Port corporation moves to becoming self-sufficient with end of divestiture funding
CORNER BROOK — Diversifying its revenue stream will be a priority for the Corner Brook Port Corporation as it moves through 2020 and beyond.
The corporation held is 2019 annual general meeting through a Zoom video conference on Wednesday.
Financially 2019 was a good one, with the port finishing the year with a net income of $925,935.
But it also marked what will be a change in the way the port generates that income. In November the 15year divestiture period ended, meaning the port will no long be able to draw on divestiture funds to cover operational and maintenance costs. Over the past 15 years the port received $15,036,000 from Transport Canada.
“It means that we have to be completely self-sufficient,” said Jackie Chow, the corporation’s chief executive officer.
Chow said the corporation regularly has adequate operating revenue to cover operating expenses.
“But we need to ensure we have adequate funds to be able to cover the major projects and capital investments, and those other types of things, that we had that extra money coming from Transport Canada from the divestiture fund before that was helping in that.”
Chow said the port still has $7 million in investments that it can rely on to invest in new projects.
“But we don’t want to deplete those resources and not have anything to fall back on if we run into an issue.”
That’s why diversifying its revenue stream will be important.
One area that will be a tremendous help to the port becoming self-sufficient in the post divestiture period is the new international shipping project taking place there.
The $11-million project announced in 2019 got underway in May with the arrival of a Mediterranean Shipping Company (MSC) container ship and some 350 empty shipping containers. A second ship with about 775 containers arrived earlier this week and about 250 containers from the first shipment are expected to leave the port today filled with paper from Corner Brook Pulp and Paper Ltd.
The port and the paper mill are partnering the Logistec Stevedoring Inc. on the project that received a $5.5-million contribution from Transport Canada’s National Trade Corridors Fund.
Marie-chantal Savoy is the vice-president of strategy and communication for Logistec. The company has more than 67 years’ experience in the maritime industry.
“We’ve always been working very, very closely with communities where we can serve our customers and create a new supply chain and a new gateway.”
Savoy said the company was excited to see not just the port corporation but also the mill, government and MSC were willing to come together to collaborate and invest together for a longterm solution.
“In Canada there’s not enough of those partnerships and so we felt that this was a great combination.”
Savoy said expansion of the shipping project is difficult to see during COVID-19 and it would be up to the port to negotiate with another company, but it is willing to work with any of the major players.
“But we are very optimistic.
We are committed to the port and this gateway so if we can make it grow together, we will be there.”
To support the shipping activity the port plans to construct a warehouse facility in close proximity to the wharf and is looking at adding a cold storage that would be needed for the shipping of fish.
As for the real-estate aspect of the business, the port is in negotiations with a possible tenant for its property at 85 Riverside Dr.
Chow said the property, purchased in 2015, was seen as an important asset that could be useful in attracting business to the port.
On the cruise ship front, 2019 was the most successful cruise season to date with 18 calls to the port, and 2020 was shaping up to be even better with 20 bookings.
However, the situation with COVID-19 has meant this season has been completely cancelled for the port.
The impact on the port’s bottom line will be a loss of about $200,000 in net revenue as the port had projected for $300,000 in revenue with about $100,000 in costs.
But Chow said the port does have other income that will make up for that, including revenue from the Labrador ferry, which ran out of port for six weeks from Feb. 20-April 5, and from storage services in the container yard.
Chow said the port now has to take into consideration the container service, which has priority for the berth, as it books cruise ships for 2021 and beyond, but is optimistic that both can be handled.