Hong Kong port operator invests to strengthen major terminal in Mexico

Hutchison Ports, a subsidiary of Hong Kong conglomerate CK Hutchison Holdings, is investing heavily in a major port on Mexico’s west coast — a symbol of China’s rising influence in Latin America.

Huge cranes, trucks, and forklifts can be seen moving around Hutchison Ports’ container terminal at the Port of Lázaro Cárdenas.

Operated by a local unit of Hutchison Ports, the terminal covers 122 hectares. Its container throughput reached around 1.5 million TEUs in 2024, equivalent to 30% of the volume handled at the Port of Tokyo, Japan’s largest.

The company aims to boost traffic by investing around 3.47 billion pesos (US$188 million) to expand the terminal and add new facilities. Cranes and other equipment have been undergoing electrification since 2024.

Hutchison Ports accounts for around 40% of all planned private investments in the Port of Lázaro Cárdenas, which hosts a variety of other companies.

The port’s capacity has increased more than one thousandfold over the 20 years through 2023, according to the Center for Strategic and International Studies (CSIS). Hutchison Ports, which acquired management rights in 2003, has played a significant role in this expansion.

The company participates in the operation of 53 ports across 24 countries. Its container throughput in 2024 approached 90 million TEUs — four times the volume of all Japanese ports combined.

The company also manages the two ports located at each end of the Panama Canal. Former U.S. president Donald Trump even accused China of controlling the canal, turning it into a new point of friction between the countries.

Alfredo Huesca, CEO of Hutchison Ports LCT, told Nikkei Asia that the company has not received any instruction from the Chinese government in the past 20 years.

CK Hutchison accepted a proposal to transfer the operating rights to 43 ports worldwide — including those at the Panama Canal — to an investor consortium that included BlackRock, but the deal was later suspended by the Chinese government. The Panamanian government also intervened, leaving the US$ 22.8 billion offer on hold.

Hutchison Ports operates seven container terminals in Latin America and the Caribbean, according to CSIS. Mexico, with four terminals, is its largest base in the region.

Huesca said the company only has access to publicly available information regarding the BlackRock-led acquisition attempt. He added that recent developments have had no impact on daily port operations.

In December 2024, 25 tonnes of precursor materials used to manufacture synthetic drugs such as fentanyl were seized at Mexico’s largest port, Manzanillo. Most of the cargo is believed to have been imported from China.

Manzanillo is home to the headquarters of the Mexican Navy and has been the center of a power struggle between the Jalisco New Generation Cartel (CJNG) — one of the country’s largest criminal organizations — and other groups.

The Manzanillo terminal is also a key gateway for cargo destined for the United States. A CSIS assessment estimated that a disruption at this terminal could cost the U.S. economy more than US$ 130 million per day.

A CSIS report identified 37 ports in Latin America linked to Chinese companies. Although it states there is no evidence of criminal activity, the document warns that these ports could serve as ideal bases for Chinese criminal organizations operating jointly with local groups.

The report also raised the possibility that exports to China in sectors where transactions are prohibited — such as seafood, timber, iron ore and copper — could be enabled through bribes paid to customs officials or dockworkers.

In June, a cargo ship operated by Chinese electric vehicle giant BYD made its first call at an automobile-dedicated terminal at the Port of Lázaro Cárdenas. A source at the terminal said BYD vessels had already called four times through October. Expansion works to increase automobile terminal capacity by 20% are underway.

In a 2023 report, the International Coalition Against Illicit Economies stated: “The CJNG is obtaining the precursor chemicals for fentanyl production primarily through the ports of Lázaro Cárdenas and Manzanillo.” The report indicated that both ports were under cartel control in 2020.

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Source: Valor Econômico

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