SINGAMAS Container Holdings is setting up a 50-year joint venture with Shanghai Jiading Goods Cupboard Machinery General Plant to manufacture refrigerated containers (reefers) in China. Singamas will pay US$4.5 million to take 90 per cent of the equity in Shanghai Singamas International Container Co, to be based in Shanghai Jiading, in Jiangsu province. Six of the seven directors of the new company will be appointed by Singamas. Hong Kong-listed Singamas is the largest manufacturer of dry freight containers in the world. Singamas president David Wong said the establishment of the joint venture marked a new era for the company. 'We are very confident of our success in the reefer market also,' he said. The long-term market growth for reefers is estimated to be between eight and 10 per cent a year, excluding replacement demand. About 500,000 TEUs (20-foot equivalent units) of reefers are in use around the world, up from 104,000 TEUs in 1985. 'In addition to the growth prospects, profit margins on reefers are higher than dry freight containers,' Mr Wong said. Construction of the new factory, on a 86,710-square-metre site, will begin in March and production will start in the fourth quarter of next year. Initial production capacity will be 4,800 TEUs a year, rising to 9,600 TEUs, worth HK$450 million. Technology has been acquired from Morteo Industries of Italy to build environment-friendly reefers.