SHANGHAI - APM Terminals, the port operation division of AP-Moller Maersk Group, will resume investment in emerging Asian markets to cater to increasing intra-Asia cargo flow, the company's Chief Commercial Officer Martin Christiansen said in a recent interview.

Martin Christiansen, Chief Commercial Officer, APM Terminals

"We are actively looking for investment opportunities in emerging Asian markets such as China, Vietnam, India and Indonesia," Christiansen, who is also the head of the company's Asia-Pacific operations, said.

Expanding intra-Asia trade volume has been largely fueled by China's increasing appetite for imports and closer ties with the Association of Southeast Asian Nations, he said.

The Netherlands-based company owns stakes in 10 container terminals in China, which have not received further investment since 2009 because of the 2008 global financial recession.

The company sold its shares in the ports of Kaohsiung, Taiwan, in 2009 and Yantian, Guangdong province, in 2010 on the Shenzhen Stock Exchange to China Ocean Shipping (Group) Company (COSCO).

APM Terminals plans to sell half of its 50 percent stake in Xiamen port to Xiamen International Port Co, according to a July 25 statement by the Fujian-based company to the Hong Kong Stock Exchange.

Investment challenges

While stressing the Chinese market remains a priority, Christiansen admitted that there are some potential investment challenges in China, such as the rising costs of labor and property. But the valuation of ports is yet to offset rising costs, with nearly no increase in tariffs in recent years.

Most importantly, "the growth rate of China's container volume in the future is expected to be lower than the past, particularly China's export volume to mature markets such as the United States and the Europe", Christiansen said.

The dwindling growth rate is partly attributable to rising costs and yuan appreciation, which are posing a threat to China's reputation as the global manufacturing base. The country's coastal cities, which support a variety of labor-intensive manufacturing sectors, have been particularly hard hit. Some investors have shifted investments into neighboring countries where the cost of labor is lower. In 2010, Vietnam replaced China as the largest production base for Nike Inc, prompting widespread concerns that China might lose its attractiveness as a global manufacturer.

Sluggish economic recovery in the US and EU will further dent consumer demand, said Zhang Monan, an economist at the Economic Forecast Department of the State Information Center.

As the two economies continue to struggle with debt, "it is safe to expect a slowdown in the growth of container volumes worldwide", Zhang said.

Busiest ports

During the second quarter this year, the growth rate has been on the decline. In June, the export growth rate was 17.9 percent year-on-year, half of the figure for March, data from the Ministry of Commerce showed.

"The window of opportunity to invest in Chinese ports is closing and there are more and better investment opportunities in other emerging markets, despite the lack of infrastructure in those markets," Christiansen said.

"We will focus more on how to facilitate the growing segment of imports into China in the future," he said.

However, given China's size, the country will still remain an attractive investment option. According to a July report by the Chinese Academy of Sciences, Chinese ports will remain the busiest in the world and half of the top 20 container ports are in China this year.

The report said the country will remain the world's largest manufacturing base in the near future and ports in China as well as neighboring countries will benefit from it.

"China's vast manufacturing industry is difficult to replace. We do not see a big risk of a massive sourcing shift out of China in the near future," Christiansen said.

"China will remain one of the most important markets for us."