China Shipping Group eyes port ventures.
China's shipping giant China Shipping Group is considering acquiring or developing a partnership with large port operators and miners in an effort to boost expansion of its upstream and downstream business.
China Shipping Group was hard hit by the financial crisis with a decline of 4.8% in total shipping transportation volume last year, but the group"s president Li Shaode told local media that business had bottomed out since last May.
Mr Li said the group"s financial status remained healthy in which it had a strong cash position for expansion.
He pointed out that now was not the most appropriate time to restructure, but the group was looking to carry out acquisitions or mergers to purchase upstream and downstream-related businesses.
Mr Li cited the formation of a Yantai terminal operator joint venture between Yantai Port Group, China Shipping Group, Baosteel Group and State Development & Investment Corp as an example, saying the group could press ahead with similar kind of partnerships in the future.
China Shipping Group and the other three partners invested a total of Yuan5.1bn ($750m) in the joint venture on January 16 in which Yantai Port Group owns a 67.6% stake in the consortium. Baosteel Group, China Shipping Group and SDIC hold 20%, 10% and 2.4% interests, respectively.
The formation of the joint venture enables China Shipping Group to buoy its container and dry bulk shipments in Yantai Port, a transportation hub in China"s northern Bohai Sea.
Mr Li also applauded the group joining forces with Guangxi Beibu Gulf International Port Group in January to develop a container terminal in China"s southern Guangxi province that provided a bridgehead for the group to increase its presence in southern China.
However, Mr Li said the group"s three listed arms including China Shipping Development, China Shipping Container Line and China Shipping Haisheng were unlikely to carry out any restructuring or fundraising this year because market conditions remained volatile this year.
Sinolink Securities shipping analyst Richard Li told Lloyd"s List that China Shipping Group would put restructuring of its listed vehicles on hold because the group had insufficient port assets to inject in the subsidiaries.