Investments raised the Port to a new level



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Investments raised the Port to a new level

The largest investments in the history of the Port of Klaipėda, implemented last year, now provide tangible fruits. In 2013, 301 million litas excluding VAT were invested in the infrastructure of the Port of Klaipėda - three times higher than the investment in 2012, or two times higher than at any time during the period of one year throughout the entire life of the Port. For the investments in the Port’s infrastructure, 50 times more European Union (EU) funds were used than in 2011. Due to the work performed this year, the Port of Klaipėda has entered a new era - the Port is becoming from a feeder port into a hub port – i.e. cargo distribution centre where containers and bulk cargo are distributed to the entire Baltic Sea region.

“Due to the implemented huge investments, the prestige of our only Lithuanian Port is rapidly raising at the international level. We are very happy that the importance of the Port and the ongoing investment are valued and understood by our politicians. A huge achievement was that we were able to persuade the Government and the Parliament that it is not required to use profits in order to plug the holes in the budget of the Klaipėda State Seaport Authority. In 2013, the profit of 81.4 million litas was received; in accordance with the previous model, almost half of that amount would be taken from the Port. There is no need to prove that the Port’s assets make the best investments because it gives a return period of 2.5 years. Such a payback is staggering not only for a state company, but in business generally”, said the Director General of the Klaipėda State Seaport Authority Mr Arvydas Vaitkus.

It is estimated that the state investments in the infrastructure of the Port of Klaipėda attract two times the private capital investment in the property designed for logistics, shipbuilding and repair services. The very Port can properly invest the state assets into the state property, improving it and creating the additional value. What is created in the Port largely determines how the revenues of almost 800 companies will be generated. About 23 000 people are employed at the Port and Port-associated companies.

“Statistics shows that our Port is the fastest growing port in the Baltic Sea; during the last decade, the load of the Port of Klaipėda has been increasing about 7 percent every year. The closest competitors of the Port are the ports located to the north of Klaipėda. Constant investments, modernization and construction of new terminals allow to successfully compete with the neighbouring ports and gravitate to a leading position. This factor has been assessed also by our business partners from abroad. For instance, transit cargo from Belarus increased even by a quarter in the first half of this year – such a leap in turnover was determined by the increased carriage of food products, fertilizers, feeds, containers and other goods.”, said A. Vaitkus.



Investments of SE Klaipėda State Seaport Authority

Implemented investments, thousand litas

Planned investments, thousand litas

Planned Planned Planned

Thousand litas

The Director of the Port Authority emphasized that continuous investment is vital to the Port. It is intended to make investments over 1,149 billion litas in the Port’s infrastructure by 2018. More than half of that amount will be allocated for the deepening of the Port: 600 million for the deepening of the shipping channel and 150 million for extra depth at the embankments.

“During the year of 2013 we have proven to the Port users that we are their partners. We promptly dealt with a number of Port development problem. We need to understand that the Port will not achieve anything without investment. Only due the investment, the Port of Klaipėda has started this year as a hub port of bulk cargo and containers. Our next task is to take care of the companies based in the southern part of the Port, in the Malkų Bay, which have been undeservedly forgotten. We must develop the Port steadily. Our other target - to deal with the Port’s rail infrastructure issues and develop additional areas for the Port’s needs, including the creation of the added value,” said A. Vaitkus.

The agility of the Port Authority was demonstrated during the implementation of the LNG project as well, which is in the final straight presently.

“Such a rapid pace of works has not yet occurred throughout the entire history of the Port of Klaipėda. Last year, in such a short time we were able to do as much as it had not been done in the previous years. I would like to point out that the dredging works were started only on 8 February 2013, although they had to be launched on 15 November 2012. Under these difficult conditions, however, the Port Authority was able to complete these works a month earlier than it was promised to AB “Klaipėdos nafta”. We feel a responsibility to ensure that the project proceeds smoothly, that the required depth are ensured as well as the security” said the head of the Port Authority.


Footnote: The new EU Structural Funds programming 2014 - 2020 m. provides 450 million litas from EU funding for the Port’s activities. Adding the funds borrowed by the Port Authority, is its intended to invest 1.5 billion litas in the infrastructure.

According to A. Vaitkus, container load is an area where the Klaipėda Port’s name and prestige are of high value. This was helped to be achieved by the Klaipėda Container Terminal, which has been performing container loading in the Port for already twenty years. In 2013, the Authority completed the reconstruction of the embankment 143a used by this terminal and thus opened up new business opportunities. Currently, a huge leap in container load is also determined by the growing turnover of LKAB “Klaipėdos Smeltė”. The company’s customer is the shipping company “Mediterranean Shipping Company”. Here, the foundations of a container distribution centre (hub) are being laid; the company already has three STS type cranes, which are designed to load and unload containers to (from) container ships. The cranes are used to serve Panamax and Post-Panamax sized ships.


The rapid growth of container loading has helped the only Lithuanian Port to take the position of the region’s leaders. In the first eight months of this year, the Port of Klaipeda fixed a record load of containerized cargo. In January-August of 2014, 3,655 million tons of containers were loaded, or one-fifth more than during the same period of the previous year. This result is a record in the history of the Port of Klaipeda, if analysing the period of 2005-2014. The previous record was achieved in 2013 - 3 million tons. Assessing the containerized cargo (TEU) load, it also beats records – the load made 290 773 TEU. It improved the previous record achieved in 2011, when 269 082 TEU were loaded.

“These results could only be achieved by constant investing and efficient performance in the matters that earlier were delayed for some reason. If we wish to be competitive, we need to be fast and flexible. We are not allowed to stop, because today the owner of the goods first of all asks not the cost of the loading the goods, but what ship can we accept.” said A. Vaitkus.


Containerized cargo (TEU) load in the Port of Klaipėda. Data of 2014: the planned load



Containers

Tons of containerized cargo in the Port of Klaipeda. Data of 2014: the planned load for the year.



Containerized cargo

The growth in fertilizers load is also impressive. Compared to the first eight months of the previous year, fertilizer load has increased by more than 36 percent. In total, 8.1 million ton fertilizers were loaded in the Klaipėda Port this year, or 2.2 million tons more than in January-August of 2013.



Fertilizer load in the Port of Klaipėda. Data of 2014: the planned load


Fertilizers

It is expected that the capacity of the Port of Klaipėda to load larger quantities of fertilizers will be increase by a new bulk fertilizer terminal. This is one of the largest investment project in the history of the Klaipėda sea cargo company KLASCO, for the purpose of which 70 million litas were used.

Currently, KLASCO’s fertilizer loading capacity - up to 2.6 million tons of liquid and up to 4 million tons of bulk fertilizers per year – is the largest at the Port. The terminal stands out by its ecological, technological and commercial security. Closed load ensures the quality of each consignment transportation in the Port from the wagon to the ship. Modern technology speeds up the loading process and shortens the time of the vessel standing at the Port. The loading process of the new 100 thousand tons volume bulk fertilizer warehouse is fully automated. Now different fertilizers can be loaded simultaneously to two Post-Panamax ships at the embankments with a depth of 14.5 meters, or to one ship, but with two loading machines, thus reducing the loading time by double and achieving the capacity of up to 3000 tons per hour.


The Klaipėda Port’s fertilizer load volume was especially increased by UAB “Birių krovinių terminalas” (BKT, Bulk Cargo Terminal), which performs the loading of fertilizers to containers as well. The BKT model suggests how a variety of ways can be found through the loading of traditional cargo and fertilizers in order to improve the loading efficiency and create the additional value added. BKT is one of the most efficient terminals in the Port.

Possibilities for improving agricultural production have been opened after the company “BEGA” has launched a versatile agricultural products export-import terminal, which is currently one of the largest and most modern in the Baltic region. The terminal is equipped and arranged in such a way that at the same time, when two ships stand on the pier, one of them can be unloaded, and the other one can be loaded. This saves customers’ time; the export-import terminal’s project and technologies are adapted for loading in both directions at the same time. This gives the Port Authority almost double revenue.

“Such a modern, technologically equipped terminal, which exhibits reversing options, has never been seen in the Baltic ports. The good news is that the Port of Klaipėda is becoming from a feeder port not only to a container, but also to a bulk cargo hub. The implementation of the investment in this terminal opens wide opportunities to attract entirely new goods.” said A. Vaitkus about the prospects for the future.


The Port of Klaipėda has distinguished not only by a leap in fertilizers and container loading, but also by an increasing Ro-Ro cargo traffic. Over the past two years, Ro-Ro cargo load grew by 14 percent in the region, and the Port of Klaipėda remains the Ro-Ro cargo leader in the Baltic Sea with 5 million tons of cargo per year. The Port’s capacity to load this type of goods should further increase in the future, since in June of this year the Klaipėda Central Terminal was opened in the Port of Klaipėda - the most advanced passenger and cargo terminal in the Baltic countries. Simultaneously, this terminal can accommodate as many as three vessels of any type: Ro-Ro passenger ferries, Ro-Pax ferries and cruise ships. The terminal can accept up to around half a million of passengers, to reload 5 million tons Ro-Ro cargo. Currently, it is being negotiated what shipping lines will come to work in this modern terminal.

During the year of 2013, the perspectives of the Port of Klaipeda were elevated to a completely new level. The central and southern part shipping channel has been dredged to 14.5 meters and widened by one hundred and fifty meters.

“The key challenge for the future - the depth. We have no other choice, because “Baltmax” ships are our greatest target. The depth in the Belt straight is 17 m, the dominant maximum draught of such vessels is about 15 meters. We should be oriented into such ships so they can moor in Klaipėda. Otherwise, they will sail to other ports, where such a possibility exists or is being created. Thus, the dredging program is one of the essential tasks. It is not enough to dredge the channel; we need to reach a certain depth also at the embankments, where a large amount of goods is generated and where there is a great demand for ships. Future target is 17 m depth up to the southern part. In this case, we should not only deepen the shipping channel itself, but also improve of the Port’s gates.” A. Vaitkus shared the plans.

Another area in which an apparent growth is observed - cruise shipping. The year of 2014 can be considered record as the largest number of cruise ships visited the Port in its history. Even a giant cruise-ship “Celebrity Eclipse” arrived. This was the longest vessel throughout the history of the Port of Klaipeda. Its length is equal to the length of three football fields (317 m.), and the height of exceeds a twenty-story building (61 m.).

“The Klaipėda State Seaport Authority is a state company, it focuses not only on the commercial result or a direct return on investment. We are making a lot of investments that are necessary to society, the taxpayers, although this is not always useful to the Port Authority as a commercial institution. We can rejoice that we have completed another very important project, which is relevant to the residents and visitors to the city - officially completed the reconstruction of the Kairių street, called the business card of Klaipėda, that leads from the international ferry terminal to Klaipėda city. The Klaipėda State Sea Port Authority had started the reconstruction of two and a half kilometre section three years ago. The sum for the work carried out reaches almost thirty million litas. This street is just one of many that has been reconstructed by the funds of the Port Authority. We annually invest in the well-being of the city of Klaipėda an average of 9.2 million litas.” said the Head of the Port Authority.


According to the data of the Port’s Administration, the companies operating at the Klaipėda Port pay on average about 1.5 billion litas to the state budget per year. We dare to say that this is pure profit for the state. Another important figure – the jobs. The Klaipėda Port, including the induced jobs, provides 185,000 people with working places.

BOX: Klaipėda Port complements the budget

Logistics and ship building and repair services provided at the Klaipėda Port contribute significantly to the GDP growth in Lithuania (indirectly related to 18 per cent of the country’s GDP), the government sector’s revenue and job creation. The Port of Klaipėda employs about 23 thousand people, and the port-related companies employ about 185 thousand. The state budget replenishes by an average of nearly half a billion litas a year from the Port’s operations, and the annual revenues of the port-related companies reaches 1.5 billion litas. Large part of the investment funds is also cut off by the city of Klaipeda for its needs. The Klaipėda Port is continuously investing in the infrastructure, regularly allocating funds for the city needs: building of streets and highways, reconstruction of crossings, passages, social, cultural and sport projects. Over the last 14 years, the Port of Klaipėda has allocated 129.2 million litas to Klaipėda city.



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