Maritime NewsNews

Singamas to sell over half its container manufacturing capacity for up to $595.5m

Singamas Container Holdings has entered into a framework agreement to dispose of five of its wholly-owned subsidiaries for up to RMB4bn ($595.9m) in cash, a significant sale that is set to slice the group’s annual twenty-foot equivalent container production capacity by at least half.

Hong Kong-listed Singamas said the potential purchaser is looking to acquire Qidong Singamas Energy Equipment, Qingdao Pacific Container, Ningbo Pacific Container, Singamas Container Holdings (Shanghai) Limited, and Qidong Pacific Port for RMB3.5bn to RMB4bn, payable in cash.

Qidong Pacific Port is one of Singamas’ 11 depots in China, while the remaining four subsidiaries are among its nine Chinese factories.

Qidong Singamas Energy Equipment has the largest production capacity amongst all the nine factories, with annual production capacity of 270,000 teu of dry freight containers and 60,000 teu stainless steel refrigerated containers.

Qingdao Pacific Container and Ningbo Pacific Container have annual production capacity of 120,000 teu and 110,000 teu, respectively.

While Singamas Container Holdings (Shanghai) Limited is the R&D centre of the group.

The five factories that Singamas are keeping include Huizhou Pacific Container, Qingdao Pacific Container, Shanghai Baoshan Pacific Container, and Qidong Singamas Offshore Equipment.

Qidong Singamas Offshore Equipment has an annual production capacity of 5,000 units of offshore containers, while the rest of the four factories each have similar annual production capacity of 120,000 teu.

The four factories to be disposed of are contributing a combined annual production capacity of 500,000 teu to Singamas, while the remaining five factories have a combined annual production capacity of 480,000 teu plus 5,000 units of offshore containers.

With annual production capacity to be halved with the potential disposal, Singamas has rightly said that the deal “will constitute a very substantial disposal” of the company.

“The company believes that the potential disposal will be favourable to the transformation and upgrading of the group’s traditional business, which includes shifting the group’s business focus to logistics services and the manufacturing, R&D and sale of specialised containers, and that it will facilitate the implementation of the group’s differentiated development strategy for the container industry,” Singamas stated.

However, regardless of whether the potential disposal is significant or will proceed at all, Singamas said it plans to continue expanding the group’s presence in the specialised container industry by boosting operational efficiency and overall returns.

“With wider container applications, in addition to traditional shipping containers, the group sees rising demand for personalised and customised high value-added specialised containers,” Singamas said.

“With its leading technologies, market share in specialised containers and advantage of its broad-based logistics business, the company believes that the group has its competitive strengths in the industry chain of specialised containers business,” it added.

Show More

Related Articles

Check Also

Back to top button