China Shipping (Group), the nation's second-largest container line, is looking for acquisitions in areas including shipbuilding and port operations as the industry struggles with overcapacity and slowing economic growth, chairman Li Shaode said.
The company has formed a team that will seek opportunities to take over companies throughout the industrial chain for shipping, Li told reporters yesterday during meetings of the Chinese People's Political Consultative Conference in Beijing.
China Shipping (Group), the nation's second-largest container line, is looking for acquisitions in areas including shipbuilding and port operations as the industry struggles with overcapacity and slowing economic growth, chairman Li Shaode said.
The company has formed a team that will seek opportunities to take over companies throughout the industrial chain for shipping, Li told reporters yesterday during meetings of the Chinese People's Political Consultative Conference in Beijing.
"We will see if it's the best time for deals given the current situation for the shipping industry," Li said.
Shipping lines including the world's largest, AP Moeller- Maersk, have said they will increase rates to restore profitability after the industry lost money last year. Copenhagen-based Maersk, which lost 2.88 billion crowns (Dh1.87 billion) in 2011, last month cut 9 per cent of its capacity on Asia-Europe trade to help make rate increases stick and has said it may idle ships.
Li said he expects the container shipping market will have more opportunities this year than oil tankers and dry bulk. The company's container shipping unit plans to raise prices starting from April 1 following increases imposed by rivals, he said.
"We will focus on large oil tankers and container ships," Li said. "Dry bulk carriers won't see great opportunities in two to three years."
China Shipping has long-term contracts of 10-15 years for its dry bulk vessels and also long term contracts for oil tankers, Li said.
The company also doesn't rule out the possibility of expanding its shipbuilding business, Li said. Such a move would depend on the market, Li said, adding that the order book for his company's shipbuilding unit in Yangzhou is full until the end of next year.
Li also said that China Shipping had called on the Chinese government for supportive measures for the industry including policy changes that would allow shipping lines to pay taxes based on tonnage of shipping, instead of the current corporate income tax rate.
Vale, the world second-largest mining company, approached China Shipping about cooperation on the so-called Valemax very large ore carriers through its China agency and brokers, Li said. China Shipping turned down cooperating until Vale has Chinese approval for the ships, he said.
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