C.C. Tung wins top business award

PUBLISHED : Friday, 03 December, 2004, 12:00am
UPDATED : Friday, 03 December, 2004, 12:00am

The Tung family-owned Orient Overseas (International) is sailing its way to record earnings this year, according to its chairman Tung Chee-chen, who yesterday was named the DHL/SCMP Business Person of the Year.

Driven by a strong performance from its flagship Orient Overseas Container Line (OOCL), the parent company posted an almost threefold increase in interim net profit of US$268.4 million.

Mr Tung said the company was on track for another record performance this year.

'[This year] will be better than last, and last year was a record year,' he said on the sidelines of the presentation ceremony yesterday.

Mr Tung said he was humbled to have been chosen for the award by his peers in the business community and key academics.

'Our entire organisation realises it is a tremendous honour to receive such a prestigious award,' he said.

He said the keys to OOCL's success lay in its ability to attract the shipping industry's top executives and to stay on the cutting edge of technology.

'One of the factors that have allowed us to outperform our peers is our ability to provide a state-of-the-art [information-technology] system,' Mr Tung said. 'But if you offer an effective operating system without the right people behind it, you can't really excel.

'So people are the reason and IT is the principal tool.'

He said he remained bullish about the container shipping industry next year despite the expected record launch of new vessels on to the world's major trade lanes.

'If you look at the whole balance of supply and demand, as long as the economy - particularly in the US and to a lesser degree in China - does not deteriorate, the demand side looks pretty good,' Mr Tung said.

'So [next year] looks pretty decent.'

However, Mr Tung said the persistent decline of the US dollar against its peers could add to OOCL's cost base.

'[The downward trend of the US dollar] is a concern in that it raises operating costs for us,' he said. 'Our income is in US dollars, but our expenses are sometimes generated in other local currencies. When those currencies appreciate, our costs go up.'

He said OOCL would have to mitigate that by improving its operational efficiency. 'We will have to try to keep our costs down, mostly by looking at ways to improve our business processes.'