Cosco International seeks acquisitions to boost profits
Services arm of China's largest shipping firm, armed with HK$5.5b in cash, aims to buy businesses that will boost its bottom line
Cash-rich Cosco International, the shipping services offshoot of China's largest shipping firm Cosco, is eyeing acquisitions both inside and outside its parent as it seeks to develop synergies with existing businesses.
Chairman Ye Weilong said: "Several potential acquisitions are now under intensive study" following a detailed assessment of its various businesses, which include marine fuel trading, marine paint manufacture and supply, marine equipment, ship trading and insurance.
"We'll focus on shipping services," Ye said, adding the firm had net cash reserves of HK$5.5 billion as of the end of June.
Xu Zhengjun, the firm's managing director, said: "The potential targets can give us higher profitability."
They avoided commenting on the progress of talks to acquire marine fuels company China Marine Bunker (PetroChina) from parent Cosco, which owns 50 per cent of Chimbusco. Cosco International has never formally named Chimbusco as the target, but it said in August 2010 that it was exploring the possible acquisition of a bunker oil supplier and other businesses from the parent. Chimbusco, a 50-50 joint venture between Cosco Group and PetroChina, is the only bunker oil supplier controlled by the parent.
On the Chimbusco deal, Ye said there was "no fixed timetable" for the acquisition of a bunker supplier either from Cosco or outside the company.