American Port Services Inc., which handles the majority of cars shipped through the port of Baltimore, is being sold to London's Associated British Ports Holdings PLC for $172 million.
Tim Chadwick, chief financial officer of APS, expects business to pick up dramatically thanks to the added muscle of Associated British Ports, which is worth about $1.6 billion, and a new deal under which APS in Baltimore will handle nearly all of Chrysler's exports.
He said that APS in Baltimore has been operating at about 50 percent capacity and that business here has been on a downward slope in recent years. "We'll be able to box at a higher level and be more aggressive about getting new business," Chadwick said.
APS owns Hobelmann Port Services' Chesapeake and Atlantic terminals in the Fairfield area, and it leases space in the state-owned Dundalk Marine Terminal for its Crown Auto Processing company.
The three sites employ 226 people and handle about 140,000 vehicles each year. Aside from handling cars for import and export, APS also retrofits foreign and domestic automobiles. For example, when Chrysler exports a car to South Africa, APS crews alter the cars to meet South African regulations. Instead of doing it in-house, the automakers have the work done in the ports.
Next month APS is opening a new facility at its Atlantic terminal to handle the Chrysler cars. Chadwick said the merger between Chrysler and Germany's Daimler-Benz AG means the American automaker will have more opportunity to sell overseas, and he's hoping to see a positive impact in Baltimore.
APS acquired the Hobelmann terminals and Crown Auto Processing in March 1996 for $33 million. The companies aren't worth much more today, Chadwick said. But the companies' other port facilities and its nine small and medium-sized airports throughout the country, have had strong profits. The other APS port facilities are in Georgia, Florida and California.
Chadwick and Andrew Smith, managing director of Associated British Ports, said the sale of APS isn't expected to cause any layoffs.
"They have no operation in the U.S. so no ideas of consolidation would take place," Chadwick said of the British buyer. "There's nothing to merge with. In fact, they're very keen to expand."
Although APS is based in Baltimore, its stock is traded only on the London Stock Exchange. Chadwick said its British capitalization made more sense because Europeans seem to have a better understanding of privatized seaport facilities and airports. Lately, he's been displeased with Maryland's attitude toward private port facilities.
The Maryland Port Administration has plans to build an $18.6 million automobile terminal on its Masonville site on the south side of the Patapsco River across from Fort McHenry.
Chadwick said it doesn't make sense for the state to open an automobile terminal when the current terminals aren't at capacity.
He said the company plans to continue to invest in the Baltimore sites, but that the state's position makes doing business in Maryland more difficult. But, he said, the port authority's plans for a new terminal weren't a factor in the merger with Associated British Ports.
Smith said the acquisition of APS fits with Associated British Ports' long-term goals -- to extend its range of operations, to expand in overseas markets and to focus more on value-added services, such as automobile retrofitting.
He said he's also impressed with Baltimore.
"They've done a rather nice job of developing the harbor," he said. "It's a model for regeneration of an industrial port."
Pub Date: 5/20/98