Friday, April 5, 2013

Cosco, the prototype - once again.

Readers of this blog may wonder why I keep repeating myself; why I tirelessly bring up the subject of the Cosco investment in Piraeus as the prototype of the foreign investment which Greece needs.

There is one reason why I do this: the topic is so utterly crucial for the future of the Greek economy. As this article from the Ekathimerini points out, the Cosco investment is one true success story and, by 2018, it is expected to contribute 2,5% to GDP.

By the way, another topic which I have focused on over and over again it the McKinsey report Greece Ten Years Ahead. For those who are not familiar with it: it recommended (2 years ago) how Greece could add about 50 BEUR to its GDP over the next 10 years by pursuing about 100 projects outlined in the report (and generate about 500.000 new jobs, too)!


  1. 2,5% of GDP. Wow!! I hadn't realized it was that much. And obviously it can dictate political terms, like getting tax refunds on time and not when the minister feels like it. Exactly what a certain type of Greek hates:capital concentrations large enough to make political arbitrariness impossible

  2. Klaus we need more COSCO type deals to reintegrate Greece into the constantly-evolving global production and supply chains. There seems to be a strategic place for Greece right now, as a hub for the return to Europe of products made by its multinationals (and others like HP) in Asia. Let's hope the TRAINOSE network improvements occur as planned so the project can move ahead.

    1. The line is being constructed by Ergose (Railway Construction Authority) - here is the project page

      The English text is a bit confusing, I've read it a few times and reached different 'conclusions'. I have a suspicion that its a Google Translate with minor corrections.

      According to that page, the link was was started in January 2000 and completed in December 2012..

      I have written to Ergose asking if the line has been handed over to Trainose and when the first freight trains are expected to run.

      It was paid for, in part at least, by grants from the EU Cohesion Fund.

      Its not unusual for the construction of new train lines through urban districts to take a long time.

      Some media reports of the COSCO-Trainose partnership gave the impression that the freight line was a new idea initiated because of the COSCO deal. I was sceptical that such a line could be built such a short time. Well its not a new idea, it's at least a 12 year old idea. At best the COSCO deal may have hurried it along a bit.

      I wish someone other than HP would commit to using Piraeus, globally HP unit sales continue to decline, whilst Lenovo, Samsung and others are rising. HP recently released its latest attempt at a tablet.


    2. Speaking of which, is there any news on the progress of the Patras to Athens high speed rail line? Surely Patras port would be an invaluable addition to the supply chain, servicing the Adriatic and Italy.

    3. In the medium term what you will see is the return of the manufacture of the multinationals products to the EU (and elsewhere). Some components will be shipped from East Asia, but some will be made in the EU... especially bulky/heavy ones like the packaging, casings, batteries and gorilla glass screens etc.

      That does not mean there will lots of low-paid assembly line jobs in the EU, the work will be done by unpaid robots. Its happening in the US, and I believe Philips have already done it for their electric shavers.

      So what will continue to make up the bulk of cargo shipped into Piraeus will be same as now, 'low tech' goods such as building materials, furniture, clothing etc.

      A question I have is: what are the vessels from East Asia carrying on the return voyages. Nobody ever says much about the products being exported through Piraeus, its all about what's being imported. I'd like to read about containers full of Sunlight batteries and Pharmathen medicines.

      In a recent update to Pharmathens website I read

      Recently Pharmathen’s reach increased tremendously to also cover the emerging generic markets in MENA, LATAM and APAC, with an emphasis on the growing Chinese market.

      Pharmathen is my favourite Greek company, it seems to have a lot of the attributes of the Mittlestand. I keep an eye on it to remind me that there are good things happening in Greece.

      If you don't know Pharmathen, here is their excellent website. They are the only private Greek company that I know of that ever had a direct loan from the EIB.