“We’re focusing on… those (targets) that are connected to our business,” SITC’s Yang Xianyang told Reuters in an interview, adding that none of the talks are in final stages.
Yang declined to name any of the targets or provide further details on the nature of their business.
SITC’s acquisition plans are not being primarily driven by Beijing’s ”Belt and Road” plan, Yang said, although the company expects the general transportation business to grow as the national initiative gathers pace.
China’s ”Belt and Road” campaign encourages Chinese companies to strengthen the country’s overseas trade and transport links, and has led to an increase in overseas acquisitions under its banner.
The global shipping industry has already seen a series of mergers and acquisitions that are helping to shake the market out of a prolonged slump.
In February last year, China Ocean Shipping (Group) Company merged with China Shipping Group to create China COSCO Shipping Corporation.
This year, COSCO Shipping Holdings Co Ltd offered in July to buy Orient Overseas International Ltd for HK$49 billion (US$6.3 billion), a deal that would turn the mainland group into the world’s third-largest container liner.
Having fewer shipping players is beneficial for the entire market, said Yang.
An improving market has also prompted some lines to think about adding new ships as freight rates rise.
SITC, which also handles ship brokering and freight forwarding, has ordered four 1,011 TEU gearless container vessels for delivery in 2018 and two more for 2019, and has options on more new builds, Yang said.
SITC’s profit for the first half of the year rose 20% to US$85.8 million from US$71.3 million a year ago. – Reuters