South Korean liner operator SM Line Corporation is planning to sell its terminal in Gwangyang port to Gwangyang West Container Terminal (GWCT), a subsidiary of compatriot conglomerate CJ Corporation.
The planned sale is part of a push by the private sector to consolidate container terminals, as the government has expressed concern of an oversupply due to flat cargo growth. Regulated by Yeosu-Gwangyang Port Authority, Gwangyang is South Korea’s second-busiest container port after Busan.
SM Line, which was formed from the Samra Midas group’s acquisition of the remaining business of the now-defunct Hanjin Shipping, has signed a memorandum of understanding (MoU) with GWCT to sell the terminal for KRW6 billion to KRW8 billion (US$5 – 6.7 million).
Initially, in February 2020, SM Line was in talks to sell its Gwangyang terminal to Korea International Terminals (KIT), a subsidiary of Hutchison Port Holdings.
However, although an MoU was signed, with a deadline for a sale by 5 May, negotiations reportedly broke down as KIT could not agree to SM Line’s request to absorb all the staff of the terminal operating subsidiary, SM Line Gwangyang Terminal.
A YGPA official said, “If the merger is successful, it will be a good opportunity to solve the problem of oversupply of terminals at Gwangyang Port through voluntary restructuring of local terminal operators.
“The private sector is leading the way to solve the oversupply of terminals that the government has not been able to do, and the government should also provide some incentives for these companies to streamline their terminal assets,” said the official.
Martina Li
Asia Correspondent
