok is Indonesia’s 2014 JV M PT. Pelabuhan Indonesia II (IPC), Mitsui Container Indonesia largest port by container volume & Co, Ltd. (Mitsui), Nippon Yusen Terminal and serves as its main gateway to Kabushiki Kaisha (NYK Line) and PSA One international markets. To International Pte Ltd (PSA) have agreed support the country’s rapid to jointly participate in the construction. container growth and energise The Priok COntianer Terminal One will Indonesia’s international trade, be its first project in Indonesia. “PSA will Tanjung Priok is undergoing leverage on its global expertise and expansion and upgrading. experience in operating container terminals worldwide and in training skilled port professionals to develop NPCT1 into a world-class facility to support Indonesia;s growing economy and facilitate the expanding maritime trade”(Portcalls.com, 2014, viewed 13- 08-2015).

Appendix 2

High/ moderat Year e/ low Capacity of Entry commit Terminal Location Distance in TEU Host LSA entry mode ment Supporting Quote(s) Jebel Ali UAE Dubai 0 19.0 mio Jebel Ali Port operated by DP 1979 Expansions currently underway at the Port will Port World, UAE Region, is the largest bring total handling capacity to 19 million TEU in marine terminal in the Middle East the second half of 2015. and the flagship facility of DP Together with the new Container Terminal 3, Jebel World’s portfolio of over 65 marine Ali Port will reach 19 million TEU capacity in the terminals across six continents. second half of 2015 and will be able to handle 10 Strategically located in Dubai, Jebel of the giant new generation vessels at the same Ali port is at the crossroads of a time – the only port in the region able to do so. region providing market access to over 2 billion people. As an integrated multi-modal hub offering sea, air and land connectivity, complemented by extensive logistics facilities, Jebel Ali Port plays a vital role in the UAE economy. The world’s 9th largest container port plays a vital role in serving the world markets as a premier gateway for over 90 weekly services connecting more than 140 ports worldwide. South Jeddah, 1.699 Crucial link in the world's busy east- 2000 Concessio DP World has invested considerable resources, Container Saudi Arabia west trade routes through the Red n both financial and in terms of expertise, to bring Terminal Sea and catering to a rich domestic the terminal to international standards in the cargo base. Jeddah Islamic Port is handling of the new generation of mega the main import destination for containerships. SCT at Jeddah Islamic Port is Saudi Arabia, handling 59% of its currently the largest port privatization project in imports by sea and serving its main Saudi Arabia. commercial centers.

High/ moderat Year e/ low Capacity of Entry commit Terminal Location Distance in TEU Host LSA entry mode ment Supporting Quote(s)

Doraleh Te Djibouti 2.008 Just 11 km south of the Autonomous 2000 JV DP World and the Djibouti Government Container Port of Djibouti, DCT enjoys the established a joint venture, with the signing of a 20 Terminal same strategic location at the year concession to operate the Port of Djibouti. crossroads of the main shipping That successful partnership led to the joint venture lanes connecting Asia, Africa and investment in the newly developed Doraleh Europe. The port lies on the major Container Terminal. east-west trade route with minimal deviation and provides a secure hub Through its modern logistics facilities and within the region for transhipment strategic location, Doraleh is well placed to and relay activities. become the premier container distribution hub for the region. In addition, a new free zone is planned which will greatly contribute to increase port traffic in the future.

Visakha Vizag, 3.370 600,000 Visakha Container Terminal Opened JV The terminal opened in June 2003 and has Container India (VCTPL) is a deep-water gateway in 2003 attracted strong interest and support from many Terminal terminal on the Bay of Bengal coast shipping lines and feeder operators. (VCTPL) of India, between Chennai and Visakha Container Terminal, which has been Kolkata. The port therefore provides running the existing container loading facility at excellent established marine access Vizag port since June 2003 on a 30-year contract, and an existing proven network of is 74% owned by United Liner Agencies. DP hinterland connections. The World, majority owned by the Dubai government, container terminal has superb rail owns the balance stake in Visakha Container and road connections to the Terminal hinterland, with the unique advantage of being the only terminal on the east coast with an on-dock rail facility. VCTPL is an ideal hub port for Bangladesh and Kolkata/Haldia cargo and presents a cost-effective solution to many Indian importers and traders as it is able to offer superior transit times to and from the burgeoning Far East markets.

High/ moderat Year e/ low Capacity of Entry commit Terminal Location Distance in TEU Host LSA entry mode ment Supporting Quote(s)

Mundra Mundra, 1.490 1.4 mio Strategically located at Mundra port Opened 100% DP World has a 100% equity stake in the facility International India in the State of Gujarat, it is the in 2003 equity and executes full operational control of the Container closest gateway to the largest cargo stake terminal. Terminal generating regions of North and Pte Ltd Northwest India, and has the ability MICT won the 2007 Economic Times Gujarat (MICT) to handle some of the deepest Logistics Award for the "Best Container Cargo container vessels to today. Sea Port". Like all other terminals within DP It has no tidal restrictions and is well World's portfolio in the subcontinent, MICT is an connected by road and rail with links ISPS-compliant ISO 9001, ISO 14001, OHSAS to all the major cargo centers in the 18001 and ISO 27001 certified and recently northwest hinterland. MICT has an obtained ISO 28001 certification for supply chain on-dock rail yard with rail loading security management. facility and inherent advantage of being the nearest port to the Northern hinterland, India's fastest growing region in terms of container traffic.

Constanta Constanza, 4.730 1.3 mio The terminal is acknowledged to be 2003 concession in 2003, it clinched another contract to operate a South Rumania the Black Sea's premier container new terminal at Constanta in Romania. Container terminal, serving both the Romanian n November 2003, DP World was awarded a long- Terminal domestic market and a wider term concession to operate Constanta South (CSCT) hinterland spreading into parts of Container Terminal (CSCT) SRL, a state-of-the- Central Europe, together with first art facility with excellent deep-draft access located class feeder connections to the near the entrance to Constanta port. Ukraine, Russia, Georgia & Moldova. The port's geographic location has also proved ideal as a reliable transhipment hub for the greater Black Sea region.

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DP World Maputo 6.207 400,000 Located on Africa's South Eastern 2003 60% JV M Maputo container Terminal was privatized in 2003 Maputo Mozambi- coast is a gateway to Southern DP World holds the concession (2008) to operate que Africa's vast economic hinterland. the container terminal at Maputo Port and is The port plays a major role in already a 60% shareholder in Maputo International linking regional production, mining Port Services (MIPS), the container terminal and commercial hubs to the markets operating company, with the Mozambique Ports of South East Asia. The port, which and Railways Company holding the remaining is almost entirely focused on origin 40%. The terminal has 100,000 TEU (twenty-foot & destination throughput, serves as equivalent container unit) capacity. the main shipping terminus for land- Container Operations will be extend as Phase 1 locked regions of Southern Africa expansion to include berths 15 and 16 by 2013, such as Gauteng Province, which will increase the total quay length to 600 m Swaziland, Botswana, Zimbabwe of quay and increase the capacity to 400,000 TEU. and Malawi. Pusan, 7.025 5,5 mio Pusan is situated on the south eastern 2005 25% L In particular, CSX WT has a 25% interest in, and South-Korea most tip of the Korean peninsula and interest ex will be the operator of, Pusan Newport, South is Korea's leading port city and CSX Korea, a 9-berth facility with a capacity of 5.5 gateway to the Pacific Ocean. Its million teus that is currently under development strategic position makes it an ideal and is expected to commence operations in 2006. key transshipment hub in the North The company is due to finish construction this year East Asia Region. (2006) on a new terminal at the Korean port of Pusan Newport Company (PNC), a Pusan, the world's third-largest container port. DP joint venture led by DP World World won rights to run that terminal for the together with Samsung, Hanjin next 30 years. Heavy Industries and Construction The terminal is a state of the art facility and is and a number of other Korean directly linked to both road and rail to Seoul and construction companies, several other industrial areas throughout the commenced operations in 2006. country. Advanced container handling equipment, automated gates, integrated terminal operating systems plus a dedicated team ensures second to none efficient and reliable terminal services.

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DP World Brisbane, 11.997 DP World Brisbane's facilities are 2005 Ex CSX As part of the lease renewal of 20 years with a 20 Brisbane Australia located on the mouth of the Brisbane year option, and to cater for future growth, DP River. The Port of Brisbane is the World Brisbane have committed to a major largest port in Queensland and investment program, with the most significant presently the fastest growing port in investment a change of mode at the terminal. The Australia. change of mode will make more effective and efficient use of terminal space. Port of Tianjin, 5.917 Tianjin Port, the largest man-made 2005 Ex CSX The port facility includes a 5 km squared Free Tianjin China sea and river port in mainland China, Trade Zone within the port area, which is located to the west of Bohai Bay, transformed Tianjin into an important transport in the Pacific Ocean. The port is an hub as well as an industrial centre. The main important link in the transportation industrial sectors in the area include petrochemical system connecting Beijing, Tianjin industry, textiles, car manufacturing and and Hebei Province. mechanical industries. Tianjin Port is only 160km southeast of Beijing and forms a natural catchment area for economies based around the capital city. Yantai Yantai, 6.306 Yantai, situated on the southern 2005 JV Yantai International Container Terminals Ltd International China coast of the Bohai Sea, is the second Ex CSX commenced operations in November 2003 as a Container largest industrial city in the joint venture between DP World, China Shipping Terminals Shandong province. Well and Yantai Port Group. Ltd established road and rail DP World provides the terminal facility with infrastructure connect the port of operational management, global sales and Yantai with the economic center, marketing and the industry expertise necessary to where foreign trade cargoes such as establish it as a state-of-the-art container terminal. fertilizer, iron ore, cement and coal Complementing the port is a contiguous export dominate the traffic volume. processing zone for warehousing and a logistics park.

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DP World Santo 12.371 DP World Caucedo is located 2005 JV ex CSX M This Terminal is a private joint venture state of the Caucedo Domingo approximately 30 minutes from art container facility. Recently DP World Dominican Santo Domingo, capital of the expanded its facilities with 300 meters of Republic Dominican Republic and near to the additional berth, it now offers three deep water International Airport, Free Zone berths, with a total length of 922m. Parks and Logistics Centers. The DP World Caucedo holds a number of security Terminal facility, benefits from accreditations; it is certified by the ISO/PAS space allocated for future 28000 security standard and is a member of the developments, which includes an Customs-Trade Partnership against Terrorism (C- additional berth expansion and the TPAT) initiative by US Customs and Border Caucedo Logistic Centre Patrol. immediately adjacent to the terminal. DP World Melbourne, 12.454 Melbourne's port operations are 2005 100% Following the increase in our ownership of Melbourne Australia located at the north of Port Phillip ownership Adelaide to 100% early in 2008, we are in Bay, approximately 3 kilometres Ex CSX discussion with the port authority and are from the central business district. confident of agreeing a successful extension of the The Port of Melbourne is the largest concession, ensuring continued investment into commercial port in Australia, a the port operations to increase much needed modern growth port that is presently capacity to meet the growth of trade in Australia. undergoing some significant A large part of DP World Melbourne’s expansion improvements. A channel deepening commitment is the development of the adjoining operation was completed in 2009 West Swanson intermodal terminal site. giving access to vessels with draughts of up to 14 metres. Terminales Buenos 13.672 750,000 Terminales Rio de la Plata (TRP) is 2005 55.62% JV M TRP's facility, a joint venture in which DP World Rio de la Aires, located in the heart of downtown ex CSX owns 55.62%, Plata Argentina Buenos Aires. TRP is the largest container terminal in Argentina and The terminal handles deep-sea vessels from additionally handles general cargo Europe, Asia and North America, as well as and cruise vessels. feeders to both the East and West Coast of South America and barges upriver to Rosario.

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Hong Kong Hong-Kong 5.950 Hong Kong, located on China's 2005 Ex CSX CT3 is a Hong Kong registered company managed CT3 China south coast on the opposite site of World by DP World. Operating since 1973, the DP World the Pearl River delta, is surrounded facility has historically been one of the most by the South China Sea on the east, productive terminals in Hong Kong, vital for CT3 south and west and borders given its limited capacity. CT3's volumes have Shenzhen to the north. Two km from been growing fast and the terminal is providing the sea-buoy, located in the heart of necessary service to support its customers' Hong Kong's Kwai Chung port, lies expansion needs. The terminal's facilities are Terminal Berth number three. complimented by the ATL Logistics Center, the world's first and largest intelligent multi-storey drive-in cargo logistics center. DP World Cochin, 2.797 6,5 Cochin Port is located next to the 2005 Concessio H In 2004 DP World won the concession to operate Cochin India East-West trade route, only eleven n the Rajiv Gandhi Container Terminal and to nautical miles from the direct develop the International Container Middle East - Far East sea-route. No Transshipment Terminal at Vallarpadam. other Indian port enjoys such a Since the official handover in April 2005, DP strategic geographic proximity to World's operational expertise has significantly the major maritime sea routes. DP improved efficiencies. Investment in quayside and World Cochin serves as the natural yard-handling equipment has been focused on gateway to the vast industrial and improving productivity. agricultural produce markets of the In February 2011 Vallarpadam terminal in Cochin, South & West of India. The India officially opened. hinterland of the port includes the state of Kerala and parts of Tamilnadu and Karnataka. Improved road and rail connectivity have substantially reduced the transit time and logistics cost making Cochin Port a preferred gateway for exports & imports from/to the hinterland.

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DP World Kocaeli 4.031 1.3 mio DP World Yarimca will be one of 2005 Greenfield H The terminal will be 100% owned and developed Yarmica Turkey the biggest container terminals in by DP WORLD. First international terminal Turkey. The new container terminal operator in the region will be built in Kocaeli city Körfez district. Total area of the terminal will be 46 hectares.

The state-of-the-art terminal will enhance the economy in the region and in Turkey through the supply chain efficiencies that it will create. Qingdao Quingdao 9.890 6.7 mio Tapping into a strong export trade, 2005 29% JV L 29% owned Joint Venture. Partners: Qingdao Port Qianwan China Qingdao, one of the main cities in (Group) CO., LTD (31%), APM Terminals (20%), Container the eastern Shandong provinces in COSCO Pacific (20%). Terminal China, has developed into one of the Concession expiry date: year 2034 Limited major seaports in the country. (QQCT) QQCT is located on the western bank of Jiaozhou Bay, inside the Economic & Technology Development Zone and next to the Bond Area. The terminal is only 68km away from Qingdao city, connected through the Jiaozhou Bay Expressway. The facility offers excellent road access with Jinan- Qingdao highway, Yantai-Qingdao Highway and 308 National Highway connecting outside cities, and has efficient rail links with the Jiaozhou- Huangdao Railway inside the terminal and Jiaozhou-Jinan Railway going outside.

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London London, UK 5.478 1.6 mio/ Located at the heart of the country’s 2006 Ex P&O H In March 2010 the major work starts at DP World Gateway 3.5 mio largest consumer market just 10 London Gateway. miles from the M25 motorway, The port is now operating with its first berth open. London Gateway’s highly efficient When fully developed it will be able to handle 3.5 road, rail and sea links offer a million TEU a year and is forecast to create 36,000 quicker, cheaper and more jobs, contributing GBP 3.2bn to UK GDP annually environmentally friendly way to transport goods to their destination.

Kulpi Kulpi/ 3.370 650,000/ A multi-product Special Economic 2006 Greenfield H Kulpi Port project as part of its acquisition of P&O Kalkutta 1.3 mio Zone spread over 1040 hectares and ex P&O in February 2006. India a greenfield container terminal on The first phase will have a 450-m quay and a the east bank of River Hooghly handling capacity of 650,000 teu. nearly 60 km south of Kolkata, DP World has a 40-year concession for Kulpi Port. India. The second phase will add 450 m of quay and increase container-handling capacity to 1.3 million The port will have 8.5 mtrs draft teu. alongside with broad tidal windows and will ultimately have 900 mtrs quay line and 34 hectares of paved yard. The port will be connected to the National Highway network of the country through a new 4-lane expressway and a new bridge across the river, both of which are being developed by the state government. DP World Sydney, 12.067 Located in Botany Bay in Sydney's 2006 Ex P&O DP World has a long term commitment to its Port Sydney Australia East, is only 12 nautical miles from Botany facility and has embarked on a capital Sydney Harbour. The terminal is investment program to ensure that terminal ideally located for speedy and facilities and equipment are of world's best convenient transport of cargo standard. There has also been significant capital anywhere in Sydney, spent on new and additional yard equipment to manage the continuing port growth.

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DP World Fremantle, 9.051 Fremantle is the principal port of 2006 Ex P&O DP World Fremantle operations are in line with Fremantle Australia Western Australia, situated at the global environmental and safety standards and mouth of the Swan River on the terminal security is managed in compliance with western coast of Australia. maritime transport security regulations. The Fremantle is a key Australian port potential growth of this market and DP World's providing access to the ever commitment to this region has resulted in expanding western cities and to the continued capital investment to cater for the future many mining communities in the market needs. West. Western Australia is the perfect location for coastal and transhipment cargo, providing a key link between the Australian eastern ports and Asian hubs such as Singapore. DP World Southampto 5.555 Ideally location to be the first or last 2006 51% JV M Nominated as the UKs No.1 performing terminal Southampto n UK European port of call, Southampton Ex P&O by the Journal of Commerce in 2013, DP World n is only two hours steaming from the Southampton offers its customers high international shipping lanes of the productivity rates and ability to turn vessels English Channel and 100 nautical around quickly and efficiently. miles from mainland Europe. DP World Southampton is a joint venture terminal DP World Southampton’s customers between DP World (51%) and Associated British are offered: Easy access to the major Ports (49%).s UK consumer markets Berthing for the largest container ships currently afloat at over 500m in length 16 quayside cranes with state-of-the-art super post panamax capability - 24 boxes wide. Accessibility for the largest and deepest vessels - Dredged to 16 metres, Southampton can further deepen its berths to 17 metres to meet future demand. DPW Vancouver, 11.743 Located in the inner harbour of 2006 Ex P&O DP World Vancouver continues to be a leader in Vancouver Canada downtown Vancouver, and is a key 100% the application of advanced technology with GPS gateway port for the Trans-Pacific stake tracked RTG along with Optical Character 95

Trades between Asia and the Pacific Readers (OCR) being introduced at the truck gate, North West. In addition to serving rail gate and gantry quay cranes. In 2007. the local market for British Columbia, DP World Vancouver provides direct daily intermodal rail connection to the important markets of Eastern Canada and the US Mid- West, covered by both Canadian Pacific (CP) and Canada National (CN) railways. Laem Laem 4.958 LCIT has excellent road and rail 2006 Ex P&O L Laem Chabang International Terminal (LCIT), a Chabang Chabang transport links to and from the JV 35% joint venture container terminal in which DP International Thailand terminal and is the link between World owns 34.5%, is located on the Gulf of terminal terminal, road and rail in Bangkok, Thailand, approximately 120km from Bangkok, with rail access ideally situated the capital city of Thailand. The terminal, which behind the container terminal. Other serves as a gateway for containerized goods to and facilities such as container parks and from the key Asian markets, is within close packing/unpacking facilities are proximity to the Industrial Estate Zone, Free Zone located in the terminal. and Logistics centers. LCIT offers the latest in container handling equipment, computerized control systems and extensive reefer facilities. The terminal boasts a full range of electronic business support to clients, including electronic customs release of cargo, electronic data interchange (EDI) reporting and web browser based information services. The terminal remains committed to ensuring high standards of safety, compliance with maritime transport security regulations and excellent customer service.

Gamman Busan, 7.025 Busan is situated on the south 2006 Ex P&O M Pusan Newport Company (PNC), a joint venture Terminal South-Korea eastern most tip of the Korean JV led by DP World together with Samsung, Hanjin peninsula and is Korea's leading port Heavy Industries and Construction and a number city and gateway to the Pacific of other Korean construction companies Ocean. Its strategic position makes it an ideal key transshipment hub in the North East Asia Region.

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Terminal Surabaya 7.195 PT Terminal Petikemas Surabaya 2006 Ex P&O M The terminal, owned 49% by DP World and 51% Petikemas Indonesia (TPS) is located on the northern 49% JV PT Pelabuhan Indonesia III (the Regional Port Surabaya shore of eastern Java along the edge Authority) respectively, is distinguished by the of Madura Strait. TPS is the gateway two km access bridge between the container yard to Eastern Indonesia, serving and the wharf, which is required to reach deep international and domestic trade for water. a wide-ranging hinterland. TPS is an ISPS-compliant ISO 9001, ISO 14001, OHSAS 18001 certified and recently obtained ISO 28001 certification for supply chain security management making it the first organisation and marine terminal in Indonesia to be thus accredited.

TPS was awarded by the International Ship Owners Association of Indonesia as the best Container Terminal in 2008.

The port of Le Havre 5.424 675,000 The port of Le Havre, located on the 2006 Ex P&O Generale de Manutention Portuaire (GMP), a joint Le Havre France, French North coast.Its situation, JV venture between DP World and CMA-CGM, close to the main shipping routes operates three terminals in Le Havre. through the channel ensures its position as France's largest container The Terminal de France is the prime operation, port. The entire complex is rail situated outside the locks and is a state of the art linked with direct access to the Seine terminal already under further phases of by barge to & from the Paris expansion, capable of handling the largest vessels conurbation in service now and even bigger types about to enter The Terminal de France together service in the coming years. with DP World's other major developments in Antwerp, London The Quai de l'Europe & The Quai des Ameriques and Rotterdam will, in the coming are both within the locks and offer more traditional years, enable shipping lines to have capacity, together with CFS capacity, general a network of outstanding new state cargo and RORO activity. All the terminals are of the art facilities for their European connected to allow inter-service relay. coastal routing 97

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DP World Chennai/ 2.947 6.4 mio Situated on the Coromandel Coast of 2006 Ex P&O H In May 2008 DP World increases ownership of Chennai Madras South-East India, the port of 100% CHeinnai Container Terminal, India from 75% to India Chennai is strategically located and ownership 100% well connected with major parts of DP World Chennai has maintained its focus on the world and is today one of the exceeding customer needs and anticipating future major hub ports on the Indian trends to not only facilitate but also act as a driver subcontinent. for containerization and industrial growth in South The presence of the CFS within the India. A container freight station, with a covered port premises enables prompt and area of 6500sqm, operates within the port offering convenient services to importers as such services as inspection, LCL de-stuffing and well as passengers including swift delivery of import cargo. transshipment of LCL cargo to Inland Container Destinations such Like all other terminals within DP World's as Bangalore, Hyderabad, Cochin, portfolio in the subcontinent, DP World Chennai Pondicherry and other locations. is ISPS-compliant and certified to ISO 9001, ISO 14001 and OHSAS 18001 standards.

DP World Nhava 1.936 800,000 The Port of Nhava Sheva (or 2006 Ex P&O The Dubai-based company was awarded a 17-year Nhava Sheva, Jawaharlal Nehru Port) is India's concession for the public-private partnership Sheva Mumbai/ largest port handling almost half of project in June 2013. The new facility, named Bombay the country's maritime traffic. The Nhava Sheva (India) Gateway Terminal DP World India Port of Nhava Sheva, created to add Nhava Sheva, India's first privately managed capacity to Mumbai's port, is located container terminal, is the company's flagship on the west coast of India close to operation in the Subcontinent. the country's commercial capital, The terminal operates state-of-the art Mumbai. infrastructure and provides a world-class service DP World Nhava Sheva links to a to its customers. Its productivity is rated amongst wide network of inland container the highest in the world and it continuously depots (ICD) in Pune, Nagpur, surpasses its own records in throughput and Ahmadabad, Hyderabad, Ludhiana turnaround times. and New Delhi through two sets of railway sidings, which ensure DP World was awarded by Jawaharlal Nehru Port efficient operation. Further the Trust, Government of India, the project of building terminal is connected to India's and operating a single berth facility of 330 metres major highway and rail networks, quay length alongside its existing terminal 98

which give access to neighbouring operation at Nhava Sheva, Mumbai. The new Mumbai and to the hinterland of facility is expected to be operational in 2015. Madhya Pradesh, Maharashtra, Gujarat, Karnataka and most of North India. DP World Karachi, 1.182 850,000 Located in an old channel of the 2006 Ex P&O H The concession was awarded to the P&O Ports Karachi Pakistan Indus River, 35km east of Karachi concession group in 1995 for a period of 30 years and the city centre, Port Qasim was terminal commenced operations on August 10, developed in the late 1970s close to 1997. In 2006, when P&O Ports was bought over the Pakistan Steel Mills complex to by DP World globally, QICT was added to the DP relieve congestion at Karachi Port. World portfolio in Subcontinent Region The port is within close proximity to DP World is investing in a new container terminal the major shipping routes. in Port Qasim. This project, the largest ever DP World Karachi is Pakistan's first investment in the port sector in Pakistan, will be dedicated international container developed by reclaiming an area of 25ha and will terminal. Built at Port Qasim, the be completed in three phases. In January 2011 the location of the terminal outside city new container terminal in Port Qasim near Krachi boundaries provides quicker in Pakistan officialy opened. intermodal connectivity and reduces the requirement for containers to be transported through the city for upcountry destinations. Industries located within the port area have the added advantage of savings on transportation and other costs in exporting/importing their raw materials. Delwaide Antwerp, 5.164 1.8 mio Antwerp is located at the upper end 2006 DP World H DP World has 100% ownership of the Delwaide Dock Belgium of the tidal estuary of the Scheldt, has 100% Dock terminal, DP World Antwerp, situated Terminal within the Scheldt-Maas-Rhine ownership behind the locks on the right bank of the river delta, connecting it not only to the Ex P&O Schelde. The terminal caters generally for niche 1,500km Belgian network of inland trades and compliments the larger scale Antwerp waterways but also to the European Gateway facility in the Deurganckdok on the left network. The port enjoys the bank of the river. On the right bank, in the benefits of excellent multi-modal Churchill Dock, DP World operates conventional connections to all major mainland berths in partnership with Rickmers & Conti, European centers of consumption catering for break bulk and project cargoes and production. The inland location means that the port of Antwerp enjoys a more central location in Europe than the majority of North 99

Sea ports. As a result the port of Antwerp has become one of Europe's largest sea ports, ranking second behind Rotterdam for container throughput. DP World Calloa, Peru 14.843 1.1 mio the port of Callao, approximately 2006 Greenfield H Construction of Phase One of DP World Callao Callao 15km from the capital of Peru, Lima began in April 2008. During its first year of operations (2011), DP World Callao handled in excess of 1 Million TEU throughput and about 71% of total container traffic in Peru. The terminal boasts world class standards for efficiency and productivity (currently averaging more than 30 gross moves per hour per crane), and is ranked as the top container terminal facility in South America by several of its shipping line customers. As a result, DP World Callao has positioned itself as the undisputed Gateway for Peru’s import and export container traffic, as well as an interesting point for regional transhipments.

DP World Dakar, 7.620 Located at the junction of three key 2007 Concessio H Our Arica portfolio was ecpanded during the year Dakar Senegal trade lanes: North America-Africa, n (2007) with the award of a concession in Dakar Europe-Africa and Europe-South (Senegal) to operate the current Dakar container America. terminal, Terminal á Conteneur, from 2008 and develop a brand new container terminal at Port du Furur. The first fase of this development will be completed by 2010. DP World Dakar is the only port in the region offering window berthing, which, in combination with high productivity, modern and reliable equipment and skilled staff, has virtually eliminated waiting time at anchorage and reduced truck turnaround time to less than 20 min. DP World has been formally handed responsibility for operating and developing Senegal’s busiest container terminal. The agreement gives DP World management of the current Dakar container terminal, Terminal à Conteneur.

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DP World Sokna, 7.482 550,000 sits just south of the Suez Canal on 2007 Acquisitio H Our newly acquired port of Sokna (Egypt) joins Sokhna Egypt the Red Sea on one of the world's n the Middle East portfolio as we expand around the busiest maritime trade routes – from Red Sea. Asia to the Middle East and beyond, In October 2010 there was an agreement to double to Europe. And is the closest port to the size of DP World’s container operations in Cairo. Sokhna Port, Egypt. Port Khalifa Abu Dhabi 131 2.5 mio 2007 JV M A joint venture agreement was also signed with Abu Dhabi Port Authority during 2007 regarding the development of the new Port Khalifa (UAE) RWG Rotterdam, 5.178 2.3 mio 2007 Greenfield H DP World as part of a consortium was awarded by The the Port of Rotterdam the right to equip and Netherlands operate the first terminal in the Maasvlakte 2 development at Rotterdam. The terminal will serve as a main gateway port for the local Benelux market and the European hinterland, including a central hub for relay and feeder activities in the region. With an estimated capacity of 4 million TEU, the terminal will have a 1900-metre long deep sea quay with a depth of 20 metres, a 550-metre quay for inland shipping and feeder vessels and its own rail terminal. Djen-Djen Algeria, 5.085 800,000 Djen-Djen has the potential to 2008 50% JV M Partnering with the Algerian government DP Algiers handle the new generation mega- World has secured the development of port vessels and become a major operations at Djen-Djen, under a 30-year transshipment hub for the region. concession.The joint 50/50 venture will invest in The port is close to all the main east expanding the new Djen-Djen facility in eastern west trade routes and offers an Algeria over time, according to market demand. excellent alternative for the The port was originally built to handle the steel congested South European hubs. traffic for the region of Bellara. The Algerian The facility boasts a 17 m deep draft government is planning to develop Djen-Djen into and is one of the few Mediterranean a large container handling facility, for both terminals with easy access and transhipment and origin & destination cargo. minimal deviation. While road access to the port is currently limited, direct access to the new East-West highway is planned and expected to be completed in 2011. 101

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Contarsa Tarrangona, 5.246 1.5 mio The Mediterranean Spanish port of 2008 Acquisitio M In June 2008 DP World acquires a 60% stake in Sociedad de Tarrangona, Tarragona is located in the Northeast n of 60% Contarsa Sociedad de Estiba SA, concessionaire Estiba Spain of the Iberian Peninsula, in the stake for Tarrangona Container Port Terminal, Spain. Catalonia region. Tarragona is very well positioned to DP World acquired the container terminal pursue its growth as a significant concession in mid-2008 in partnership with a gateway for Spain as well as a major liner shipping company for their hub Mediterranean hub for global operations. Additional capacity is currently shipping services. Tarragona Port available to other operators and together with the currently handles 100% origin and port authority there are plans to expand the destination cargo and serves the terminal in the coming years. hinterland of northern and central Spain with the potential to expand and attract cargo seeking alternatives to nearby ports. In the immediate port hinterland both import and export cargo is readily available from numerous multinational petro-chemical companies, amongst others, who have regional distribution centres close by. Empresa Santos, 12.236 1.2 mio Embraport is operating in Porto de 2009 Acquired a H In 2009, DP World initialled a partnership with Brasileira de Brazil Santos, Brazil’s largest container majority Odebrecht to acquire a majority stake in Empresa Terminais terminal, 90 percent of whose cargo stake Brasileira de Terminais Portuários (Embraport), Portuários is destined for São Paulo, Brazil’s the largest Brazilian private multi-modal port most populous city, some 80 terminal. kilometres away. The site boasts excellent road and rail connectivity.

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Port of Algeria, 5.085 Algeria is particularly well 2009 JV M DP World assumed management control of the Algeria Algiers positioned, close to deep sea routes, Port of Algiers in early March 2009, in a joint to serve as a gateway to its venture shareholding with EPAL, the Algiers Port substantial hinterland and to become Authority. a significant transshipment centre As part of the 30-year concession, DP World has over time. committed to invest in new terminal handling Priorities include increasing equipment and redevelop the main container terminal efficiency and productivity terminal. Algiers. as well as reducing vessel wait and berthing time and container dwell time. Saigon Ho Chi 5.630 750,000 Saigon Premier Container Terminal Opened 80% JV H In January 2010 offiial opening of Saigon Premier Premier Minh, – SPCT , located along the western in 2010 Container Terminal in Ho Chi Minh City, Container Vietnam shore of the Soai Rap River on the Vietnam. Terminal 40 hectares Hiep Phuoc Industrial The project is an 80:20 joint venture between DP (SPCT) Park and 16km from Ho Chi Minh World and the Tan Thuan Industrial Promotion City center, is a state of the art Company (IPC) - Vietnamese state-owned facility which began operations in company. October 2009, just two years after construction began in September 2007. Port of Paramari- 11.775 100,000 Paramaribo is the primary multi- 2011 JV M The transaction is expected to close in the third Parimaribo bo, purpose port serving Suriname quarter of 2011. The price was not disclosed. DP Suriname located on the Suriname River. World has a majority stake in the largest terminal Traffic through the port has grown operation in the port rapidly over recent years, and it is DP World also operates a separate private terminal well placed to serve the strong near Paramaribo, that is focused on handling resource-based local economy. project cargoes for the mining, oil and forestry Improved road connectivity to sectors, as well as cement cargoes; as the off-shore French Guiana will allow oil industry develops in Suriname, the importance Paramaribo to act as a gateway for of this facility will continue to increase. the western part of that country.

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Mina Al Dubai UAE 0 Mina Al Hamriya is competitively DP World is in the process of modernising and Hamriya positioned as the traditional cargo upgrading Mina Al Hamriya, to strengthen its gateway to Dubai, situated traditional capabilities and leverage the strategic strategically as UAE’s central location of the port in the centre of Dubai. trading hub. Mina Al Hamriya plays Mina Al Hamriya is managed by DP World under a key role in facilitating non- the co-brand of Emirates Ports Company. containerised cargo movements between Dubai, Arabian Gulf, East Africa and Western India. Ships of all types are handled at the port – dhows, break-bulk and RoRo vessels. The port also supports the fishing industry with piers capable of handling 190 fishing boats at any given time. Mina Al Hamriya also houses one of the region’s largest quarantine facilities, hence making it the port of choice for livestock imports. Proximity to Dubai’s used car markets and support of the RTA facilities makes the port an attractive hub for used car trading. Fujairah Fujairah, 105 18,588 Fujairah Container Terminal is DP World Fujairah has the potential to be Container UAE strategically located on the United developed into a deep-sea terminal. Terminal Arab Emirates Indian Ocean coast, outside the Straits of Hormuz, close to the east west shipping routes. Its location offers shipping lines with high transhipment volumes an excellent platform to serve the entire Gulf Region. The container terminal spread over 200,000 sqm offers significant excess capacity..

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Appendix 3

Capacity Geographical of the distance in terminal Year of Entry Degree of Terminal Location km in TEU Host location specific advantage entry mode commitment Supporting Quotes APM Tacoma, USA 7,879 600,000 The Port of Tacoma was the 6th busiest 1975 Acquisition H A. P. Møller’s first terminal Terminals container port on the West Coast of venture was in Tacoma in Tacoma North America in 2009 and is a major 1975. gateway for the trans-Pacific trade lane. Tacoma introduced the first dockside rail facilities on the West Coast in 1981, pioneering “intermodal” movement of containers by ship in conjunction with dedicated rail service. China is Tacoma’s major trading partner, followed by Japan which together account for more than 70% of Tacoma’s container traffic. APM Algeciras, Spain 1,935 3,7 mio The Port of Algeciras, located in 1986 Greenfield H Maersk has been in Algeciras Terminals southern Spain at the Gibraltar Strait, since 1986 with its terminal of Algeciras was the third busiest container port on 70,000 sq ms. the Mediterranean Sea in terms of MAERSK Espana is to build a container volume in 2009. new terminal at Muelle del Navio in the Spanish port of Algeciras. APM Terminals Algeciras, which handles nearly all of the port’s container traffic, has become one of the most important and modern transhipment terminals in the world.

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Capacity Geographical of the distance in terminal Year of Entry Degree of Terminal Location km in TEU Host location specific advantage entry mode commitment Supporting Quotes Laem Laem Chabang, 9,319 1.6 mio Leam Chabang Port was developed in 1995 35% JV L The terminal is continuously Chabang Thailand the early 1990s to facilitate Thailand's investing in new equipment (LCB) long-term economic and trade growth. and technology. The terminal Located at Chonburi provice in the operates Super Post Panamax upper Gulf of Thailand, 130km's quay cranes with dual hoist Southeas of Bankok Laem Chabang options and 6 + 1 tier RTGs, Port is now the key point of entry for while employing a fully Thailand's container traffic. computerized container control system. APMT owns 35% in the joint venture (LCB1 owns 90% LCMT) and has operational management control. APMTs joint ventur partners are Eastern Sea Laem CHabang Terminal Company Limited (40%) and Bangkok Modern Terminals Ltd. (25%) The concessions expire in 2022 (LCB1) and 2034 (LCMT), respectively. Salala, Oman 5,834 5 mio The Port of Salalah, on the Arabian 1998 30.1% JV L APM Terminals holds a Sea in Oman, is the 3rd-largest minority stake in the Port of container port in the Middle East Salalah, which is listed on Region, The port is located on the the Oman stock exchange. The East-West trade lane between Europe government of Oman holds and Asia and also holds a strategic 20%, 21% held by institutional position for servicing the upper investors and 29% by pension Arabian Gulf, Indian sub-continent funds Red Sea and East African markets. The Port of Salalah has a APM Terminals holds a minority stake volume of approximately 3.5 in the Port of Salalah, which is listed million TEUs in 2009, on the Oman stock exchange. representing a year-on-year increase of 14%.

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Capacity Geographical of the distance in terminal Year of Entry Degree of Terminal Location km in TEU Host location specific advantage entry mode commitment Supporting Quotes Contonou, 5,092 The Port of Contonou is the 5th- 1998 H The Coman SA facility Benin busiest container port on the West provides one of the highest African mainland. Next to serving as levels of productivity in Angola’s primary port, 30 km from the Western Africa. border, it also serves as a gateway for Nigerian cargo and a transit gateway for Niger, Mali and Burkina Faso. NTB Bremerhaven, 332 3,6 mio The Bremerhaven port complex is the 1999 JV M APM Terminals is an equal North Sea Germany 5th busiest container port in North partner in the NTB North Sea Terminal Europe, and the second-largest Terminal Bremerhaven with Bremerha German container port (after Eurogate, Europe’s largest ven Hamburg). Bremerhaven is located on container terminal operator. the Weser River. With highway and rail access to interior points in Europe, the port has direct connections to the German and European inland waterway network. APM Los Angeles, 8,947 3,4 mio The Port of Los Angeles is the busiest 1999 Greenfield H Larry A. Keller, executive Terminals USA containerport in North America, and director of the Port, stated: Pier 400 the 16th busiest in the world. At nearly "Last October (1999), the Port 500 acres, The 40-acre on-dock rail and Maersk Sealand signed a facility and five miles of working track memorandum of can accommodate four double stack understanding trains simultaneously. signifying Maersk's initial commitment to the Pier 400 container terminal. At that time, we celebrated our new partnership and Maersk's investment in Los Angeles. APM Terminals Pier 400 Los Angeles facility is the largest single proprietary terminal in the world.

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Capacity Geographical of the distance in terminal Year of Entry Degree of Terminal Location km in TEU Host location specific advantage entry mode commitment Supporting Quotes Port of Pelepas, 10,533 9.0 mio PTP, is strategically located at the 1999 30% JV L 30% owned JV with Tanjung Malaysia confluence of one of the world’s operational management Pelepas busiest shipping straits, the Melaka control. Partners: Malaysian (PTP) Straits. It offers a superb location for Mining Company (70%). transshipment activities and has a Concession expiry date: 2055. strong value proposition in the South East Asian market. The 1,500 acres Pelepas Free Zone is directly connected to the terminal and provides for seamless movement of cargo between the Free Zone and the terminal. The Free Zone is an ideal location for manufacturing activities and regional distribution operations.

Capacity Geographical of the distance in terminal Year of Entry Degree of Terminal Location km in TEU Host location specific advantage entry mode commitment Supporting Quotes Medcente Gioia Tauro, 1,766 4.3 mio The Port of Gioia Tauro, is one of the 2000 33% JV L APM Terminals is a minority r Italy three busiest container ports and partner in the Medcenter Container transshipment hubs in the Container Terminal in Gioia Terminal Mediterranean Region, and is the Tauro with Contship Italia largest container port in Italy. Located Group. in the Reggio Calabria Province at the tip of the Italian “boot,” Gioia Tauro requires minimal deviation for vessels traveling between the Suez Canal and the Straits of Gibraltar.

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Capacity Geographical of the distance in terminal Year of Entry Degree of Terminal Location km in TEU Host location specific advantage entry mode commitment Supporting Quotes APM Elisabeth, USA 9,799 1,5 mio Port Elizabeth is part of the Port of 2000 Greenfield H Maersk Sealand plans by Terminals New York and New Jersey complex, April to operate from Sea- Port the 21st largest in the world by Land's old terminal at Port Elizabeth container volume in 2009; And the Elizabeth, N.J., where the port third-largest container port in the has agreed to build a 350-acre USA, (after Los Angeles and Long East Coast hub port for the Beach) and the busiest container port world's largest container line. on the East Coast of North America. The Port of NY & NJ is the gateway to the world’s most concentrated and affluent consumer market. Terminale Buenos Aires, 11,409 250,000 The Port of Buenos Aires is the second 2000 Acquisition H Terminal 4 at the Port of s 4 SA Argentina busiest container port in South Buenos Aires was the first America, after the Brazilian Port of APM Terminals facility in the Santos. Buenos Aires is located on the Southern Hemisphere. Rio de la Plata (River Plate) and serves as a gateway for the southern tip of South America, including Argentina, Chile, Paraguay, Uruguay and Southern Brazil. Rotterdam, The 20 3.5 mio APM Terminals Rotterdam, one of the 2000 Greenfield H Was first established in Netherlands largest terminals in Europe, Rotterdam October 2000. As of is a major transshipment center for the November 2009, it is the first British, Irish, Scandinavian and Baltic container terminal to “go Markets, with multi-modal access to green” with wind-generated the 320 million-strong consumer, electrical power for cranes and commercial and industrial centers of other operations. Continental Europe.

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Capacity Geographical of the distance in terminal Year of Entry Degree of Terminal Location km in TEU Host location specific advantage entry mode commitment Supporting Quotes Shanghai Shanghai, China 8,939 4.0 mio SECT is very strategically located at 2002 49% JV M 49% owned JV with East the Waigaoqiao port complex, some 80 operational management Container km from the sea outlet of the Yangtze control. Terminal river and the nearest terminal to the Partners: Shanghai Co. Ltd East Chinese Sea. Being connected International Port (Group) Co. with the eastern and northern part of Ltd (51%). the outer ring road, the terminal is very Concession expiry date: year well linked with the comprehensive 2052. transportation network of the Zhejiang and Jiangsu provinces, where most export manufacturing vendors are located in this Yangtze River delta area.SECT is naturally protected by the Changxing Island. Winds and waves are favorably weak, which makes the terminal suitable for long- time operation. It is a tidal port though which is a drawback but very much compensated by consitent high productivities

Meridian Tema, Ghana 5,182 600,000 The Port of Tema is the larger of this 2002 32.73% JV L Meridian Port Services Port /3,5 mio West African nation’s two ports, Limited is a joint venture Services handling approximately 70% of all of between Ghana Ports and (MPS) Ghana’s seaborne cargo. Tema serves Harbours Authority and to some extent as a gateway for the Meridian Port Holdings landlocked countries of Mali, Niger Limited, which is in turn a and Burkina Faso. joint venture with the Bolloré Group and APM Terminals as the two main shareholders; APM Terminals holds a minority stake.

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Capacity Geographical of the distance in terminal Year of Entry Degree of Terminal Location km in TEU Host location specific advantage entry mode commitment Supporting Quotes Dalian Dalian, China 8,238 2.8 mio Our APMT facility in Dalian (DPCM) 2003 20% JV M Partners: Dalian Port Group Port is situated in the Port of Dayao Bay (35%), PSA (25%), COSCO Container which is on the southern tip of (20%). Terminal Liaodong Peninsula. It is in the Concession expiry date: year Co., Ltd Jinzhou New District of Dalian and 2054. (DPCT) borders the coastline of North Yellow Sea. It is about 15 nautical miles from Dalian port district and 50 kilometers from downtown Dalian. It is a natural deep water harbor, free of siltation and ice-free all year round. It is located in the tip of Bohai Rim Zone, bounded on the north by the three provinces of Northeast China and Inner Mongolia Autonomous Region and on the south by Shandong Peninsula across the sea. It is also in close proximity to neighboring countries like Japan, Korea and Far East Russia. The combination of a vast hinterland and cargo resources makes it the gateway for both inside China and the rest of the world

Port Said, Egypt 3,247 5.4 mio Located at the mouth of the Suez Opened JV M The Suez Canal Container Canal, Port Said is a transshipment in 2004 Terminal, a joint venture in center for Far Eastern cargoes destined which APM Terminals is the for Southern Europe and the majority shareholder, Mediterranean/Black Sea Region. officially opened in December of 2004. Undergone a significant expansion which has doubled its capacity to 5.4 million TEUs, completed in 2012.

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Capacity Geographical of the distance in terminal Year of Entry Degree of Terminal Location km in TEU Host location specific advantage entry mode commitment Supporting Quotes Aqaba Aqaba, Jordan 3,556 850,000 The Port of Aqaba, the Kingdom of 2004 50% JV M This total represents a growth Container Jordan’s only container port, is the 2nd rate of over 15% for the year. Terminal –largest container facility on the Red The Aqaba Container Terminal (ACT) Sea, after Jeddah, with volume of is a joint venture with ADC, 675,000 TEUs in 2009 the Jordanian Government's development arm for the Aqaba Special Economic Zone. APM Terminals manages the facility with the management contract runing until 2031. A terminal expansion project, including a 460 meter doubling of the quay will increase annual container throughout capacity to a projected 2 million TEU when fully completed and equipped in 2013. Xiamen Xiamen, China 9,375 1.8 mio Our APMT facility in China, XSCT, is 2004 50% JV M 50% owned JV with Songyu strategically located at the southeast of operational management Container Haicang district, also known as at the control. Partners: Xiamen Port Terminal continent side of Xiamen. With unique Holding Group (50%). Co., Ltd feature of the nearest location to the Concession expiry date: year (XSCT) junction of two channels and the open 2054 sea, shipping lines enjoy the shortest steaming distance in and out of Xiamen. XSCT has the capability to accommodate berthing of three 10,000TEU vessels simultaneously. Superior geographical conditions and world-class handling equipment warrant the terminal to serve the shipping industry with one of the best international standards. Moreover, the establishment of Haicang Bonded Port in 2011 will enable customers of XSCT to enjoy flexible port policy. 112

Capacity Geographical of the distance in terminal Year of Entry Degree of Terminal Location km in TEU Host location specific advantage entry mode commitment Supporting Quotes Douala Douala, Guinea 5,371 280,000 The Port of Douala, situated in the 2004 40% JV M APM Terminals holds a Internatio Gulf of Guinea, serves as a gateway to minority share in the Douala nal Central Africa. International Container Container Terminal (DIT), which was Terminal selected for the concession to (DIT), manage and operate the facility in July 2004 and began operations in January 2005. JV Partner: Bolloré Africa Logistics As containerization of West- African cargoes continues, significantly 40% of the 400 vessels handled at DIT since 2005 have been Roll-On/Roll- Off (RO-RO). APM Pipavav, India 6,645 600,000 APM Terminal Pipavav is an all- 2005 43% JV M 43% owned Joint Venture. Terminal weather port located just 152 nautical Partners: IDFC (10.6%), IDBI Pipavav miles north from Nhava Sheva in (6.6%), Matews Asia (3,8%), Mumbai. The port location in the State New York Life (3.8%), AMP of Gujarat provides immediate access Capital (2.8%) & others to a rich hinterland and key markets in (25.49%) northwest India. Pipavav is closely Concession expiry date: year located to the main maritime trade 2028. routes linking Europe and Middle East with Asia.

The port offers direct weekly mainline services to Europe, the East Coast of the United States and the Far East. Port Pipavav has the fastest transit time to Shanghai and the U.S. East Coast from the West Coast of India.

The port is very well connected by (double stack) intermodal trains to all ICDs in northern India. 113

Capacity Geographical of the distance in terminal Year of Entry Degree of Terminal Location km in TEU Host location specific advantage entry mode commitment Supporting Quotes Vridi Abidjan, Ivory 5,260 750,000/ The Port of Abidjan, with a throughput 2005 40% JV M APM Terminals holds the Container Coast* 1,5 mio of nearly 600,000 TEUs, is one of the minority share of the Societe Terminal busiest container ports in West Africa, Exploitation Terminal de Vridi serving as a key transhipment hub for (SETV) in a joint venture with the region. Abidjan is the primary the Bolloré Group. The gateway to Ivory Coast for containers Abidjan container terminal and major transit point for land-locked concession agreement was countries such as Mali, Niger and signed in October of 2003, Burkina Faso. with APM Terminals joining in July 2005. The expansion project undertaken by the Bolloré Group has added 320 meters of berth, bringing the total to 740 meters, with four new STS cranes on order. The expansion, scheduled for completion in 2015, will increase annual container throughput capacity to 1.5 million TEUs Terminal Itajai, Brazil 10,193 750,000 Located in Southern Brazil, in the 2005 Acquisition H APM Terminals became the de State of Santa Catarina, Itajai was the sole shareholder in Terminal Container 4th-largest container port in Brazil in de Containers do Vale do Itajai s do Vale 2009 with a throughput of S/A, better known as do Itajai approximately 600,000 TEUs. Itajai’s "Teconvi" in 2007 S/A main exports include wood, ceramic (Teconvi) floors, machinery, sugar, paper and tobacco, while the main imports include wheat, chemicals, engines, textiles, and paper. APM Zeebrugge, 112 1 mio Located directly on the sea coast, and Opened Greenfield H It is the 6th busiest in North Terminals Belgium is very close to the main shipping in 2006 Europe, with 2.3 million TEUs Zeebrugg routes in North Western Europe with a handled in 2009. Port Group e natural deep draft can accommodate acquired a 25% share through the largest container vessels. It is a an agreement finalized transhipment port for the UK, Ireland, between APM Terminals and Scandinavia and the Baltic region. SIPG in May 2010. 114

Capacity Geographical of the distance in terminal Year of Entry Degree of Terminal Location km in TEU Host location specific advantage entry mode commitment Supporting Quotes Khalifa Bahrain 4,816 1 mio Located in the Persian Gulf, recently 2006 80% JV H The new modern multi- Bin opened Bahrain Gateway Khalifa Bin purpose facility has been built Salman Salman Port has the potential to serve on reclaimed land at Hidd, Port as a trans-shipment hub for Qatar, west of the Capital of Kuwait and parts of Iran, Iraq and Manama. APM Terminals Saudi Arabia in the growing Gulf Bahrain B.S.C.(c) is a joint Region. venture with YBA Kanoo Holdings of Bahrain. The business was established in 2006 with the purpose of operating port, marine and related services within Bahrain and the contiguous area. The Ports volumes have been growing steadily and in 2012, containerised throughput reached 525 000 teus and 500 000 ts of general cargo. The ports diverse business includes the handling of Cruise Liners and the US Navy’s 5th fleet. Apapa Apapa, Nigeria 5,083 1.2 mio APM Terminals Apapa, at the port of 2006 54.8% JV M APM Terminals manages the Container the Nigerian Capital of Lagos, is the facility Terminal largest container terminal operator in West Africa having doubled container traffic after concession began in 2006. Gateway Mumbai, India 6,900 1.8 mio GTI, is strategically located on the 2006 74% JV H 74% owned Joint Venture. Terminal west coast of India at Nhava Sheva Partners: CONCOR of India India across the bay of Mumbai and is well (26%). (GTI) connected to major, minor ICD CONCOR of India is for 61% locations and CFSs through rail and owned by the central road which facilitates smooth flow of government. cargo. With state of the art equipment Conession expiry date: year and building world class infrastructure 2034 in all areas, GTI ensures the most efficient and reliable operations in the port. 115

Capacity Geographical of the distance in terminal Year of Entry Degree of Terminal Location km in TEU Host location specific advantage entry mode commitment Supporting Quotes APM Tangiers, 1,984 1,8 mio The Tangier Med port complex was Opened 90% share H The Tangier-Med Phase I Terminals Marocco constructed on a central artery of in 2007 container terminal is owned Tangier global shipping; over 200 vessels a and operated by APM day pass through the Straits of Terminals and the Moroccan Gibraltar as they carry trade between Akwa Group, and opened in Asia, Europe, Africa and the July of 2007. Primarily a Americas. A deep water port handling transshipment hub at present, the largest Container vessels in service APM Terminals Tangier-Med and with minimum deviation from the is one of two container major shipping lanes supported by facilities at the new port high levels of consistent productivity, development which is APM Terminals Tangier is positioned projected to become the largest to deliver. port in Africa. Gateway cargo to the hinterland is now In 2009, APM Terminals permissible either via feeder or by Tangier won the Award for the rail/road directly from the Container Highest Safety Honor within terminal to all major destinations such Morocco (Prix National de la as Casablanca, Rabat and others. Securite au travail).

APM Virginia, USA 6,904 1,5 mio Opened Greenfield In July 2010 APM Terminals Terminals in 2007 / Americas and Virginia Port under in 2010 Authority signed a 20-year lease leased to lease of APM Terminals’ Virginia Virginia Virginia facility to the port Gateway Port authority’s operating arm, Authorit VAT. VAT is now managing y the facility and paying APM Terminals a base rent for the facility. APM Terminals continues to own the concession.

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Capacity Geographical of the distance in terminal Year of Entry Degree of Terminal Location km in TEU Host location specific advantage entry mode commitment Supporting Quotes Alinport Posorja, 9,888 700,000 The Port of Posorja, located on the 2007 Greenfield H APM Terminals obtained the Container Ecuador West Coast of South America, is 120 51% share majority share of a new Terminal kilometers (75 miles) south of Greenfield container terminal Guayaquil, is Ecuador’s largest city, at project in October of 2007. the heart of the nation’s fishing and Minority shareholder is the manufacturing industries. Serving the Albacora Group. increasingly important South Posorja will be a key addition American trade lanes, and situated to the APM Terminals Global close to the Panama Canal. Terminal Network for both the Pacific and Latin American container markets. Qingdao 8,436 6,7 mio Our APMT facility QQCT is located in 2007 20% JV L 20% owned Joint Venture. Qianwan northern China at the Yellow Sea and Partners: Qingdao Port Container is a major economic international (Group) CO., LTD (31%), Terminal transportation hub with great access DPW (29%), COSCO Pacific Limited for cargoes to/from the north China (20%). (QQCT) area. With the state-of-art equipments, Concession expiry date: year QQCT provides consistent high 2034 productivities for container handling. Luanda Luanda, Angola 6,833 330,000 2007 51% JV M APM Terminals joined local Container investment/pension fund Terminal company Gestao de Fundos in 2007 to create a new local company called Sogester, to operating the Luanda Container Terminal. APM Terminals is the majority shareholder in the enterprise. Sogester has during 2011 bought two 550 Mobile Harbor Cranes, facilitating increasing the berth productivity by 50 per cent.

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Capacity Geographical of the distance in terminal Year of Entry Degree of Terminal Location km in TEU Host location specific advantage entry mode commitment Supporting Quotes Terminal Le Havre, 411 600,000 The Port of Le Havre, is the largest 2007 50% JV M Terminal Porte Océane is a Porte France containerport in France, accounting joint venture between APM Océane for 63% of all French container Terminals and the French volume, and is the 6th busiest stevedoring group Perrigault containerport in the Northern SA. European port range. Le Havre offers connection by road, rail and barge to inland European destinations. Mobile Mobile, USA 7,528 350,000 The Port of Mobile serves as an Opened Greenfield H The Mobile Container Container important gateway on the Gulf of in 2008 Terminal opened in September Terminal Mexico for American mid-Western of 2008. importers and exporters. The expansion of the Panama Canal and the increase in automotive manufacturing in Alabama and the surrounding region will be major drivers of Mobile’s growth in the years ahead. Ceará Pecém, Brazil 7,404 300,000 Located 32 miles from Ceará’s state 2008 100% share H APM Terminals assumed Terminal capital of Fortaleza in Northeastern operational and management Operator Brazil, the Port of Pecém is the closest responsibility for Ceará (CTO) Brazilian port to both the USA and Terminal Operator (CTO), the Europe. Transit time between Pecém stevedoring and container and New York or Algeciras is as short terminal operating company at as six days. the Port of Pecém, in March of 2008. South Miami, USA 7,424 300,000 The Port of Miami is the 4th busiest 2008 JV M The South Florida Container Florida containerport in the Caribbean, and the 49% share Terminal is operated as a joint Container 5th busiest on the East Coast of North venture with Terminal Link, Terminal America. The Port of Miami is a the terminal operating division primary gateway for US exports to the of French-based shipping Caribbean, and Central and South company CMA-CGM. America.

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Capacity Geographical of the distance in terminal Year of Entry Degree of Terminal Location km in TEU Host location specific advantage entry mode commitment Supporting Quotes Pointe-Noire, 6,370 225,000/ Gulf of Guinea, a natural gateway to 2008 22.5% JV L APM Terminals is now a Congo 650,000 the increasingly important Central member of the Bolloré Africa by 2015 African region Logistics’ consortium which Expansion plans include an 800 meter has been selected to develop a quay with a 15 meter depth and a 31 new deep-water container hectare yard by 2015, providing an terminal at the Port of Pointe annual throughput capacity of 650,000 Noir in the Republic of the TEUs by 2015. Congo. In December 2008 the French-based Bolloré Group signed a €570 million ($735 million USD) 27-year concession agreement with the Congolese Government which provides for the modernization of the largest deep water port in the Gulf of Guinea. Genoa, Italy 920 720,000 The Port of Vado is located in 2008 Greenfield H The Port Authority of Savona- Northwestern Italy in the Region of 97% share Vado, signed a concession Savona on the Ligurian Coast, near agreement with APM Genoa. Terminals and its local partners for a new container terminal in February of 2008. The planned Vado container terminal, the first major new container facility built in Italy in decades, is scheduled to become operational in 2013. Brasil Santos, Brazil 9,792 2,2 mio The terminal will offer a 15 meter 2009 50% JV M In August 2009 APM Terminal depth to accommodate the larger Terminals announced the Portuario vessels now entering the South finalization of an agreement, (BTP) American trade lanes, Traffic at the subject to government Port of Santos represents regulatory approval, with approximately 25% of Brazilian Brazilian operator Terminal foreign trade. Investment Limited to jointly manage the new Brasil Terminal Portuario (BTP)

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Capacity Geographical of the distance in terminal Year of Entry Degree of Terminal Location km in TEU Host location specific advantage entry mode commitment Supporting Quotes Qingdao Qingdao, China 8,436 3.8 mio QQCTU is APMT’s second facility in 2009 8% JV L 8% owned Joint Venture. Qianwan Qingdao China and is located in Partners: Qingdao Port United northern China at the Yellow Sea and (Group) Co., LTD (13.4%), Container is a major economic international DPW (11.6%), COSCO Terminal transportation hub with great access Pacific (8%), Evergreen Limited for cargoes to/from the north China (10%), China Merchang (QQCTU area. With the state-of-art equipments, International Container ) QQCTU provides consistent high Terminal (Qingdao) 50%. productivities for container handling. Cai Mep Cai Mep, 1.1 mio Cai Mep International Terminal Co., Opened 49% JV APMT owns 49% of this Joint Internatio Vietnam Ltd. (CMIT) is one of the main 2010 Venture with operational nal gateways for exporting and importing management control. Portners: Terminal cargo in the south of Vietnam, Vietnam National Shipping Co., Ltd including cargo from Ho Chi Minh lines / Vinalines (36%) and (CMIT) City. Saigon Port (15%). APM Aarhus, 596 1,0 mio Denmark’s second-largest city and the 2010 JV M APM Terminals Cargo Service Terminals Denmark 5th-busiest container port in the A/S was established in Cargo Scandinavian/Baltic region. The port September 2010 by merging Service offers a deep-water 15 meter berth the operations of APM A/S depth and has direct rail service to Terminals Aarhus with the Copenhagen. adjacent Cargo Service terminal facility. Monrovia, 5,282 Monrovia is the Capital and largest 2010 Greenfield H APM Terminals has signed a Liberia city in Liberia, a nation of 3.4 million 25-year concession agreement people on the West African coast. for the operation of the Port of Monrovia in Liberia, having been named the preferred bidder for the port management and modernization project in March 2010. The agreement for the port’s privatization, ratified in September, will result in the investment of $120 million USD in the facility over the course of the contract term. 120

Capacity Geographical of the distance in terminal Year of Entry Degree of Terminal Location km in TEU Host location specific advantage entry mode commitment Supporting Quotes APM Calloa, Peru 10,502 900,000 APM Terminals Callao is the biggest Opened Greenfield H APM Terminals Callao signed Terminals multipurpose terminal in Peru, with in 2011 80% share a 30 year concession with the Callao container operations as well as general state of Peru, starting our cargo, grains, roros, minerals, liquids operations in July 2011. and project cargo. We are developing the biggest modernization project in ports in this country. Moin Moin, Costa 8,965 2.0 mio strategically located in the Limon / 2011 Greenfield H In February of 2011, APM Container Rica Moin port complex which currently Terminals won an Terminal services 80% of the country´s international public bid and international commerce. This deep later that year signed a 33-year water terminal, only 160 nautical concession contract with the miles North of the Panama Canal Government of Costa Rica to In essence the region is been design, finance, construct, positioned as the country´s strongest operate and maintain a multimodal logistics centre with sea specialized container terminal and air ports as well as rail and roads off the Caribbean coast of Moin, Limon. A few months later the contract was ratified by the National Controller’s Offices which started the first phase of the project with an 18-month in-depth environmental, social and economic impact study.

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Capacity Geographical of the distance in terminal Host location specific advantage Year of Entry Degree of Terminal Location km in TEU entry mode commitment Supporting Quotes Poti, Georgia 2,999 The Port currently serves as the 2011 JV M The Black Sea region has a European gateway for international strong potential, with its trade in Georgia, Armenia and skilled and industrious labor Azerbaijan, and is ideally located to force and its mineral become a future hub for Central Asia resources. trade. "With fast economic growth, the region’s importers and exporters will require high quality port infrastructure, and so naturally it is a market in which we have great interest. With our track record of world-class port operations and development in all markets, we believe we can add a lot of value to Poti Sea Port to generate more business," Sondergaard concluded. APM Lázaro 9,528 unique characteristics of the Port of 2011 Greenfield H Terminals Cárdenas, Lazaro Cardenas, as one of the most Lazaro Mexico competitive and strategic ports in the Cardenas West Coast of America is creating the port infrastructure to strengthen the trade from Asia to Mexico and America. APM Terminals Lazaro Cardenas will be linked through an intermodal transport corridor to the intermidal facility in Cuautitlan, which has an strategic location near 250 distribution centers, having access to México biggest consumer market, representing over 20 million people and 26% of Mexico’s GDP

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Capacity Geographical of the distance in terminal Year of Entry Degree of Terminal Location km in TEU Host location specific advantage entry mode commitment Supporting Quotes Gothenburg, 796 2011 concession H Sweden Container Wilhelmshaven, 304 2,7 mio The new €1 billion facility, which Opened 30% JV M The Container Terminal Terminal Germany when completed will be able to in 2012 Wilhelmshaven project is Wilhelms accommodate vessels of more than currently under construction at haven 12,000 TEU capacity. the German North Sea Port of Wilhelmshaven. APM Terminals holds a 30% share of the planned deep-water terminal with German-based Terminal Operator Eurogate the lead partner in the development. APM Izmir, Turkey 2,330 1.5 mio Izmir, located in the Izmir region on 2013 Greenfield H In February 2013, APM Terminals the Aegean coast – one of Turkey’s Terminals formalized an Izmir fastest growing regions – has a agreement with Turkish population of four million. Export and petrochemical company imports passing through Izmir support Petkim to operate a new 1.5 close to 20 million inhabitants. million TEU purpose-built container and general deep- water terminal at Petkim Port in Aliağa, Izmir. Exporters and importers will benefits from the total project investment of USD 400 million that will add urgently needed capacity to the Izmir region. Namibe, Angola 7,529 The port handles about 200.000 tons a 2014 JV/ 20 year M In May 2014 Sogester Namibe year, including 2500 TEU in and out. concession received the 207-meter long, Commodities handled include geared containership Nile foodstuffs, building material and Dutch Gemsbok as the first equipment to the neighbour province vessel call of a new 20-year of Huila and outbound cargo such as concession agreement fish, seafood and agricultural goods concluded for the operation, mainly to Luanda and other ports of maintenance and development Angola as well as some exports of of the Port of Namibe, Angola. marble and granite. 123

Capacity Geographical of the distance in terminal Year of Entry Degree of Terminal Location km in TEU Host location specific advantage entry mode commitment Supporting Quotes Rotterdam, The 20 4,5 mio Opened Greenfield H Netherlands in 2015 APM Charleston, 6,835 900,000 The Port of Charleston, the 4th-largest Sold in Stevedoring M Terminals USA container terminal in the US, leads 2015 contract Charlesto American ports in productivity, with n (Wando existing natural deep-water access for Welch vessels of up to 8,000 TEU capacity. Terminal) There is a population of 60 million within a 500-mile radius of the port. The US Southeast is America’s fastest- growing consumer market; the U.S. Census projects the population of Southeastern states to grow 43% between 2000 and 2030. APM Houston, USA 8,065 600,000 The Port of Houston is the busiest Sold in Greenfield M The Houston facility is APM Terminals containerport on the Gulf Coast, and 2015 Terminals’ 4th largest terminal Houston the 7th busiest in North America. in North America. Houston’s leading geographic partner for imports (29%) and exports (24%) is North Europe. South America ranks second as an export destination, and third (behind Northeast Asia) as an import origin. APM Jacksonville, 7,145 300,000 Located in Northern Florida on the Sold in Greenfield M Terminals USA Atlantic Coast, the Port of 2015 Jacksonvi Jacksonville is a gateway for Florida lle and the Southeastern USA. Jacksonville is connected to interior US points through three major rail services. Jacksonville serves the citrus export market, and is well-positioned to accommodate increased vessel and container traffic when the enlarged Panama Canal locks open in 2014

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Capacity Geographical of the distance in terminal Year of Entry Degree of Terminal Location km in TEU Host location specific advantage entry mode commitment Supporting Quotes Africa Onne, Nigeria 5,279 The closest gateway to the fast- ? 44% JV M APM Terminals holds a Container growing Eastern Nigerian markets, the minority stake in the West Terminal Port of Onne is located along the Africa Container Terminal (WACT) Bonny River near Port Harcourt in (WACT). JV partner is the Rivers State within the Onne Oil & Intels Group Nigeria Ltd. Gas Free Zone which was established in 1996 to serve the Nigerian oil and gas industry as well as other commercial enterprises. The West Africa Container Terminal (WACT) which serves a local market estimated to be 150,000 TEUs. Onne Port is also the largest oil support port in the Southern hemisphere, serving the important Nigerian oil industry.

Ormsund Oslo, Norway 960 250,000 Oslo is Norway’s largest port, serving ? 33% JV L APM Terminals holds a 33% Container the 4.5 million domestic market share in Ormsund Container Terminal through feeder service and short sea Terminal, the larger of the Port (OCT) shipping line connections to major of Oslo’s two container European hub ports. Oslo ranked facilities. The Oslo Port 244th globally in 2009 in terms of Authority supplies and container traffic. operates all STS cranes at the container terminals. Guangzh Nansha, China 9,260 4.2 mio GOCT is located in Nansha, which is ? Indirect M 41% owned by GPG with ou South at Southeast of Guangzhou City and at 20% JV operational management China the estuary of Pearl River. It is 70 km control. Oceangat from Guangzhou’s city center, 35 nm Paterners: COSCO Nansha e from Guishan Anchorage, 38 nm from (49%, of which 20% indirectly Container Hong Kong and 41 nm from Macau. held by APMT). Terminal Nansha Port is the only deep water Concession expiry date: year Co., Ltd container hub in West Pearl River 2035. (GOCT) GOCT covers the whole West Pearl River Delta.

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