Cosco International considering ship leasing
February 28, 2013 Category Logistics, Ports & sea transport
Cosco International, the marine fuels, paints and ship trading offshoot of China’s largest shipping company, is mulling entering the ship leasing market as part of a range of options to expand its operations. One person said the proposal was “still at the study stage” and could involve leasing newly ordered ships or those that have been completed but not delivered, possibly because the owners cannot get financing. Several banks, including ICBC and Standard Chartered, have launched ship leasing businesses where they retain ownership of vessels and charter them to operators at a daily rate, while the operator is responsible for repairs and crew costs. Standard Chartered has more than 20 ships on these bareboat charter contracts, including vessels operated by Wah Kwong Maritime Transport and commodities group Noble. Asked if Cosco International planned to deal exclusively with shipyards owned by its parent, China Ocean Shipping (Group), in offering ships on bareboat charters to Chinese and foreign operators, the person said: “In the long term, there is a definite focus on developing non-Cosco customers.” He said Beijing had policies to help with vessel financing, including tax breaks. Cosco International may also consider expanding its ship trading operation from the sale and purchase of Cosco vessels to cover ship chartering, where vessels are leased to commodity firms and traders. Sources said other plans included opening two new paint factories in China and acquisitions to strengthen its existing five businesses, which cover paints, marine equipment, ship trading, marine fuel and insurance. They believed the fastest-growing operation would be marine coatings because of two upcoming factories. Jotun Cosco (Qingdao) is due to complete a marine paint factory by the end of next month to produce up to 67,500 tons of coatings a year. Cosco Kansai (Shanghai) is also planning to start construction in October of a facility producing paint for shipping containers to replace an outdated plant, the South China Morning Post reports.
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