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Grand China Logistics, together with other logistics units of Hainan Airlines, provides one-stop logistics services on the land, both at the sea and in the air. The company has not formally confirmed the news, but reveals that the service networks and employees of the ships will be absorbed into newly founded Grand China Shipping (Yantai) Co., Ltd., while their debts will still be undertaken by SYMS.
On September 22, Grand China Logistics issued a ship purchase announcement, but disclosed no purchasing price. The ships, to be renamed, will be put under Grand China Shipping (Yantai) for short sea services such as the sea routes between China and Japan.
Currently, Grand China Shipping (Yantai) operates three Sino-Japan sea routes, and ten to twelve new routes are to be opened by November. In the future, the company is believed to start to run ocean routes to Southeast Asia, even as far as Mediterranean Sea and Europe.
Grand China Logistics wants more say in the shipping industry, analyzed Wu Minghua, senior expert of COSCO, since the ship charter fee is very high.
At the end of May, Grand China Logistics inked a letter of intent with SYMS, planning to take over losses of CNY 500 million and 1,900 employees from the latter, and help the company gain net profit of CNY 100 million within a year. Its sincerity moved SYMS, which gives the order to Grand China Logistics, instead of another bidder COSCO.
However, SYMS later owed Danish and German ship owners huge ship charter fee. Moreover, it quitted from the operation of its Sino-Japan route in late August. The sea route contributes to the majority of its profit.
Jia Hongxiang discloses that SYMS' debts amount to as much as CNY 800 million. All these factors made Grand China Logistics change its strategy, namely, only acquire SYMS' quality assets.
Besides Yantai, Grand China Logistics also began consolidating shipping networks of SYMS in Qingdao and Shanghai.
The Qingdao Branch of SYMS has merged into the local branch of Tianjin Marine Shipping Co., Ltd. (TMSC and SHSE: 600751), which was bought by Grand China Logistics in early 2008. The new company will serve routes to Japan, South Korea, and Taiwan in the name of Grand China Logistics.
To enhance ocean shipping operation, Grand China Logistics has just announced it would procure a Dalian-based chemical shipping firm as well as its 11 chemicals carriers. It is also considering investing in semi-submersible ships and heavy-duty ships.
(USD 1 = CNY 6.83)
From www.nanfangdaily.com.cn, Page 1, Thursday, October 16, 2008 info@SinoCast.com
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