Yangming Marine Transport Corp last week succeeded in raising NT$10.3 billion (US$343 million) of capital, which would help the firm further expand its operations in Southeast Asian nations, the Ministry of Transportation and Communications said on Tuesday.
The firm last year had accumulated financial losses of about NT$15 billion. It started to restructure its finances by reducing its capital by NT$16 billion at the end of last year.
The firm raised its capital again in December last year and in June to NT$10.3 billion.
The move was made possible after state-run Taiwan International Port Corp (TIPC) converted the debt owed by Yangming into an investment and changed its role from a creditor to a shareholder, Minister of Transportation and Communications Hochen Tan (賀陳旦) said.
“The two companies can work together more closely in finance and business. The partnership is also part of the strategy stipulated to address five major shortages facing the nation,” Hochen said, adding that state-run companies are major powerhouses for GDP growth.
China’s booming e-commerce market has stimulated the growth in air and sea cargo services, he said.
“We can combine the shipping lines offered by Yangming, ports owned by TIPC and the logistics services provided by Chunghwa Post so the goods would not only be delivered from port to port, but can also can be delivered from port to door,” he said.
Yangming chairman Bronson Hsieh (謝志堅) said that the company has conducted a series of reforms in addition to raising capital, including restructuring its organization, developing better strategies to canvass cargo and refining computer systems.
Meanwhile, as the global shipping sector rebounds from last year’s slump, the firm generated a profit of NT$1.2 billion in the third quarter of this year, Hsieh said, adding that the company has also reduced its losses by 99 percent compared with the first three quarters of last year.
Hsieh laid out the firm’s development strategies following internal reforms.
The company is to retire 20 cargo ships in the next three years, he said, adding that the capacity of the ships is between 3,000 twenty-foot equivalent units (TEUs) and 8,000 TEUs.
The company is formulating a plan to lease or build new cargo ships with similar or bigger capacity, Hsieh said, adding that a majority of the new ships would be used for shipping services in the Southeast Asian region targeted by the New Southbound Policy.
Hsieh said that Yangming’s partnership with TIPC would allow them to jointly expand the market in those nations, which is new territory for the shipping firm.
Both have taken the first step by establishing a container freight station in Surabaya, Indonesia, which is scheduled to begin operations in the first quarter of next year, Hsieh said.
They could also cooperate in investing or operating a logistics service industry in Southeast Asia, he said.
Supply in the global shipping industry would still exceed demand next year, but the industry is expecting a good year in 2019 if oil prices remain low, Deputy Minister of Transportation and Communications Frank Fan said.
“The question is: Is the nation ready for a bull market?” Fan said.
Asked whether China’s “One Belt, One Road” initiative would create obstacles for Taiwan in seeking business opportunities in Southeast Asia, Hochen said that there would be competition, but that does not necessarily mean that there would be obstacles, if the companies can find the right partners or services in which to invest.
Source: Hellenic Shipping News.