Hanjin Shipping Co., cautiously upbeat on its prospects, will lease bigger ships as the company turns to profitability this year, its president said.
Cho Sooho, the head of the South Korean firm, said that its sales could rise by five to six percent to $3.5 billion in 1999 from a year earlier.
Its net profit for the second half of 1999 is expected to be higher than the 11.4 billion won posted in the January-June period.
Hanjin Shipping, an affiliate of the Hanjin Group, is one of South Korea's two major carriers; the other is
Hyundai Merchant Marine Co. Ltd.
Hanjin and Hyundai handle about half of South Korean outbound traffic.
Cho said Hanjin was replacing some of its older ships to increase its capacity. Container transportation accounts for about 78 percent of Hanjin's revenues.
"But we are not planning to expand too much in view of the over-capacity in the industry," Cho said after talks with Malaysian Prime Minister Mahathir Mohamad.
Cho said the company would replace five vessels, each with a capacity of 4,000 teu, with leased vessels each with a capacity of 5,000 teu, allowing an overall capacity increase of 5,000 teu for the company.
Malaysia, moving to cut down dependence on neighboring Singapore's port, is aggressively encouraging main container lines to step up calls at its ports.
There was talk that Hanjin might relocate its regional headquarters to Malaysia's Port Klang from Singapore. But Cho said he would not comment on the speculation. - (Jalil Hamid, Reuters)