October 07, 2008

China Shipping plans big fleet expansion

It is reported that China Shipping plans to invest CNY 14.9 billion in building very large containers to stimulate its container shipping business in the coming years.

Mr Huang Xiaowen MD of China Shipping Container Lines Company Ltd said that the heavy investment would sharpen its competitive edge in the world market. He said that "Half of the funds will be collected from financial institutions, but that's not a problem. He added that the company's strategic development program is designed to compete with rivals at home and abroad.”

Mr Huang said 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 containers by 2011. He said "By then, the company is expected to occupy about 6% of the world's container market. Without large vessels, it's impossible for CSCL to sustain development. But history would not repeat itself, and we can not copy what we have done in the past. Otherwise, we will suffer losses. 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 CNY 30 billion including 152 ships with a combined capacity of 450,000 TEU containers. Its profits grew 13 fold YoY in the first half of this year.