[030911.EN.BIZ] Rising Prices Increase Container Manufacturer Singamas Profits 900pc

HONG KONG-listed Singamas Container Holdings saw profit surge about 900 per cent to a record US$101.9 million for the first half of the year as revenues rose 109.7 per cent to $1 billion.

Vice chairman Teo Siong Seng said the increase was helped by a 113.6 per cent increase in revenue from the container making division, which contributed 98.3 per cent of turnover.

The company sold 394,310 TEU in the first half, up from 236,190 TEU in the same period last year, as shipping lines and container leasing companies expanded their holdings.

The average price of a Singamas-made TEU rose to $2,760 between January and June this year from $2,155 over the same period last year.

The world's second-largest container maker, Singamas, accounts for 34 per cent of the global container market.

Mr Teo said the company's 11 factories operated at 93 per cent of capacity, producing an average of 75,000 TEU a month. Plant utilisation in 2010 was 85 per cent.

Singamas is building a new factory in Qidong, in Jiangsu province, to replace two factories - Shanghai Baoshan and Shanghai Reeferco - when it becomes fully operational next year.

Mr Teo said the Qidong plant, which will be completed in two phases, would be more "environmentally friendly, highly automated and more energy efficient" than the firm's existing facilities.

He added that Singamas had one month's orders in hand but monthly production had been cut to 60,000 TEU between July and September in the face of possible power shortages in China during the hot summer months.

Mr Teo said concern over the debt crisis in the US and euro-zone economies has prompted shipping lines and leasing companies to cut back their orders for new containers.

"We are confident demand will resume after the debt crisis is over," he added.

Source : HKSG.