Philippine-based global port operator International Container Terminal Services Incorporated (ICTSI), through holding company ICTSI (Hong Kong) Ltd., has signed a joint venture contract with Yantai Port Group Company Ltd. and SDIC Communication for the purchase of 60 percent of the shareholdings of Chinese port operator, Yantai Gangtong Container Terminal Company Ltd.(Gangtong Container Co.), which manages the Yantai Gangtong Terminal in Shandong Province, China.

The state-owned Yantai Port Group Company Ltd. and SDIC Communications Company will retain 20 percent shareholdings each in Gangtong Container Co.

The transaction is subject to regulatory approvals in the People’s Republic of China, including the approval for the conversion of the Gangtong Containner Co. into a Sino-foreign joint venture enterprise.

Located within the Port of Yantai, Gangtong Container Co. operates container berths 38/39 of the Yantai Gangtong Terminal, including a 280,000-square meter container yard and back up area.

Early yesterday, PSE suspended trading of ICTSI shares after the company failed to inform the bourse of the acquisition.

Trading was immediately resumed, however, after PSE secured the appropriate disclosures regarding the acquisition.

Ranking tenth among all the ports in China, Yantai Port is one of the country’s pivotal ports. In 2006, it handled 1.169 million TEUs (twenty-foot equivalent units), representing a 68.4 percent growth over the 2005 volume.

Yantai Port consists of three parts: Zhifu Bay Port Area, Western Port Area and Penglai Port Area. The port lies across the heavy industrial base in the Northeast of China, as well as South Korea and Japan. Moreover, the port has been experiencing rapid growth in containerized cargo, ro-ro cargo and passenger traffic.

Yantai is at the eastern tip of the Shandong Peninsula, bordering the Yellow Sea and Bohai Bay. With a population of 6.5 million, Yantai registered a 2006 GDP of about RMB 240 billion, a 19.2 percent increase over 2005. On the other hand, Shandong Province, with a population of 92.6 million, had an estimated 2006 GDP of 2,170 billion, representing a 14.5 percent increased over the previous year.

The direct economic hinterland of Yantai Port mainly consists of Yantai, Weihai, Weifang and the north of Zibo. The direct hinterland enjoys good natural conditions and is experiencing rapid economic growth. Containerized cargo from this area include marine products, fruits, vegetables, vermicelli, marble, wine, including various goods manufactured by South Korean and Japanese companies. The bulk cargo resources include cement, oil, metal and chemicals.