Business

Editor: Bruce Meng
30 Oct 2008 03:14:20 GMT

WELLINGTON, Oct 30 – Two ports in New Zealand’s South Island are looking at merging to provide some much needed consolidation, the companies said on Thursday.

Lyttelton Port Company Ltd <LPC.NZ>, which serves the South Island’s largest city of Christchurch, and Port Otago Ltd will begin talks on the structure of a new port, and said the benefits will include increased productivity, operational efficiencies and the co-ordination of future developments.

"The need for port rationalisation within New Zealand has long been recognised. This investigation takes up that challenge," the companies said in a joint statement.

Ports in New Zealand are targeting consolidation as ship visits from major lines such as Maersk <MAERSKb.CO>, Hapag-Lloyd <HPLG.H>, CMA CGM and Hamburg Sud decline due to rationalisation and because of larger container ships that require only one New Zealand stop.

Shares in Lyttleton Port Company were untraded on Thursday, after closing on Wednesday at NZ$2.22.

A local council owns 75.5 percent of the shares in the company, while Port Otago holds 15 percent. Port Otago Ltd is wholly owned by a local council. New Zealand’s two largest ports, Port of Tauranga <POT.NZ> and Ports of Auckland, broke off talks on a potential NZ$1.6 billion ($936 million) merger last year. Port of Tauranga has said it believes a merger remains a logical move. ($1=NZ$1.71)