- CSBC Corp is planning to acquire a build-and-lease business, focusing on containerships.
- Chairman Cheng Wen-lon revealed the new strategy last week.
Taiwanese shipbuilder CSBC Corp is planning to acquire a build-and-lease business, focusing on containerships, to improve its earnings, reports The Load Star.
Company Chairman’s Strategic Plans
Chairman Cheng Wen-lon revealed the new strategy last week as the firm announced a $1.94m net profit for 1H 21, after being in the red from 2017 to 2020 due to stiff competition for newbuild orders.
CSBC’s poor performance saw Mr Cheng (pictured) take a major salary cut last year, opting for the company’s minimum monthly wage of $810 until profitability was restored.
Now, he says, with historically high demand for containerships, ship leasing will offer another revenue stream.
Containerships Demand
BIMCO data shows there are 619 containerships on order, including 381, for 3.44m teu, ordered this year. As of today, the orderbook stands at 5.3m teu, nearing the record 6.8m teu of 31 July 2008, just before the global financial crisis.
The red-hot container shipping market is encouraging liner operators and tonnage providers to expand their fleets, especially as shipbuilders are raising prices.
CSBC’s Business Transition
Mr Cheng said naval ships and other government vessels accounted for 60% of CSBC’s business, the rest merchant ships and the offshore and marine sector. He credited the completion of several windfarm installation vessels for CSBC’s return to profitability – the Taiwanese government is encouraging the development of wind energy.
He said: “With the recent enthusiasm for new merchant ships, CSBC has not only resumed bidding for containership orders, but we’re also planning to enter the build-and-lease business.”
Leasing Business Launch
Launching a leasing business would see CSBC follow in the footsteps of Chinese rivals China State Shipbuilding Corp and Yangzijiang Shipbuilding.
CSBC has built more than 130 containerships for clients including Taiwan’s three largest liner operators, Evergreen, Yang Ming and Wan Hai, as well as Hapag-Lloyd and SITC. The largest boxships built by CSBC are 14,000 teu.
BIMCO Chief Analyst’s Thoughts
BIMCO’s chief shipping analyst, Peter Sand, told The Loadstar that, given the capital-intensive nature of ship owning, ship leasing was viable for financially strong shipbuilders.
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Source : The Load Star
