Kingston Wharves secures free zone status - Logistics hub investment in the pipeline
Avia Collinder, Business Reporter
Mark Williams, chief operating officer for Kingston Wharves Limited (kwl), confirmed on Thursday that the port company has been granted free zone status, paving the way for a new investment project.
Williams, however, was shy on the details, saying only that it would be related to port development and the logistics hub programme.
"We are about to announce some major capital investments," he told the Financial Gleaner.
"There are some persons that we need to speak to first. Because of that we would rather not speak with the media at this time," he told the Financial Gleaner.
The approval granted to KWL by the Ministry of Industry, Investment and Commerce appears to counter a previous announcement that all free zones were being phase out by 2015 to conform with international trade rules.
Ministry Consultant Reginald Nugent confirmed the phase-out on Thursday, but said the ministry would continue nevertheless to approve free zone status for qualified applicants in the interim.
He offered no explanation for the approach.
The ministry plans to designate some 16 special economic zones, SEZs, in their stead and as complement to the logistics hub programme , which it leads.
Creation of the SEZs - with the Caymanas Economic Zone expected as the first or at least one of the early designees - requires legislation to codify their structure and operation, ministry officials indicated back in January.
Exempt from certain taxes, duties
Free zone companies are permitted to import items free of customs duty, value-added tax, such as GCT, and other port- related taxes and charges "for an indeterminate period," says Jampro's website.
Profits earned are also free from income tax for an indeterminate period.
To qualify, at least 85 per cent of goods produced within the zone must be exported.
The directors of Kingston Wharves have made it clear in the company's 2013 annual report that they plan to go after a market which is forecast to almost triple by 2030.
Chairman and CEO Grantley Stephenson, who on Thursday was said to be out of office and would be travelling, said in the report that 16 years from now, the value of goods transiting the Nicaragua and Panama canals will exceed US$1.4 trillion "making this one of the most important trade routes in the world".
Noting that Jamaica is strategically located to capitalise on this movement, he said: "An examination of the KWL group's domestic versus trans-shipment business indicates that opportunities are within the trans-shipment arm of the business" and that the company must strategically diversify its operations.
Its last deal announced, in March, was the acquisition of the stevedoring business of Allied Trucking & Maritime Services Limited for US$2.95 million, payable over three years.
KWL was founded in 1945. Its last big project was the expansion of berths eight and nine in 2006. The port company operates a 25-hectare terminal, comprising 22 hectares of open storage with 30,000 square metres of covered warehousing and cold storage. It also operates a dry dock, spanning 53,000 square metres, used for the storage of motor vehicles.
The company is valued at $4.2 billion by revenues and $17 billion by assets. Its top three owners are: Jamaica Producers Group, 30.19 per cent, National Commercial Bank Jamaica, 25.23 per cent and Shipping Association of Jamaica Property Limited, 11.81 per cent.