Grantley Stephenson, managing director and chairman of Kingston Wharves Limited. - Contributed

Keith Collister, Business Writer

In four years since its acquisition by a local group, Kingston Wharves Limited has invested $3 billion in the ongoing redevelopment and expansion of its five-decade-old port operations, carving out a niche in vehicle transhipment for itself in the process.

The build-out of the company's berths eight and nine, with $1.1 billion spent on that project in 2006, was 45 per cent complete at year end and is to be wrapped up by June.

That project will allow Kingston Wharves to handle larger ships of up to 13 metres in draft and carrying bigger cargo loads.

"In addition to the Berths 8 and 9 project," said managing director and chairman Grantley Stephenson in a statement to shareholders, "the company continued its acquisitions of land in Newport West area to improve its efficiencies as well as facilitate future port expansion."

Stephenson anticipates that it will take another $5 billion in capital expenditure over the next few years to fully reshape KW's infrastructure, he told the Financial Gleaner, and position it to successfully compete with other regional players such as Trinidad or even Freeport in the Bahamas.

The company, formerly owned by GraceKennedy Limited, was sold by the conglomerate in 2003 to a group of local investors comprising National Commercial Bank, the Kingston Port Workers Fund and the Shipping Association of Jamaica.

Then KW's performance was anaemic.

But since the change of ownership and the injection of capital, Kingston Wharves - now one of the few true growth stocks in the Jamaican stock market - has almost doubled its revenues from $1.16 billion to $2.33 billion, and has grown its profits six fold from $63.5 million to $408 million attributable to stockholders at its financial year ending December 31, 2006.

Its programmes are heavily financed by debt - its long term loans have more than doubled from $650 million in 2005 to $1.5 billion in 2006, and its debt servicing charges have similarly climbed from $41.5 million to $107 million in the current period.

Over the period of new ownership, the company's performance has been consistent, recording sharp growth in both revenues and profits in real terms every year.

Stephenson, insists there is nothing accidental about the company's performance, saying in a Financial Gleaner interview that it flowed from a deliberate plan to match operational efficiency with the best in the region.

He now believes Kingston Wharves is ahead of the compe-tition in key operating areas, having recently copped an award as the best multipurpose facility in the Caribbean and Central America region.

One measure of operational efficiency is container 'moves' per hour. KW has tripled its per-formance with the number of moves now averaging 24 per hour as opposed to eight.

Collaboration

Much of the company's growth over the past three years has come from Kingston Wharves' collabo-ration with the Kingston Container Terminal, a state-owned operation of the Port Authority of Jamaica whose container movements and transhipment business valued on assets of about $33 billion is near seven times Stephenson's $7.6 billion operation.

Much of Kingston Wharves' growth has been built on the forwarding of containers to smaller regional ports, such as Guyana, that the major shipping lines based at KCT, such as Israel's ZIM, are unable to serve directly.

Such ports can only accommodate smaller ships, creating business opportunities for companies like KW.

In that sense, said Stephenson, his company complements the operations at KCT, not compete with it.

KW also tranships cars from the Far East bound for markets across the region. The vehicles arrive in Kingston on specially built vessels and are routed to their different country destinations from Jamaica.

Its transhipment moves per annum has more than quadrupled from 11,223 in 2003 to 46, 318 in 2006.

Over the past decade however, growth in domestic cargo moves has been almost flat. Stephenson expects no significant improvement there in the year ahead.

Another area of revenue growth for Kingston Wharves has been stevedoring (the loading and unloading of ships), which until 2004 provided no revenue as it had always been done by third parties.

"In 2006, approximately 20 per cent of the company's revenues were derived from stevedoring which made this activity one of the largest sources of revenue," said Stephenson.

The rebuilding of its main berths, eight and nine, includes dredging to allow access for ships with a draught of 43 feet as opposed to the previous 30 feet. Each berth is to be 1,200 feet in length.

Kingston Wharves now has three cranes, but plans to acquire more under the expansion project. It has already acquired a software package for wharf management that deals with all the required processing of information elec-tronically, and identifies storage space for containers.

The software also allows KW to identify each container's unique location even while it is in transit.