Maritime industry is affected by overcapacity and global competitive businesses. China has approved another strategic restructuring of two state-owned shipping-related conglomerates, the second such move this month.
Sinotrans & CSC Holdings Co. will become a wholly owned subsidiary of China Merchants Group Ltd. The two holding companies had combined sales of more than 160 billion yuan ($25 billion) in 2013.
“The reorganization aims to achieve economies of scale and synergies, in particular in the areas of logistics, energy and bulk shipping, property development, ports and marine and off-shore engineering between the two groups, to speed up the development of an internationally competitive leading enterprise,” logistics provider Sinotrans Ltd. said in a filing to the Hong Kong Exchange.
China also has set a two-year deadline for loss-making enterprises owned by the central government to improve performance, with firms that make continued losses liable to be closed.
State-owned China Merchants Group, whose interests range from transportation to financial services, controls China Merchants Bank Co., China Merchants Holdings International Co. and China Merchants Property Development Co. Shares of China Merchant Bank, with a market capitalization of HK$527 billion, rose 0.9 percent Tuesday to HK$18.42.