COSCO Pacific Limited ("COSCO Pacific") is pleased to announce to establish a joint venture company (“Tripartite JV”) registered in Hong Kong with China Shipping Terminal Development (Hong Kong) Limited ("China Shipping Terminal") and China Merchants Holdings (International) Company Limited ("China Merchants International"). On 19 December 2012, the Tripartite JV signed a share sale and purchase agreement (“SPA”) with Yang Ming Marine Transport Corporation (" Yang Ming Marine") to acquire a 30% equity interest in Kao Ming Container Terminal Corp. (“Kao Ming Terminal”). The consideration was US$135 million which was set according to the assessment by independent professional assessment agencies. Each party of the Tripartite JV will hold a 10% effective stake in Kao Ming Terminal. After the completion of the acquisition, the shareholder structure of Kao Ming Terminal will be Yang Ming Marine 60%, the Tripartite JV 30% and Ports American Group 10%. The SPA is pending for approval from relevant governmental authorities of the PRC and the Investment Commission of the Ministry of Economic Affairs of Taiwan, China.

Kao Ming Terminal is the first phase of “Port of Kaohsiung’s Intercontinental Container Terminal” in Taiwan, China. Yang Ming Marine obtained 50-year concession right in 2007 to develop the terminal with four 100,000-ton berths, a total area of 748,000 square meters, a quay length of 1,500 meters and a depth of -16.5 meters. Total investment cost was about NT$18 billion (approximately equivalent to US$620 million). Developed in two phases, the phase one of the project was put into operation in January 2011 with two berths, a quay length of 960 meters and a total annual handling capacity of 1.4 million TEUs. The container throughput was about 1.08 million in the first year of operation. The construction of remaining two berths was started in 2012 and is expected to be put into operation in 2014. The total annual capacity of the terminal will increase to 2.8 million TEUs.

Kao Ming Terminal is located at Port of Kaohsiung which is the largest port in Taiwan, China as well as the gateway to Taiwan, China. In 2011, the container throughput of Port of Kaohsiung accounted for about 70% market share of Taiwan, China. The Port of Kaohsiung is also the busiest transshipment hub port in Taiwan, China with the best water depth condition and state-of-the-art equipment. Kao Ming Terminal is the only terminal which can accommodate 14,000-TEU or over vessels at Port of Kaohsiung. In addition, the terminal’s loading and unloading of container is highly efficient with its fully automated rail-mounted gantry crane operation. The shareholders of the Tripartite JV are confident on the prospects of the terminal with its strong competitive advantage and development potential.

COSCO Pacific, China Shipping Terminal, China Merchants International and their parent companies possess solid backgrounds and abundant resources in the industries of terminal, shipping and logistics. The cooperation is a strong combination. COSCO Pacific's parent company, China Ocean Shipping (Group) Company is China's largest and the world's second-largest shipping enterprise, its ocean routes covering 1,500 ports in more than 160 countries and regions, and retaining its position as the Fortune 500 in the world. China Shipping Terminal’s parent company, China Shipping (Group) Corporation, is a large integrated enterprise with primary focus on shipping business with multinational, cross-industry, cross-regional and cross-ownership operations. The scope of business includes maritime transport, port and logistics, industrial manufacturing, finance and investment, and so on. China Merchants Group Limited, parent company of China Merchants International, is a large century-old Chinese enterprise in Hong Kong with intensive experience in ports, roads, energy transport and logistics operations. The Company believes that the profound industry backgrounds of the tripartite parent companies will build a good foundation for future development of Kao Ming Terminal to be a regional hub port. Moreover, the partnership between the Tripartite JV and Yang Ming Marine will be as an opportunity and platform to further strengthen the strategic cooperation between each other, to explore more opportunities for cooperation to achieve mutual benefit and win-win situation, and to have positive contribution to the development of all parties.

The acquisition of equity interest in Kao Ming Terminal is the first port infrastructure project opened to enterprises with Chinese Mainland funded background in the Taiwan region of China. The investment in Kao Ming Terminal by COSCO Pacific, China Shipping Terminal and China Merchants International fully demonstrated their confidence in economic and trade cooperation between Hong Kong and Taiwan, China as well as the Cross-Strait relations. The cooperation also represented a successful case with far-reaching and important influence for future closer economic and trade cooperation among the enterprises in Hong Kong and Taiwan, China and to promote friendly development in the region.

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