Singamas Container Holdings, the world's second-largest maker of shipping containers, will spend US$170 million to build two more manufacturing plants near the Yangtze River in a move to raise capacity by over 40 per cent, reported South China Morning Post.
The company's revenue had jumped four times last year to US$1.37 billion and it forecast demand to remain strong for at least the next two years.
The company's full-year net profit reached $92 million, thanks to extremely strong growth in the second half of last year. This compares with a net loss of $51 million in 2009.
While the company expected the mainland's export growth to slow from about 30 per cent this year to about 10 per cent next year, chief executive Teo Siong-seng said demand for containers should remain strong. "There were virtually no or very few containers produced between mid-2008 and late 2009. As the economy continues to rebound, the industry will spend this year and the next filling up the void, and the momentum will go into 2013 fuelled by rising demand to replace old containers."
Teo said although a container can be used for up to 15 years, most are replaced during their 10th. At the moment no one is giving up old boxes because of the shortage.
The two new factories in Qidong, Nantong city are expected to boost the company's annual capacity to produce common dry freight containers by 300,000 when they start operation in 2012. Combined with capacity to produce an extra 60,000 TEUs of specialised containers, total capacity will rise from a projected 850,000 TEUs this year to one million TEUs by 2012.
The company's capital expenditure is expected to reach $80 million to $90 million by the end of this year, but it will also raise funds through the debt market.
Teo said the company would eventually boost the revenue contribution of specialised containers from 19 per cent now to 40 to 50 per cent.
"Demand for specialised containers has fluctuated less than that of dry freight containers, and the gross profit margin is usually four to10 per cent higher," Teo said.
Specialised containers are larger and sometimes carry refrigerated products. While the average selling price of a TEU is now close to $3,000, the company, which has a 25 per cent global manufacturing market share, already had a full order book last month and was now "filling May capacity".
The company's revenue had jumped four times last year to US$1.37 billion and it forecast demand to remain strong for at least the next two years.
The company's full-year net profit reached $92 million, thanks to extremely strong growth in the second half of last year. This compares with a net loss of $51 million in 2009.
While the company expected the mainland's export growth to slow from about 30 per cent this year to about 10 per cent next year, chief executive Teo Siong-seng said demand for containers should remain strong. "There were virtually no or very few containers produced between mid-2008 and late 2009. As the economy continues to rebound, the industry will spend this year and the next filling up the void, and the momentum will go into 2013 fuelled by rising demand to replace old containers."
Teo said although a container can be used for up to 15 years, most are replaced during their 10th. At the moment no one is giving up old boxes because of the shortage.
The two new factories in Qidong, Nantong city are expected to boost the company's annual capacity to produce common dry freight containers by 300,000 when they start operation in 2012. Combined with capacity to produce an extra 60,000 TEUs of specialised containers, total capacity will rise from a projected 850,000 TEUs this year to one million TEUs by 2012.
The company's capital expenditure is expected to reach $80 million to $90 million by the end of this year, but it will also raise funds through the debt market.
Teo said the company would eventually boost the revenue contribution of specialised containers from 19 per cent now to 40 to 50 per cent.
"Demand for specialised containers has fluctuated less than that of dry freight containers, and the gross profit margin is usually four to10 per cent higher," Teo said.
Specialised containers are larger and sometimes carry refrigerated products. While the average selling price of a TEU is now close to $3,000, the company, which has a 25 per cent global manufacturing market share, already had a full order book last month and was now "filling May capacity".