COSCO Holdings to Build 46 Ships with $2.7b

Hong Kong-listed shipping company COSCO Holdings Co. Ltd. (SEHK: 1919 and SHSE: 780919) plans to build 46 ships with a total of $2.7b. The company is expected to have a fleet with 39 million deadweight tons in 2010. It is mainly engaged in bulk cargo transport under the wing of China Ocean Shipping (Group) Co. (COSCO), one of the five biggest shipping conglomerates in the country. Recently, COSCO Holdings announced that it would purchase the parent interests in its three subsidiaries COSCO Bulk Carrier Co., Ltd., Qingdao Ocean Shipping Co., Ltd., Shenzhen Ocean Shipping Co., Ltd. The purchase is still subject to the temporary shareholder meeting to be held by the Hong Kong-listed company on October 23. It is deemed to sharply raise the company’s capacity in bulk cargo transport, in which the three subsidiaries specialize. COSCO Holdings, after the purchase is over, will operate 412 bulk cargo vessels in total and actually control a shipping capacity of 32.02 million deadweight tons. In addition, the company has ranked first nationwide by container throughput. It owns 24 terminal projects with 115 berths, which is capable of handling 32.79 million TEUs a year. It is set to build about 20 berths annually in three years to drive up its annual shipping capacity to 800,000 TEUs by 2010. The parent is also busy enlarging its fleet when shipping companies have to pay more to lease ships now. In April, it inked ship ordering contracts and agreements with four Chinese shipyards, including China Shipbuilding Industry Corporation (CSIC), COSCO Shipbuilding Industry Company, COSCO Shipyard Group Co., Ltd. and COSCO International Shiptrading Co., Ltd. It ordered 66 ships with a combined capacity of 5.14 million tons, among which are container ships, bulk cargo carriers, tankers and ships specially for car transport. China’s rapid growth in the shipbuilding has been attracting more and more orders from foreign shipping companies as well as domestic buyers. It exported ships valued at $8.064b in 2006, surging 70.9 percent year on year, according to the China General Administration of Customs. In 2006, China outpaced Japan for the first time by the number of orders, becoming the world’s second biggest shipbuilder only after South Korea, showed data by the Lloyd's Register, a management system certification provider in Britain. In terms of new orders in January 2007, China even surpassed the world’s No. 1 shipbuilder South Korea. [Source: http://www.tradingmarkets.com]