Singapore: Such is the scale of fleet expansion ongoing at China Navigation that for the first time in its 131-year history it is looking at farming out some vessels to third party managers. The controlled fleet is set to hit around 80 ships following a dramatic series of orders over the past four years, which has also spawned a whole new bulker division.
In 2010 China Navigation embarked on a big fleet renewal programme with order for eight 31,000 dwt multipurpose (MMP) vessels at China’s Ouhua Shipbuilding. These ships are replace eight 25,000 dwt ships. It then ordered four 22,000 dwt vessels at the same yard for delivery next years. These ships will go on the company’s Australia – Pacific Islands trades. China Navigation also bought three ships from Rickmers last year.
Its liner trades, operating as Swire Shipping, now runs on 12 tradelanes. Bolstering its position on the Pacific, China Navigation bought out long time partner Polynesia Line last year, and followed this up this January with the acquisition of Pacifica Shipping, a New Zealand-based container feeder operator.
Further acquisitions are possible. Tim Blackburn, managing director of China Navigation since 2011, tells Maritime CEO. “There is scope for more acquisitions as we look to build our liner network in the Pacific,” he says. The company will target regional operators who have long term relationships with customers or markets, but have felt the pressure from the increasingly consolidated liner trades.
The other big focus under Blackburn has been developing a new bulker entity. Swire Bulk was formed in 2011. “It was the opportunity to diversify into bulk at the right time in the cycle,” Blackburn explains. The company quickly identified the handysize sector as the one to focus on. It has since ordered twenty-four 39,000 dwt ships in China in the past 24 months, plus four 38,000 dwt ships at Imabari.
Of China Navigation’s giant orderbook, 14 have delivered so far with another 18 to come. There may well be some ships that will be sold on as the company looks to make some asset plays.
Finally, there is Swire Bulk Logistics, another new creation under Blackburn’s watch. The division operates a variety of converted panamaxes and floating cranes in Southeast Asia and has a tie up with Peter Livanos’s CTM. [24/09/14]