China Shipping plans to invest 14.9 billion yuan in building
very large containers to stimulate its container shipping business
in the coming years.
Huang Xiaowen, managing director of China Shipping Container
Lines Company Ltd (CSCL), said yesterday the heavy investment would
sharpen its competitive edge in the world market.
"Half of the funds will be collected from financial
institutions, but that's not a problem," Huang said.
He said the company's strategic development program is designed
to compete with rivals at home and abroad.
With the investment, CSCL is expected to operate a fleet of more
than 180 ships with a combined carrying capacity of 630,000 20-foot
equivalent unit (TEU) containers by 2011, Huang said.
"By then, the company is expected to occupy about 6 percent of
the world's container market," he said.
CSCL has prepared 4.3 billion yuan to build four 8500 TEU
container vessels and four 4200 TEU models to be delivered before
2009.
It has also signed a contract with Samsung Heavy Industries to
build eight 13300 TEU container vessels, which will be put into use
by 2011.
"Without large vessels, it's impossible for CSCL to sustain
development," Huang said.
Local shipping insiders said CSCL's investment demonstrates
foresight and the company has seized the opportunity to build more
container vessels before other shipping companies catch on.
Traditionally, shipping companies would order construction of
new ships when the container business is at a low ebb.
"But history won't repeat itself, and we can't copy what we have
done in the past. Otherwise, we will suffer losses," Huang
said.
"It is very difficult to predict when the low ebb is coming and
when a shipping company should order new ships."
CSCL now has assets worth more than 30 billion yuan, including
152 ships with a combined capacity of 450,000 TEU containers. Its
profits grew 13-fold year-on-year in the first half of this
year.
Huang expects profits earned between July and September of this
year would be much more than the same period last year.
(China Daily November 15, 2007)
