China COSCO Shipping Corp Ltd, now the world's largest bulk vessel and oil tanker operator by fleet size, is to deploy more resources to six new businesses, Chairman Xu Lirong said on Thursday.
They will focus on logistics, industrial equipment manufacturing, financial and shipping services, investment, and operations linked to the country's "Internet Plus" development programme, he said.
COSCO sets new course to create six businesses
Xu was speaking in Shanghai at the company's grand opening.
The newly formed company brings together China's two biggest State-owned shipping conglomerates－China Ocean Shipping (Group) Co and China Shipping (Group) Co－to further compete against well-established global rivals.
"New businesses such as multimodal transportation, warehouse network development, shipping insurance services, offshore engineering equipment manufacturing, hospital and hotel management are all included in the newly formed conglomerate's scope in the long term," Xu said.
Employing 118,000 staff and managing 46 container ports and 190 berths around the world, the new entity has an annual throughput capacity of 90 million twenty-foot equivalent units, or TEUs.
It also operates a number of shipyards and maritime engineering equipment manufacturing bases in Zhejiang, Jiangsu and Shandong provinces.
To enhance its earning abilities, the company will complete the reorganisation for its container business by the end of March, said company officials.
It also expects to restructure resources and staff at its bulk vessel and logistics companies from April.
Xu said the planned six new businesses are expected to transform the group's operational model-shipping into a more diversified operation that can take full advantage of the opportunities likely to come from the Belt and Road Initiative, the development of the Yangtze River Economic Belt, as well as encouraging domestic companies to expand overseas.
Zhang Xiwu, deputy head of the State-owned Assets Supervision and Administration Commission, said China COSCO Shipping will improve the country's ability to ensure its energy, economic and transportation security, as well as play a leading role in the ongoing reform of State-owned enterprises.
China COSCO Shipping Corporation Ltd announced on Thursday it will raise its operational capacity for twenty-foot equivalent units, a measure of the capacity of container ships and terminals, to more than 2 million TEUs by the end of 2018 to capture greater market share from three European rivals.
Wan Min, general manager of China COSCO Shipping, said Chinese shipping companies mainly transport containers on shipping lines between Asia and Africa and between China and Southeast Asia. But he said they are now focusing on major shipping lines between Asia and Europe and between Asia and North and South America.
The Chinese shipper currently has a capacity of 1.58 million TEUs, which ranks fourth among the world's largest container ship operators.
Denmark's Maersk Line, Switzerland's Mediterranean Shipping Co SA and French shipper CMA CGM SA, the world's top three container ship operators, currently hold around 40 per cent of the market share in the world.
"Chinese companies hold a relatively small share," said Wan.
He said new free trade arrangements including the Trans-Pacific Partnership, the Transatlantic Trade and Investment Partnership and the Regional Comprehensive Economic Partnership, will also offer new growth points for China COSCO Shipping's container cargo services in the Asia-Pacific region.
Vice-Minister of Transport He Jianzhong said China is supporting its shipping companies with better-equipped ships to compete with international rivals. It is also encouraging them to work on new products, such as liquefied natural gas and liquefied petroleum gas carriers.