COSCO plans USD 2.3 billion vessel buying

It is reported that China Cosco Holdings has revealed a massive new building plan for 25 vessels worth a total of USD 2.3 billion as it posted a 135% surge in its 2007 net profit.

The Shanghai and Hong Kong listed flagship of state owned China Ocean Shipping Company, which controls the largest bulk fleet in the world and boxline Cosco Container Lines, said that eight of the 25 vessels will be 13,350 TEU containerships to be built by Nantong Cosco KHI Ship Engineering Co 50:50 joint venture between its parent and Japan’s Kawasaki Heavy Industries.

The remaining 17 newbuilding vessels consist of nine 57,000 DWT bulk carriers to be built by Cosco Shipyard Group Co and eight 20,500 DWT bulkers by NACKS said the company. It did not disclose the unit price and delivery dates of the vessels.

Cosco Holdings has earmarked half of its planned capital spending budget for 2008 to support this massive new building plan and has expanded its capital expenditure by 36% from last year’s Yuan17bn to Yuan23.3bn in 2008.

Spending on the purchase of boxships will take up CNY 6.9 billion of the funds and CNY 4.9 billion will be used to pay for the firm’s bulk vessel orders. Cosco Holding, the parent of container port operator Cosco Pacific will invest CNY 4.4 billion in port development and Yuan3.4bn in the purchase of containers.

The group earned net profit of CNY 19.5 billion last year with its revenue rose 37% to CNY 108 billion.

Source: steelguru