Sinotrans eyes China port investments

Chinese shipping and logistics firm Sinotrans it plans to boost capital spending this year and is eyeing minority investments in mainland Chinese ports amid a turnaround in domestic and international trade, Dow Jones reported.

Sinotrans President Zhang Jianwei said the company will focus on expanding its intra-China trade business in 2010 to ride on the nation's booming economy, which grew 8.7 percent last year.

"Export trading volumes are still a major contributor to our businesses but this will likely change" as Sinotrans invests to develop its domestic operations, Zhang said. He said the company's domestic trading operations account for about 20 percent of its business, but didn't provide a growth target.

Zhang's comments come after revealing earlier in the week that the company’s 2009 net profit fell 25 percent to US$62.2 million from $83.3 million in the previous year, while revenue fell 21 percent to $4.05 billion from $5.14 billion, dragged by reduced international trade.

Though the global economic downturn depressed international trade and led to a slump in freight rates, trade within China remained strong on the back of the Chinese government's stimulus measures.

As the world's recovery has yet to gain traction this year, international trade will likely remain volatile, putting pressure on Chinese shippers like Sinotrans to shift more of their focus to domestic business.

Sinotrans, which operates freight-forwarding and express-delivery services in China, is a unit of state-owned China National Foreign Trade Transportation (Group). The company runs an express-delivery joint venture with Deutsche Post's logistics unit, DHL Worldwide Express.

Sinotrans Chairman Zhao Huxiang said Wednesday he expects the company to return to revenue growth this year due to improved market conditions.

"China's exports have been strong in the first two months of this year, and our performance is in line with the market," said Zhao.

(Source: Cargo News Asia)