Singamas slashes freight box output on credit crisis
Singamas Container Holdings Ltd., the second-biggest maker of boxes for shipping goods, is operating at 60 percent of its seasonal output level after customers failed to get financing because of the global credit crunch. Orders at the Hong Kong-based company began to drop off from July and August, when demand typically increases ahead of the year-end holidays in the U.S. and Europe, Singamas Chief Financial Officer Sylvia Tam said yesterday in a phone interview. The worst financial crisis since the Great Depression has crimped capital and consumer spending, with U.S. retailers posting their worst monthly sales decline in almost four decades last month. Slacker demand for Singamas’s products indicates retailers are expecting reduced holiday sales.
“We didn’t see the Thanksgiving rush, we didn’t see the Christmas rush,” Tam said. “Some customers who were in discussions with us for orders had to hold back because they couldn’t borrow.”
U.S. retailers J.C. Penney Co., Nordstrom Inc. and Gap Inc. all reported November sales drops of more than 10 percent at stores open at least a year. China’s November exports may have fallen from a year earlier, the first monthly decline since June 2001, the 21st Century Business Herald reported.
Falling Prices
Demand dips the most for the dry containers, which are used for shipping goods such as textiles, when trade is weaker, Singamas’s Tam said. The company last took an order for 20-foot containers at $2,080 each, compared with a peak of more than $2,400 in September and October, she said.
Global trade may grow 4.1 percent in 2009, the slowest pace in seven years, the International Monetary Fund said Oct. 8.
“The earliest that the export market and our business will pick up is by the middle or end of the second quarter,” Tam said. “Until banks are back to their normal operational mode, business can’t return to its normal trend because companies don’t have facilities on hand to finance daily operations.”
No Closures
The company hasn’t had any order cancellations and hasn’t closed factories or put employees on paid leave, Tam said. Singamas plans to shut production for one month, as it does every year, for the Lunar New Year festival in January, she said.
Singamas, which has a global market share of 23 percent, rose 18 percent in Hong Kong trading, the most in more than five weeks, to close at 65 Hong Kong cents. The stock is down 81 percent this year. China International Marine Containers Ltd., with a 50 percent share, rose 4.6 percent in Shenzhen trading to close at 7.68 yuan.
China International Marine today said in a statement that the “low season” for orders, which usually runs from the fourth quarter to the first quarter, came earlier this year. Dow Jones Newswires earlier reported the company stopped output of dry-cargo containers and put 38 percent of staff on paid leave.
“We didn’t see the Thanksgiving rush, we didn’t see the Christmas rush,” Tam said. “Some customers who were in discussions with us for orders had to hold back because they couldn’t borrow.”
U.S. retailers J.C. Penney Co., Nordstrom Inc. and Gap Inc. all reported November sales drops of more than 10 percent at stores open at least a year. China’s November exports may have fallen from a year earlier, the first monthly decline since June 2001, the 21st Century Business Herald reported.
Falling Prices
Demand dips the most for the dry containers, which are used for shipping goods such as textiles, when trade is weaker, Singamas’s Tam said. The company last took an order for 20-foot containers at $2,080 each, compared with a peak of more than $2,400 in September and October, she said.
Global trade may grow 4.1 percent in 2009, the slowest pace in seven years, the International Monetary Fund said Oct. 8.
“The earliest that the export market and our business will pick up is by the middle or end of the second quarter,” Tam said. “Until banks are back to their normal operational mode, business can’t return to its normal trend because companies don’t have facilities on hand to finance daily operations.”
No Closures
The company hasn’t had any order cancellations and hasn’t closed factories or put employees on paid leave, Tam said. Singamas plans to shut production for one month, as it does every year, for the Lunar New Year festival in January, she said.
Singamas, which has a global market share of 23 percent, rose 18 percent in Hong Kong trading, the most in more than five weeks, to close at 65 Hong Kong cents. The stock is down 81 percent this year. China International Marine Containers Ltd., with a 50 percent share, rose 4.6 percent in Shenzhen trading to close at 7.68 yuan.
China International Marine today said in a statement that the “low season” for orders, which usually runs from the fourth quarter to the first quarter, came earlier this year. Dow Jones Newswires earlier reported the company stopped output of dry-cargo containers and put 38 percent of staff on paid leave.