Boston, MA -- (SBWIRE) -- 01/10/2013 -- Double Digit Growth In Port Activity

Although this quarter we have reduced our 2012 GDP growth forecast for Kenya, we have at the same time boosted our projections for activity at the country's main port of Mombasa. This is the result of a number of factors working in different directions. The reduction in the GDP forecast (to 4.5%, down from 4.9% previously) is based on new data releases showing that the effects of previous growth-reducing influences - such as tight credit - are lingering for longer than expected. We are still positive about the fundamentals of the Kenyan economy however, and foresee the recovery gaining pace in 2013. On the other hand, we believe recent dredging and other work to expand capacity has in effect released previously repressed freight demand at Mombasa, a port that has traditionally suffered from crushing congestion problems. Data releases for the first half of this year show that there has been stronger than expected growth in gross tonnage and containers handled. This is what has driven us to raise our forecasts for 2012 port activity growth to double-digit percentage levels.

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We remain broadly upbeat about Kenya's ports and shipping sector, based on three main factors:

reasonable economic growth in Kenya itself; a dynamic East African region (important because Mombasa acts as a trade gateway for many of Kenya's neighbouring countries); and finally, the signs that the port's ongoing congestion problems are easing.

Headline Industry Data

Port of Mombasa tonnage throughput forecast to grow 12.1% in 2012 to reach 21.966mn tonnes. Growth to average 6.6% in the period running to 2016. Container throughput forecast to grow 18.7% to reach 914,298 twenty-foot equivalent units (TEUs) in 2012. Box growth to average 10.0% to 2016. 2012 total trade set for year-on-year (y-o-y) real growth of 3.75% and to average 6.3% to 2016.

Key Industry Trends

New Mombasa Berth To Boost Throughput

Work on a new, US$58.4mn berth at the Port of Mombasa has been completed, positioning the facility to maintain the current strong growth in container handling. The total number of boxes handled at Mombasa rose by 24% in the first half of 2012. The new berth will be able to handle three medium-sized container vessels of 235 meters each, according to the Kenya Ports Authority's Managing Director Gichiri Ndua. The berth's construction work, which started in early 2012, is being carried out by a Chinese company, China Road and Bridge Corporation, and is co-financed by the Kenyan government.

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