Recently released market study: Peru Freight Transport Report Q1 2011

Jan. 26, 2011 - PRLog -- Peru's economy continues to stand out as one of the strongest performers across the emerging market sphere and while there are some significant risks to its growth trajectory over the next 12 months, we believe the outlook remains one of still-sound fundamentals and massive investment potential. Yet, while growth is unlikely to maintain the rampant pace set in the first half of 2010, our core view remains that Peru will continue along its longer-term path of developed state convergence, providing significant opportunities for investors along the way. This is good news for the country's port sector, as further foreign investment in infrastructure, such as that we have seen in Callao, will be necessary to deal with increasing traffic.

Our country risk team maintains the view that the economy will be a regional outperformer in 2010, supported in large part by robust domestic demand, which will see increasing container throughput at the country's main ports as demand for imports grows.

Headline Industry Data

* 2011 rail freight tonnes-km forecast +4.65% following projected growth of 5.52% in 2010. 2011 air freight tonnes forecast +8.52% following projected growth of 12.87% in 2010. 2011 air freight tonnes-km forecast +16.12% following projected growth of 27.49% in 2010
* 2011 port of Callao tonnage throughput forecast +6.51% following projected growth of 5.09% in 2010.
* 2011 port of Paita tonnage throughput forecast +0.15% following projected growth of 16.51% in 2010.

Rail

The Completion of the Inter-Oceanic Highway will see more Brazilian freight travelling to Asia through Peru. The long-awaited Inter-Oceanic Highway spanning South America is due to be completed in early 2011, after several fitful years of construction and strong opposition from environmental groups. The controversial thoroughfare, linking up road networks from the continent's Atlantic and Pacific Ocean coasts, will cross through the Peruvian town of Puerto Maldonado, deep in the Peruvian Amazon.

Air

Peru's Ministry of Foreign Trade and Tourism (Mincetur) will encourage airlines from Japan, China and South Korea to fly direct routes to Lima in 2011. Peru plans to implement a new discount system on airport and air navigation fees, which provides economic benefits for companies eager to add routes to Peru.

Maritime

Netherlands-based APM Terminals has submitted a US$1.9bn proposal to develop the Muelle Norte terminal at the port of Callao. APM is not the only company to have a shown an interest in operating and investing in Muelle Norte. The company will compete with bids from Philippine firm International Container Terminal Services Inc (ICTSI) and Dubai-based DP World, which currently operates the Muelle Sur Terminal. DP World opened Muelle Sur, its newest marine terminal, a year ahead of schedule after 27 months of construction. The terminal is one of the largest port projects in recent history.

Peru's national port authority is hoping to attract $1.5bn in investments by the end of 2011, including a US$200m development in Ancon, north of Lima, by Santa Sofia Puertos, a US$180m port development in San Juan de Marcona on the southern coast, US$56m and US$29m investments in Amazonian river ports of Yurimaguas and Pucallpa, and developments of the San Martin port in Pisco.

Risks To Outlook

Potential downside risks to our outlook include a possibility of reduced Chinese demand in 2011. Our Asia Country Risk team predicts that China's real GDP growth will drop from 9.7% in 2010 to 7.5% in 2011. This will have a knock-on effect on its demand for raw materials. As China is second only to the US in the list Peru's main export partners, any slowdown in Chinese spending will have a negative effect on the country's infrastructure sector.

A second downside risk is the possibility that Peru will not be able to improve its infrastructure in order to keep up with global demand for commodities. Congestion has become a problem at the main port of Callao and we believe that if the country does not improve transport efficiency and capacity there is a possibility that importers will look elsewhere for their supplies.

The main upside risk to our forecasts comes from increasing consumer demand from Peru's growing population of 15-34 year olds. With average annual real GDP growth of 5.3% predicted during our forecast period, demand for containerised consumer goods could rise, resulting in more imports and more freight traffic.

For more information or to purchase this report, go to:
-  http://www.fastmr.com/prod/110350_peru_freight_transport_...

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Fast Market Research is an online aggregator and distributor of market research and business information. We represent the world's top research publishers and analysts and provide quick and easy access to the best competitive intelligence available.