Qingdao-based Shandong Shipping Corp and Taiwan's Eddie Steamship are targeting capesizes and the iron-ore trades with new shipowning joint venture Shandong Shipping Asset Management Corp (SSAMC).
The tie-up has only recently been signed, but a source with knowledge of the situation said it has been under negotiation for over a year. SSAMC expects to secure mainland financial backing.
The effort comes in the wake of a similar venture last year between a local state-owned company on the mainland and another Taiwanese shipowner.
The formation of ITG U Ming (Xiamen) in June saw Taipei-based U-Ming Marine Transport take a 49% shareholding alongside trading conglomerate Xiamen ITG Group, the majority partner, based in Fujian, just across the Taiwan Strait. Unlike the SSAMC venture, ITG U Ming will target the Chinese domestic trades.
In August, TradeWinds reported that another Taiwan shipowning stalwart, Chinese Maritime Transport (CMT), was strengthening its mainland ties by opening a Shanghai office. It was also planning to expand its capesize fleet with newbuildings at Shanghai Waigaoqiao Shipbuilding orQingdao Beihai Shipbuilding Heavy Industry. These plans are understood to be on hold while CMT considers opting for scrubbers.
It is understood that SSAMC has several acquisition projects under discussion.
Third partner
However, there is a third venture-partner waiting in the wings and no decision will be made until it formalises its participation.
Eddie Steamship will hold 20% of SSAMC and Shandong Shipping will own 38%. The latter is indirectly controlled by industrial concerns owned by the Shandong provincial government. The remaining 42% will be owned by a party to be named Ocean Asset Shipping (OAS).
Sources said OAS will be registered outside China and Taiwan but will be controlled by a single mainland, non-shipping related Chinese entity, which will participate as an investor only.
Internal board approval is pending for OAS' participation in the new venture, which will likely focus on iron-ore shipping, and commercial management is likely to be shared between Qingdao province and Taipei, Taiwan.
Conservative strategy
In recent years, Taiwan shipowner Hsu Chih-Chien (CC Hsu) has sold out of his stock-listed vehicle Courage Maritime — now Courage Investment — and adopted a conservative fleet strategy for family-controlled Eddie Steamship, a 92-year-old company that operates six ships from handyman to post-panamax.
Although Eddie Steamship has been largely focused on the coal trades and smaller ships in recent years, it was heavily involved in iron-ore transportation in the 1990s and 2000s. It traded capesizes under contracts of affreightment with Kaohsiung-based China Steel and mainland steelmaker Baoshan.
Shandong Shipping, a relatively young but ambitious shipowner with separate operations in gas, offshore, tanker and dry bulk, has long harboured a desire to build up a dry bulk platform for stock listing alongside its VLGC-owning affiliate Pacific Gas.
TradeWinds reported last month that Shandong Shipping's latest dry bulk plan is to order a quartet of kamsarmaxes for long-term charter to Bunge with the support of ICBC Leasing. It also has an order book of kamsarmax newbuildings through its Singapore joint venture, SDTR Shipping.
