Full steam ahead for shipping giant

He Fashu, a freighter captain employed by COSCO Shipping Corp, inspects the main engine at Kotka Harbor, Finland. [Photo/Xinhua]

China COSCO Shipping is expanding its global reach as part of the government's Belt and Road Initiative

China's largest shipping group is beefing up its operations to compete against global rivals as it pursues business opportunities thrown up by the Belt and Road Initiative.

Earlier this month, China COSCO Shipping Corp snapped up a 51 percent stake of Noatum Port, a Spanish container terminal operator, for $227.81 million.

The deal extended its ports and terminals network to the Mediterranean region in Europe, and dovetails with its massive merchant fleet of 1,028 ships.

"This initiative provides numerous opportunities for Chinese companies to carry out the Going Global strategy, and the Belt and Road Initiative," said Xu Lirong, chairman of the State-owned company.

China COSCO Shipping is an ocean-going giant and was born from the merger of China Ocean Shipping (Group) Co and China Shipping (Group) Co in 2016.

It has already rolled out a port strategy along the 21st Century Maritime Silk Road, which is part of the Belt and Road Initiative.

Included in this was the Noatum Port acquisition by COSCO Shipping Ports Ltd, a subsidiary of the parent company. It took a controlling stake in Noatum Port Holdings SLU from TPIH Iberia SLU of Spain.

"China COSCO Shipping will use its abundant overseas resources in this new project, and provide supporting services from our overseas shipping and ports networks," Xu said.

A worker connects loading hooks to goods from a COSCO Shipping freighter at Kotka Harbor, Finland. [Photo/Xinhua]

Naturally, this is all part of the company's Belt and Road Initiative blueprint, with Noatum Port, which operates container terminals in Port of Valencia and Port of Bilbao in Spain, a key link in the chain.

The group will also expand port services, logistics, industrial equipment manufacturing, and financial and shipping services.

"This will be in countries related to the Belt and Road Initiative, especially in Southeast Asia, Africa, the Middle East and Europe," Xu said.

One key acquisition made by the company's subsidiary, COSCO Pacific in Hong Kong, was Turkey's Kumport Terminal in 2015.

Last year, the Port of Singapore Authority was extensively upgraded by the group, while it also bought the Piraeus Port Authority in Greece and invested in the Euromax Terminal Rotterdam in the Netherlands.

As for the big picture, China COSCO Shipping owns more than 46 container terminals across the world, with over 190 berthing spaces.

"The amount going through our container terminals worldwide amounts to 90 million twenty-foot equivalent units or TEU, making it the second biggest in the world," the company stated. "Global sales volume of our ship bunker fuel exceeds 25 million metric tons, topping the world's list."

Other figures showed that China COSCO Shipping's container leasing business surpassed 2.7 million TEU, which is the third-largest in the world.

During the first four months of this year, the group's shipping volume registered a year-on-year increase of 9.8 percent, with terminal throughput of 12.2 percent. Projected logistics volume was 8.7 percent.

Operating revenue and profit showed double-digit growth although the State-owned company declined to disclose detailed financial figures.

Back on dry land, COSCO Shipping Logistics Co completed construction on the Central and Eastern Europe Trade Logistics Park Base (Phase-I) in the Ningbo Free Trade Zone of East China's Zhejiang province.

"The base will provide central Eastern European traders and e-commerce players with a one-stop supply chain solution by integrating 'overseas warehouse' operations, cargo agencies, bonded and food warehousing, logistics distribution and trade enforcement," said Han Jun, president of COSCO Shipping Logistics.

The sprawling complex has been divided into three phases.

Opened earlier this month, the 12,000-square-meter constant-temperature food warehouse was part of phase one. The design and construction of a constant-temperature food warehouse for the second phase will be started in July.

That will be followed by the third phase, a cold chain warehouse, scheduled to be built when demand takes off for products from Eastern European countries.

"Even though the world's shipping market has limped along since 2009 because of weak demand, the Belt and Road Initiative can effectively offer a lifeline to ailing global shipping companies," said Dong Liwan, a professor at Shanghai Maritime University.