China Shipping (Group) Ltd, the country's number-two sea transport operator, will buy 39 ships this year for 8 billion yuan ($966 million) as a booming economy and coal railway bottlenecks spur demand, a top executive said. The state-run company is the parent of China Shipping Container Lines Co Ltd and oil and coal carrier China Shipping Development. "(Premier) Wen Jiabao expects GDP (gross domestic product) growth of 8 percent this year. I expect growth will be higher," Li Kelin, president of China Shipping (Group), told Reuters in an interview on Saturday.
Global shipping rates have reached record highs during the past year as China's voracious manufacturing machine sucks in raw materials and cranks out finished products.
Li said total container throughput in China may rise by 20 percent this year.
He said the group's shipping prices should rise by about 3 to 4 percent this year, driven by rising rates for moving oil.
He also said he expects that a lack of sufficient rail transport for coal, which fires the majority of China's power plants, will mean more business for shipping firms.
"Existing transport capacity in China is inadequate to meet demand for coal," said Li, who was speaking at a hotel during the annual meeting of China's National People's Congress, or parliament. "This situation will last two to three years."
China Shipping's fleet numbers 417 ships, including 90 oil tankers and 120 container vessels. Of the ships to be added this year, six will be oil tankers. The new ships will add capacity totalling 2.2 million tonnes. The group will finance the acquisitions with bank loans and existing funds.
China Shipping Container Lines (CSCL) went public in an IPO last year that rased US$985 million, and Li said the firm is on track to see its volume surge by 30-35 percent this year to 350,000 TEUs (twenty-foot equivalent units) - ahead of the 332,000 target cited in the company's listing prospectus.
CSCL shares ended at HK$3.45 on Friday, nearly 9 percent above their IPO price.
Its sister firm, China Shipping Development, on Wednesday reported a 2004 net profit rise of 80 percent and a sharply higher capital spending budget this year of 4 billion to 5 billion yuan, compared with 1.8 billion yuan last year, to fund its fleet expansion.
Investors were annoyed, however, that the company cut its dividend payout ratio to about 27 percent from 49 percent, and sent China Shares skidding by 6.49 percent after its results.
Comments
Comments are closed.