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China Cosco Shipping Corp officially established

China Cosco Shipping Corp officially established
Newly formed China Cosco Shipping Corporation Limited has been officially launched on Thursday in Shanghai, gelling together China’s two biggest state-owned shipping conglomerates – China Cosco Group and China Shipping Group (CSG).

The merged China Cosco Shipping is led by chairman Xu Lirong, current chairman of CSG, while China Cosco’s deputy general manager Wan Min has assumed the position of president.

Since the merger news circulated last year, eight listed companies of the two shipping groups saw their shares trading halted in August, before Beijing officially approved the merger in December.

Xu Lirong was reported saying that before the merger, neither China Cosco nor CSG possessed the resources to be competitive on the global stage. After the merger, however, the two conglomerates will achieve a business scale with greater outreach from the integration of their distinct operating units.

China Cosco Shipping will boast a combined fleet of 1,114 ships of various types with a total carrying capacity of 85.32m dwt. Among them, the dry bulk and tanker fleet capacity will be the world’s largest, while the container vessel capacity at 1.58m teu will be number four.

The newly merged group will have 46 container terminals globally with overall terminal throughput at around 90m teu, ranking second in the world. Its container leasing business scale will be over 2.7m teu, ranking it third in the world.

China Cosco Shipping Corp will also focus on a so-called 6+1 industrial clusters, which are shipping, logistics, finance, equipment manufacturing, shipping services, socialised industry, plus business related to the Internet Plus initiative based on business innovation.

“We believe that by proceeding with the 6+1 industrial layout, China Cosco Shipping Corp will form a complete global business chain within a short time, laying a solid foundation for the globalisation of the group,” China Cosco Shipping Corp said in a statement.

In the container shipping segment in particular, it remains unclear how China Cosco and CSG intend to stick to their operational cooperation in their respective alliances, which is CKYHE for China Cosco and Ocean Three for CSG’s China Shipping Container Lines (CSCL).

Container shipping analyst Alphaliner said this week that China Cosco has yet to reveal any post-merger alliance plans to follow its absorption of CSCL’s container shipping operations.

Alphaliner further suggested that France’s CMA CGM and China Cosco are leading a joint effort to set up a new mega carrier alliance by roping in Evergreen and Orient Overseas Container Line (OOCL), with the alliance potentially named CCEO.