Singamas plans to widen the use of its shipping containers into vessels for chemicals, solar power and even modular data centres

Singamas Container Holdings said it is pursuing a diversification, as its mainstay business of making dry-freight shipping containers suffered from shrinking commerce in the year-long trade war between the two largest economies on the planet.

Revenue fell 39.7 per cent to US$584 million in the first half, causing Singamas’ net loss to balloon 17-fold to US$50.7 million, as the price of shipping containers plunged due to a glut in the worldwide market.

Faced with declining sales and mounting losses, the unit of Singapore’s Pacific International Lines wants to move Singamas’ business to focus on specialised containers used in transporting chemicals, or even to be turned into solar power units or modular data centres, said chairman Teo Siong Seng, who is also executive chairman of the shipping line.

Profit margins are higher in specialised containers, Teo said. Such vessels made up 8 per cent of Singamas’ 2017 production volume, and 15 per cent of revenue, rising to 15 per cent of volume and 30 per cent of sales by the first half of this year, he said.

“Singamas would become a much smaller, more specialised company with no debt,” Teo said at a press conference today in Hong Kong, where the company’s shares are traded. “The switch in strategy was something that Singamas had considered before the trade war even started, he said, but the trade war had accelerated the plan.

The trade war between the United States and China is pushing the Chinese economy toward greater reliance on domestic consumption, away from exports, which opens up new opportunities, Teo said.