INDUSTRY OVERVIEW

The information provided in this section is derived from various official and/or government publications. Official government sources have not been prepared or independently verified by the Company, the Sponsor, the Underwriters or their respective directors or advisers. The Company, the Sponsor, the Underwriters, their respective directors and advisers and all other parties involved in the Share Offer make no representation as to the accuracy or completeness of any official government information, which may not be consistent with information compiled from other sources, and accordingly the official government information contained in this section may not be accurate and should not be unduly relied upon.

GLOBAL PORTS INDUSTRY

The Global Container Ports Industry

The global container ports industry has experienced significant growth in the last decade. According to the United Nations, aggregate global throughput as measured by TEUs increased from approximately 128 million TEUs in 1994 to 266 million TEUs in 2003, representing a CAGR of 8.5%.

The table below sets out the top 10 ports in the world in terms of total throughput for the year 2004, of which the port of experienced the highest growth rate in throughput for such year:

Rank Port Country Region 2004 2003 Growth (million (million (%) tonnes) tonnes)

1 Singapore Singapore Southeast Asia 388 320 21.1 2 Shanghai PRC East Asia 380 315 20.4 3 Rotterdam Northwest Europe 354 328 8.0 4 South Louisiana USA North America 249 239 4.0 5 Ningbo PRC East Asia 226 185 21.9 6 Hong Kong PRC East Asia 220 206 6.9 7 Guangzhou PRC East Asia 215 171 25.8 8 Houston USA North America 207 190 9.0 9 Tianjin PRC East Asia 206 162 27.4 10 Nagoya Japan Northeast Asia 180 172 4.6

Source: Ministry of Communications Maritime Science Research Institute

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The table below shows the top ten container ports in the world in terms of container throughput for the year 2004:

Rank Port Container throughput in 2004 (million TEU)

1 Hong Kong 21.9 2 Singapore 20.6 3 Shanghai 14.6 4 Shenzhen 13.6 5 Pusan 11.4 6 Kaohsiung 9.7 7 Rotterdam 8.2 8 Los Angeles 7.3 9 Hamburg 7.0 10 Dubai 6.4

Source: Ministry of Communications Maritime Science Research Institute

Global Non-containerised Cargo Industry

Non-containerised cargoes consist of a wide variety of goods including coal, iron, iron ore, steel products, construction materials, grain, fertilisers, agricultural products and salt.

China’s non-containerised cargo throughput grew very significantly during the last ten years, even though the total volume of non-containerised cargoes in the world grew only moderately during that period. Globally, there has been a pronounced trend towards containerisation of cargoes, and in , too, the volume of containerised cargoes has accelerated faster than the volume of non-containerised cargoes.

Growth Drivers of the Global Ports Industry

• Globalisation of the world economy

One of the key drivers of the growth of the global ports industry has been the increase in international trade. Developments, such as improvements in world-wide communications systems and transport and trade links, and diplomatic initiatives, including China’s accession to the WTO, make it easier for companies to source their products globally, thereby contributing to the growth in the ports industry.

• Relationship between global economic growth and international trade

Growth in the volume of global trade is heavily influenced by global economic growth. The world’s GDP and value of foreign trade have grown considerably in recent years. According to the International Monetary Fund, the world’s economy grew by 5.1% while foreign trade grew by 9.0% during 2004.

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• Development of the international container shipping industry

The international shipping industry has developed rapidly in recent years, both in terms of the number of shipping vessels plying trade routes as well as the size and capacity of containerships. Among all regions of the world, Asia, in particular, has witnessed rapid growth in the shipping industry. According to the Review of Maritime Transport 2003 published by the United Nations, each of Japan, China, Hong Kong, , Taiwan and Singapore ranked among the 10 most important maritime economies in terms of ship ownership. At the beginning of 2004, the world had 3,054 container ships with a total TEU capacity of 6,437,218, up from 2,755 and 5,356,650, respectively, from a year earlier.

• Growth in the PRC economy and trade

China’s GDP and the value of its foreign trade has grown significantly in recent years. According to the PRC National Bureau of Statistics, China’s GDP rose from RMB5,847.8 billion (equivalent to approximately HK$5,622.9 billion) in 1995 to RMB13,651.5 billion (equivalent to approximately HK$13,126.44 billion) in 2004, representing a CAGR of 9.9%. Between 1995 and 2004, the value of China’s total foreign trade rose from US$280.9 billion (equivalent to approximately HK$2,190.7 billion) to US$1,154.8 billion (equivalent to approximately HK$9,007.4 billion), representing a CAGR of 17.0%.

THE PRC PORTS INDUSTRY

Overview

According to the China Ports Year Book 2004, there were approximately 60 sea ports in China in 2004. These sea ports include:

• Bohai rim sea ports including the ports of Tianjin, Qinhuangdao and as well as Jiaodong peninsular ports including the port of Qingdao;

• River delta ports including the ; and

• ports including the ports of Shenzhen and Guangzhou.

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The following map illustrates the principal container terminal hubs in the PRC:

Bohai Bay Rim Hub

Dalian Ga nsu Tianjin

Qingdao

Shanghai Yangtze River Ningbo Delta Hub

Xiamen

Guangzhou Shenzhen

Pearl River Delta Hub

China’s ports industry has developed rapidly in recent years. Many new terminals have been constructed, including several world-class terminals able to accommodate the world’s largest container ships of 10,000 TEUs. In addition, there has been substantial growth in port throughput in China. According to the Ministry of Communications, port throughput in China grew by 26.6% in 2004. China’s principal trade partners include the US, the European Union and Japan. According to US Customs, approximately 7.7 million TEUs out of an aggregate of 15.8 million TEUs imported into the US in 2004 came from China (including Hong Kong and Taiwan).

The table below shows the growth in terms of aggregate throughput, further divided into domestic trade and foreign trade, at major sea ports in China for the years indicated:

Compound Compound Compound Annual Annual Annual Growth over Domestic Growth over Foreign Growth over Aggregate previous Trade previous Trade previous Year Throughput period Throughput period Throughput period (million (million (million tonnes) (%) (tonnes) (%) tonnes) (%)

1995 801.7 – 491.8 – 309.9 – 2000 1,256.0 9.4 732.6 8.9 523.4 11.1 2004 2,460.7 18.3 1,413.7 17.9 1,047.1 18.9

Source: National Communications Statistical Material Compilation《全國交通統計資料匯編》

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The table below shows the breakdown of total throughput in terms of container cargo and non-containerised cargo at major sea ports in China for the years indicated:

Compound Compound Annual Non- Annual Container Growth over containerised Growth over Cargo previous Cargo previous Year Throughput period Throughput period (million TEU) (%) (million tonnes) (%)

1995 5.5 – 753.1 – 2000 20.6 30.2 1,106.3 8.0 2004 56.6 28.7 2,028.1 16.4

Source: National Communications Statistical Material Compilation《全國交通統計資料匯編》

PRC Container Ports Industry

China’s container port throughput has increased significantly in recent years. According to the National Communications Statistical Material Compilation, China’s container throughput rose from 5.5 million TEUs in 1995 to 56.6 million TEUs in 2004, representing a CAGR of 29.6%.

The table below shows container throughput at major sea ports in China broken down into domestic and foreign trade, and full and empty containers, respectively, for the years indicated:

1995 2000 2003 2004 (million TEU) (million TEU) (million TEU) (million TEU)

Domestic trade – 3.8 9.6 12.7 Foreign trade – 16.8 34.9 43.9 Total throughput: 5.5 20.6 44.5 56.6

Full container 3.9 14.1 29.8 37.9 Empty container 1.6 6.5 14.8 18.7 Total throughput: 5.5 20.6 44.6 56.6

Source: National Communications Statistical Material Compilation《全國交通統計資料匯編》

Note: Domestic/foreign breakdown for 1995 is not available.

PRC Non-containerised Cargo Industry

There has been a steady growth in the non-containerised cargo industry in China in recent years. According to the Ministry of Communications, the total trading volume of non- containerised cargo at major sea ports in China was 2,028.1 million tonnes in 2004, an increase of 21.6% compared to 2003.

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The table below shows the total throughput of non-containerised cargo in respect of coal, oil, metal ores and grains at major sea ports in China for the years indicated:

Year Coal Oil Metal Ores Grains (million (million (million (million tonnes) tonnes) tonnes) tonnes)

1995 232.4 129.6 85.9 43.1 2000 325.4 234.0 118.9 56.2 2004 571.1 350.5 317.7 71.6

Growth rate: CAGR (1995 to 2004) (%) 10.5 11.7 15.6 5.8 CAGR (2000 to 2004) (%) 15.1 10.6 27.9 6.3

Source: National Communications Statistical Material Compilation《全國交通統計資料匯編》

PRC Port Tariff Policy

Containerised and non-containerised cargo handling fees are subject to regulation by the Ministry of Communications. Handling fees for domestic non-containerised trade were liberalised in 2005 and terminal operators are now able to set their own fees for most related services. However, handling fees for containerised cargo and foreign trade related non- containerised cargo remain subject to regulation by the Ministry of Communications, which stipulates prescribed fees for the provision of such services. Foreign trade-related fees were last adjusted by the Ministry of Communications in 2001 and, prior to that, in 1997. The adjustment in 2001 resulted in a moderate increase for most fees. However, foreign-invested enterprises are not required to follow the tariffs published by the Ministry of Communications. In addition, terminal operators are also allowed to give discounts to major customers.

PORT OF TIANJIN

Overview

The port of Tianjin is located in the economic centre of north China. It is 170 kilometres away from on the west side of the and is the ocean gateway for the cities of Beijing and Tianjin and the province of . The port of Tianjin is also an important sea access point for many inland provinces, including , , Sha’anxi, , , Sichuan, Inner Mongolia, and . The port of Tianjin is also the eastern starting point for the Asia-Europe continental bridge. The port of Tianjin was the first container port in China and it had China’s first international container route back in 1973.

The port of Tianjin stands to benefit from recent PRC government policy. In its 11th Five Year Plan, the port of Tianjin was designated by the PRC government as the principal gateway to the hinterland of north and northwest China. At the same time, the 11th Five Year Plan also emphasised acceleration of the development of the Tianjin- Coastal Area, which encompasses the port of Tianjin, as a key element of advancing the regional economy and one of the important components of the four principal goals of the 11th Five Year Plan.

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The port of Tianjin consists of a sea port and a river port. The sea port is known as the Tianjin New Port, while the river port is known as the Tanggu Port. Tianjin New Port is divided into three districts, namely Beijiang（北疆）, Nanjiang（南疆）and Haihe（海河）.

Tianjin New Port is the biggest artificial harbour in China, being approximately 200 square kilometres in size. It currently has 98 berths, 52 of which have capacity of over 10,000 tonnes (three of which have a capacity of more than 100,000 tonnes). Tianjin New Port’s coastline is 19,380 metres long and has an aggregate capacity of 159,170,000 tonnes.

In 2004, the port of Tianjin was the fourth largest port in China in terms of aggregate throughput and one of four ports in China with an annual throughput exceeding 200 million tonnes. The port of Tianjin was ranked fifth in China in 2004 in terms of container throughput. The following tables show the top ten ports and container ports in China, as measured by aggregate throughput and container throughput:

Aggregate Throughput Container Throughput Rank Port 2004 Rank Port 2004 (million tonnes) (million TEU) 1 Shanghai 379 1 Shanghai 14.55 2 Ningbo 226 2 Shenzhen 13.66 3 Guangzhou 215 3 Qingdao 5.14 4 Tianjin 206 4 Ningbo 4.01 5 Qingdao 163 5 Tianjin 3.82 6 Qinhuangdao 150 6 Guangzhou 3.30 7 Dalian 145 7 Xiamen 2.87 8 Shenzhen 135 8 Dalian 2.21 9 Shanghai (River) 106 9 Zhongshan 0.93 10 Nanjing 96 10 Fuzhou 0.71

Source: National Communications Statistical Source: National Communications Statistical Material Compilation Material Compilation 《全國交通統計資料匯編》 《全國交通統計資料匯編》

The port of Tianjin has developed rapidly. According to the Tianjin Statistical Year Book 《天津統計年鑒》, aggregate throughput has surged from approximately 57.9 million tonnes in 1995 to 95.7 million tonnes in 2000 and to 206.2 million tonnes in 2004, representing a CAGR of 15.2% between 1995 and 2004 and 21.2% between 2000 and 2004.

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The following table shows the growth in aggregate throughput of the port of Tianjin for the last ten years. Both domestic trade-oriented and foreign trade-oriented throughput have increased significantly at CAGRs of 22.0% and 20.4%, respectively, between 2000 and 2004.

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 (10,000 tonnes)

Domestic trade 2,252.5 3,034.6 3,048.9 3,342.4 3,438.3 4,431.5 5,197.1 5,899.5 7,423.6 9,827.3

US 411.9 339.8 379.8 389.5 349.3 561.1 444.8 486.2 463.2 810.9 Japan 603.0 583.4 638.1 503.7 660.7 805.4 774.3 860.3 988.0 1,068.4 EU 824.0 616.3 709.1 676.4 730.9 761.4 941.8 1,016.6 1,147.3 1,604.7 Other 1,695.3 1,614.2 2,013.3 1,906.4 2,118.5 3,006.9 4,011.1 4,643.8 6,158.7 7,307.7 Total Foreign trade 3,534.2 3,153.7 3,740.3 3,476.0 3,859.4 5,134.8 6,172.0 7,006.9 8,758.1 10,791.7

Total 5,786.7 6,188.3 6,789.2 6,818.4 7,297.7 9,566.3 11,369.1 12,906.4 16,181.7 20,619.0

Source: Tianjin Statistical Year Book《天津統計年鑒》

According to the “Master Plan for the Port of Tianjin”《天津港總體規劃》 jointly approved by the Ministry of Communications and the People’s Government of Tianjin in 2004, it is projected that total throughput at the port of Tianjin will reach 300 million tonnes by 2010, including 10 million TEUs in 2010. Based on these estimates, which were made before the introduction of the 11th Five Year Plan that has since brought an even greater focus on the development of the port of Tianjin as the principal international trading and logistics hub for northern China, container throughput is expected to grow at a CAGR of 17.4% between 2004 and 2010, while aggregate throughput is expected to grow at a CAGR of 6.4% between 2004 and 2010.

According to the Tianjin Statistical Year Book《天津統計年鑒》 , container throughput at the port of Tianjin increased dramatically from approximately 700,000 TEUs in 1995 to approximately 3.8 million TEUs in 2004, representing a CAGR of 20.7%. The containerisation rate of general cargo at the port of Tianjin port has also been accelerating, and containerised cargo increased from approximately 12.2% of volume handled in 1995 to approximately 20.9% in 2004. The table below sets out the container throughput of the top eight ports in China. In terms of containerised throughput in 2005, the port of Tianjin recorded the highest growth in the Bohai Rim, surpassing ports of Qingdao and Dalian, and was ranked the third amongst the top 8 ports in China.

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CAGR 2004- 2000- 2000 2001 2002 2003 2004 2005 2005 2005 (’000 TEUs) (%) (%)

Shanghai 5,612 6,340 8,612 11,282 14,554 18,084 24.3 26.4 Shenzhen 3,994 5,076 7,618 10,650 13,659 16,197 18.6 32.3 Qingdao* 2,120 2,639 3,410 4,239 5,140 6,307 22.7 24.4 Ningbo 902 1,213 1,859 2,772 4,005 5,208 30.0 42.0 Tianjin* 1,708 2,011 2,408 3,015 3,816 4,801 25.8 23.0 Guangzhou 1,431 1,738 2,173 2,769 3,304 4,683 41.7 26.8 Xiamen 1,085 1,293 1,754 2,331 2,872 3,342 16.4 25.2 Dalian* 1,011 1,217 1,352 1,670 2,212 2,655 20.0 21.3 Sum of top 8 PRC ports 17,863 21,527 29,186 38,728 49,562 61,277 23.6 28.0

Source: China Ports Yearbook 2005 and www.portcontainer.com

Note: * Ports in Bohai Bay rim

Throughput of non-containerised cargo at the port of Tianjin during the period from 1995 to 2004 also increased steadily. According to the National Communications Statistical Material Compilation《全國交通統計資料㶅編》 , total throughput rose from 50.8 million tonnes in 1995 to 163 million tonnes in 2004. The major types of non-containerised cargo in Tianjin port are coal, iron ore, steel, chemical products, agricultural products and grain.

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Hinterland and Transportation

The following map illustrates the provinces and regions for which the port of Tianjin usually handles seabound cargo:

Xinjiang

Gansu Inner Mongolia Beijing Tianjin Port Ningxia Hebei Qinghai Shanxi Henan

Sichuan

Areas for which the port of Tianjin is a sea access point Railway Highway

The port of Tianjin has a very large hinterland. It is the principal sea access point for the two directly governed municipalities of Tianjin and Beijing and the province of Hebei, as well as an important sea access point for the provinces of Henan, Shanxi, Sha’anxi, Ningxia, Qinghai, Sichuan, Inner Mongolia, Gansu and Xinjiang. Tianjin lies among a group of important medium-sized cities which are located within 300 kilometres of the port of Tianjin, including Tangshan, , and Xingtai. The regions from which the port of Tianjin derives its cargo volume are responsible for a significant portion of China’s industrial manufacturing, including textiles and machinery, and the production of raw materials. The hinterland is linked to Tianjin by a number of convenient transport methods, including railway, road, river and pipe line.

Road networks are generally more effective for short distance transportation between neighbouring cities and areas; both road and railway are of equal importance in respect of medium distance transportation from the port of Tianjin to Shanxi, Inner Mongolia, Henan and Shanxi provinces; whereas railway has a competitive strength for long distance transportation to and from Ningxia, central and southern areas of Shangxi, Gangsu, Qinghai, Xinjiang and other distant places.

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Future Development of Tianjin Port

In its 11th Five Year Plan released in March 2006, the PRC government designated the port of Tianjin as the principal gateway to the hinterland of north and northwest China. The stated goal of the PRC government is to establish the port of Tianjin as the principal international trading port and logistics hub for northern China. The 11th Five Year Plan also emphasises acceleration of the development of the Tianjin-Binhai Coastal Area, which encompasses the port of Tianjin, as a key element of advancing the regional economy.

According to the “Master Plan for the Port of Tianjin” (“天津港總體佈局計劃”) approved by the Ministry of Communications and the People’s Government of Tianjin in 2004 and prior to the introduction of the 11th Five Year Plan, Tianjin will become the core container port and the centre of non-containerised cargo logistics and international logistics for northern China. The major developments over the coming years will include the construction of a professional container terminal operation area, developing large-scale modern logistics, constructing dedicated non-containerised cargo (such as coal and mineral ore) berths and liquid cargo (such as crude oil) berths as well as converting the principal navigation channel into a deep navigation channel capable of handling shipping vessels up to 250,000 tonne class. The “Master Plan for the Port of Tianjin” provides:

• Separation of the port of Tianjin into five designated port areas

The port of Tianjin in its entirety will be divided into five port areas, namely, Beijiang（北疆）, Nanjiang（南疆）, Haihe（海河）, Beitang（北塘）and Lingang Industrial Port（臨港工業港）.

Beijiang（北疆）, of which the Beigangchi（北港池）area is a part, will principally handle container transportation and provide supplemental cargo and coastal passenger transportation facilities. It will be developed into a comprehensive and multi-functional port area capable of providing modernised logistics services, along-the-port processing, delivery, distribution, warehousing within the Tax Concession Zone, and other general financial and commercial services.

Nanjiang（南疆） will be developed into a specialised cargo port area to handle the transit transportation for non-containerised cargo such as coke, coal, iron ore, oil and liquefied chemical products.

Haihe（海河） will principally handle domestic trade-related transportation within the city of Tianjin and provide transportation, storage, transfer and processing services to companies situated along the . It will also provide tourism-related services.

Beitang（北塘） will handle small quantity cargo transportation and ocean-bound pleasure cruising（海上旅游）.

Lingang Industrial Port（臨港工業港）will be a new industrial port area to the south of Haihe, to provide transportation services for large petrochemical enterprises along the coastal area of the city of Tianjin.

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• Throughput

Annual throughput at the port of Tianjin reached 240 million tonnes in the year 2005 (including approximately 4.8 million TEUs) and should reach 300 million tonnes by 2010 (including 10 million TEUs).

• Implementation of certain works in phases

The Master Plan for the Port of Tianjin contemplates implementation of the following works in certain phases:

– completing a 150,000 tonne navigation channel by the end of 2005 and exploring the possibility of deepening it further. Expanding the navigation channel further between 2005 and 2010 to enable the two-way passage of large scale container vessels;

– continuing the containerisation reform project at the existing terminals and the stacking yards located at the Beijiang port area before any substantial progress on the development of Beigangchi（北港池）Project is made. Completing 10 to 15 “20-50 thousand tonne container berths” by the end of 2005;

– commencing construction of five berths for phase one of the Beigangchi （北港池）Project between 2006 and 2007;

– completing the construction of Beida Breakwater Project（北大防波堤建設工程） by the end of 2005;

– completing the development project of a 2,400 metre coastline to the east of the Tax Concession Zone by 2010;

– commencing the terminal construction project to the south of Wugangchi（五港池） on or before 2010;

– completing the construction of the port of Tianjin cargo logistics centre by 2005; taking measures to enhance the passing capacity of the existing Nanjing Bridge and commencing the construction of Nanjiang Second Bridge（南疆二橋） at an appropriate time;

– directly linking the Beijing-Tianjin-Tanggu Expressway（京津塘高速公路）to the port of Tianjin around 2005. Constructing the segmental railway parking lot from west of Beitang to the comprehensive logistics zone（自北塘西至綜合 物流園區的鐵路分區車場）in phases through co-operation with the relevant railway authorities;

– intensifying the development and construction of port information technology network system immediately; and

– planning and coordinating the construction plans for large scale crude oil and iron ore terminals; facilitating, creating opportunities, planning and reserving in advance for new projects; contacting cargo owners at the appropriate time.

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For further details in respect of future development at the port of Tianjin, please also see the section headed “Relationships with Tianjin Development and Tianjin Port Group – Relationship with Tianjin Port Group – Role of Tianjin Port Group”.

COMPETITION

Introduction

Sea ports generally only compete with each other where they are in close geographic proximity and are therefore able to service the same hinterland area, although there is greater competition for transhipment business. While the port of Tianjin competes with other northern China ports to some extent, assuming that companies will generally seek to minimise transportation costs by using the port that is most conveniently located to the point of origin, the ports largely only compete for consignments from regions in the middle of their respective hinterland areas and where transportation services and costs from the point of origin to the port would be comparable. The ports located within closest proximity to Tianjin and which are most likely to offer competition to Tianjin are:

• Qinhuangdao, located approximately 200 kilometres to the north-east of Tianjin on the of Hebei Province;

• Dalian, located on the southern tip of the Liaodong peninsular and the eastern edge of the ; and

• Yantai and Qingdao, both located in Shandong Province to the south-east of Tianjin.

Within each port, different terminal operators may also compete against each other. As all ports operators in the PRC are required to charge fees to customers in accordance with Ministry of Communications prices (other than for domestic non-containerised cargo handling), terminal operators at the port of Tianjin compete primarily on the basis of the timeliness of services provided, which in turn is reflected in the time taken for a ship to dock at an unoccupied berth and the efficiency of the loading and unloading process. Terminal operators also compete on the basis of the quality and accuracy of services provided, including the avoidance of damage to goods, as well as on the basis of the breadth of services offered.

In 2004, the Tianjin Communications Commission became the administrative governmental body responsible for the development of the port of Tianjin, including in respect of new terminal developments. On 24 January 2006, the Tianjin Communications Commission issued a written confirmation to us confirming that there is no longer any allocation of business at the port of Tianjin and it treats all operators at the port in a fair manner, including with respect to new investment opportunities at the port of Tianjin. For further details, please refer also see the section headed “Relationships with Tianjin Development and Tianjin Port Group – Relationship with Tianjin Port Group – Confirmation from the Tianjin Communication Commission”.

For further details in respect of competition at the port of Tianjin, please also see the section headed “Relationships with Tianjin Development and Tianjin Port Group – Relationship with Tianjin Port Group – Role of Tianjin Port Group”.

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Containerised Cargo

As at 31 December 2005, there were six companies located at the port of Tianjin with container handling operations for ocean bound vessels, including our two wholly-owned subsidiaries, Tianjin Container and Tianjin Second Stevedoring. Tianjin Container is the longest established container handling company in Tianjin and has consistently had the highest container throughput of all operators at the port of Tianjin. The following table sets out the throughput (in TEUs) for the six container handling companies for the periods shown:

Year ended 31 December Operator 2003 2004 2005

Our operations: Tianjin Container 1,351,130 1,546,691 1,750,009 Tianjin Second Stevedoring 140,000 261,800 300,043

Tianjin Port Group: Tianjin First Stevedoring 414,866 476,860 500,081 Tianjin Passenger Transport Company 329 408 568

Tianjin Port Limited: DPI Orient (Tianjin) 1,108,263 1,128,034 1,130,083 Tianjin Five Continents – 401,433 1,120,058

Source: Tianjin Port Statistical Material Compilation《天津港統計資料匯編》

On the basis of publicly available information, we understand that Tianjin Port Group and Tianjin Port Limited are the largest shareholders of each of the other container handling operators at the port of Tianjin. Tianjin First Stevedoring and Tianjin Passenger Transport Company are both wholly-owned subsidiaries of Tianjin Port Group. Tianjin Port Limited is a company listed on the Shanghai Stock Exchange and is 50.08% owned by Tianjin Port Group. Tianjin Port Limited owns a 51% interest in DPI Orient (Tianjin), with the remaining 49% owned as to 24.5% by Dubai Ports International and as to 24.5% by NWS Holdings Limited (“NWS”), a company listed on the Stock Exchange. Tianjin Five Continents is a joint-venture with Tianjin Port Limited, NWS and three other joint-venture partners holding 40%, 18%, 14%, 14% and 14% equity interests, respectively. Tianjin Port Group also has a 40% interest in Tianjin Port Alliance, a company that is a joint-venture between Tianjin Port Group and three other parties that is in the process of constructing a new container handling facility at the port of Tianjin currently scheduled for completion in 2008 that, when completed, will compete with our container handling operations and have a design handling capacity of approximately 1.7 million TEUs.

According to long-term plans outlined by Tianjin Port Group and approved by the Tianjin Communications Commission, the total coastal length of the Beijiang port area will eventually reach 22 kilometres, including a total length of 11 kilometres dedicated to container terminals.

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Non-containerised Cargo

Unlike container-handling, the handling of non-containerised cargo generally requires specially designed equipment. Of the non-containerised cargo handling companies at the port of Tianjin, we are equipped to handle the widest variety of cargo types. The principal cargoes that we handle include steel, iron ore, coal, grain and soy beans. We operate the only dedicated grain handling terminal at the port of Tianjin as well as the only refrigerated warehouse equipped for handling fruits and vegetables. The other principal non-containerised cargo stevedoring companies at the port are Tianjin Third Stevedoring, Tianjin Fourth Stevedoring and Tianjin Fifth Stevedoring, of which Tianjin Third Stevedoring and Tianjin Fourth Stevedoring are subsidiaries of Tianjin Port Group, and Tianjin Fifth Stevedoring is a subsidiary of Tianjin Port Limited.

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