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Chile Freight Transport Report Q3 2011
Business Monitor International, June 2011, Pages: 49
Business Monitor International's Chile Freight Transport Report provides industry professionals and strategists, corporate analysts, freight transportation associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Chile's freight transportation industry.
We believe that Chile's good macroeconomic outlook, and particularly its strong consumer story, will continue to drive investment in its freight transport sector. Our positive outlook for the Chilean economy remains in place, and we continue to expect strong real GDP growth of 5.4% in 2011 and 4.2% in 2012. Private consumption is an increasingly important element of this growth. In Q410 we estimate that private consumption contributed 4.4 percentage points (pp) to the headline growth rate of 5.8%. A number of leading indicators, including new car sales and supermarket sales, suggest that the consumer sector strengthened considerably in 2010, and we expect consumption to grow further in 2011 and 2012 as wealth rises across the country, contributing to robust GDP growth rates.
Headline Industry Data
- Air freight tonnage forecast to rise 11.5% in 2011, with average growth of 10.4% over the next five years.
- Total tonnes at the Port of Valparaíso forecast to rise 17% in 2011, with average growth of 14% over the next five years.
- Rail freight tonnes forecast to rise 10% in 2011, with average growth of 4.6% over the next five years.
Key Industry Trends
Air – Lan/Tam Merger Grounded As Anti-Trust Authority Investigates
BMI believes the merger of Chilean airline Lan with Brazilian carrier Tam is unlikely to be completed within six to eight months as planned. Chile's antitrust tribunal has opened an investigation into the merger, which could ultimately block the move to create one of the world's biggest airlines. If the merger is allowed to go ahead, the investigation will delay it by some months and could result in the alteration of some routes.
Maritime – Strong Consumer Outlook And New Concession Are Upside Risk To San Antonio The San Antonio Port Authority (EPSA) has awarded the concession to expand and operate the terminal of Costanera Espigon to Puerto Lirquen. The expansion plan is designed to help the port cater for a projected rise in throughput over the coming five years. BMI predicts that consumption growth in Chile over the next five years will be among the strongest in Latin America, and in combination with the country's market-friendly economic policies and good macroeconomic outlook we believe this will drive increases in port traffic, ensuring that San Antonio's new terminal should see strong throughput volumes.
Luksic Displays Vote Of Confidence In CSAV, But Box and Dry-Bulk Woes Continue BMI believes that Chilean mining company Grupo Luksic's purchase of 10% of CSAV's shares, with a total value of US$120mn, is good news for the beleaguered shipping line which is US$60mn in debt. We believe CSAV's dry-bulk service will look to take advantage of its new connection with the mining company, given that its container shipping service remains plagued by over-capacity. Luksic made the purchase through its holding company Quiñenco, acquiring 202,925,890 shares at a price of CLP285 (US$0.60) per share.
Risks To Outlook
The main upside risk to our forecast comes from growing demand from Chile's consumers. Going forward, we expect private consumption to increase by 5.4% y-o-y in 2011 and 5.0% y-o-y in 2012, as wages increase countrywide and unemployment continues on its downward trajectory (over 300,000 new jobs were added in 2010, according to preliminary figures).
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