COSCO Shipping Development (CSD), the affiliated tonnage provider to COSCO Ship Holdings (CSH), will acquire four of the latter’s container-manufacturing subsidiaries, in order to expand its own container leasing business.
[s2If is_user_logged_in()]Formerly known as China Shipping Container Lines, CSD assumed its current name and scope after the COSCO and China Shipping groups merged in 2015.
In a filing to the Shanghai Stock Exchange on 13 January 2021, CSD said that it will fully acquire Dong Fang International Container (Qidong) Co., Dong Fang International Container (Qingdao) Co., Dong Fang International Container (Ningbo) Co., and their immediate holding unit, Shanghai Universal Logistics Equipment.
The purchase price was not stated but all the entities have a combined paid-up capital of almost US$372 million. CSD said that an asset appraiser will be engaged to value the CSH subsidiaries before determining the purchase price.
Dong Fang International Container (Qidong) Co., is the most valuable asset, having a paid-up capital of US$220 million. Located in Qidong City near Shanghai, it occupies 800,000m2 along the Yangtze River and can produce up to 280,000 20ft units annually.
CSD’s acquisition of the CSH subsidiaries coincides with an unprecedented spike in demand, due to the well-documented container shortage.
In the first nine months of 2020, the sharp increase in container demand saw CSD’s revenue increase 47% year-on-year to CNY4.91 billion (US$719.21 million), while net profit rose 111% year-on-year, to CNY819 million (US$120 million).
CSD said it has been capitalising on the slow return of empty containers from the US and Europe to Asia and has been increasing its sales efforts. The company added that sales of second-hand containers went up by more than 30% over the same period.[/s2If]
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Martina Li
Asia Correspondent
