appConfigEntityId

bodyType

customContents

entityId

entityUuid

articlePageQuery

filter

article

articleBaseAdvertisingInfoArticle

articleListArticle

articleSeoArticle

hooksArticleAcknowledgementGateOverlayArticle

hooksTrackPageViewArticle

hooksContentInterestArticle

articleLinkingDataContent

hooksAmpRedirectArticle

articleSchemaContent

hooksArticlePageAdvertisementConfigArticle

liveArticle

appConfig

advertZone

sentiment

contentLock

topics

types

sections

paywallTypes

createdDate

publishedDate

sponsorType

urlAlias

moreOnThisArticles

sectionsV2

commentCount

authorLocations

authors

corrections

displaySlideShow

multimediaEmbed

printHeadline

seriesContainer

articleSpeeches

socialHeadline

headline

images

flag

firstTopic

glossary

flattenTypeIds

image

relatedLinks

relatedNewsletters

__typename

sponsor

pdfFiles

seriesReverseOrder

series

disableOffPlatformContent

published

updatedDate

summary

subHeadline

body

keywords

readingTime

customTimezone

liveContents

json

SINGAMAS Container Holdings' $348 million injection into its container manufacturing and depot business over the past two years is set to bear fruit this year, managing director David Wong Chun-chung says.

  He said close to half a million teus (20-ft equivalent units) of new vessels were being launched this year and this should create demand for at least one million containers in the world.

  Singamas, which became the largest manufacturer of dry freight containers in China in 1992, is optimistic of capturing a good portion of this new demand.

  Mr Wong said the group's profits were expected to be boosted by its investment in a refrigerator container (reefer) joint-venture in Shanghai, due to start production next month.

  The joint-venture, with orders in hand for the first three months, will be operated by Shanghai Singamas International Container and will initially produce 100 units of reefers monthly.

  'Our orders in hand is from Pacific International Lines, one of our major shareholders,' Mr Wong said, adding that this reefer operation in which the group had invested US$20 million would form an important part of the group's core business.

  As there was a backlog of 10 months' production of reefers in the worldwide market, Mr Wong was confident that this investment would break even in the third quarter of this year.

  Singamas had a 51 per cent equity in the reefer joint venture with a capacity to produce 4,000 units per year, he said.

  Other partners in the venture included institutional investors such as Chinavest and Warden Investment Fund.

  Singamas will become the world's third largest producer of reefers after Jindo and Hyundai.

  Mr Wong said the group would start marketing reefers soon and would take orders for June and July.

  'All indications are optimistic,' he said.

  Mr Wong said he was taking a cautious view of the dry freight container market and would consider retrenching workers in China only if the business slowed down.

  This activity, which was the group's core business accounting for 83 per cent of its turnover in 1994, depended on the market, he said.

  'We are cautious that it may be slowing down but in fact it may not,' he said, adding that the current slowdown was due to seasonal factors.

  Singamas has three dry freight container production facilities - one in Shanghai, another in Yixing, Jiangsu province, and a third in Surabaya, Indonesia.

  Mr Wong denied a recent newspaper report that the group had over-invested in the depot business and was headed for hard times due to that sector's poor performance.

  'The depot business will be profitable this year as the situation has now reversed,' he said.

  He said the price of steel, the main raw material for containers production, was also down 10 to 12 per cent.

  Mr Wong said the group had invested and started six depots in China over the past two years and it was natural that these investments would not initially bear fruit.

  'Depot business takes time to build up to a critical mass. Suppose a depot has a capacity of 10,000 teus and break-even is at 5,000 teus,' he said.

  'We will be losing money until we reach the 5,000-teu mark and from then onwards we would be making profit.'   Mr Wong said he expected the depot business to remain very strong this year.

  'Between October and today, the utilisation rate of our depots in Hong Kong improved by 100 per cent,' he said. He said that the depots were storing more containers today than they did in October.



Singamas drives to be world's third largest reefer firm