China Resources Cement, an affiliate of one of China’s leading conglomerates, China Resources Group, has formed a domestic shipping joint venture in an effort to offset rising transportation costs, writes Hui Ching-hoo.
The company has teamed up with Guangxi Xijiang Navigation Construction Development to form the joint company, which has a registered capital of Yuan100m ($14.7m). China Resources Cement will have a 49% stake while its partner will hold 51%. The two partners plan to invest a total of about Yuan200m in the venture.
A China Resources Cement spokesman told Lloyd’s List that the joint company would acquire up to three vessels to mainly transport cement along the Xijiang river, which is the western tributary of the Pearl river in southern China. The ships are expected to start operating from early next year.
He said: “Our cement shipment volumes are about 8-10Mta. We now use local shipping lines to undertake the shipments, but freight rates have surged significantly.”
The spokesman said transportation costs would be reduced with the creation of the company’s own fleet.
China Resources owns 20 cement plants along the Xijiang river and it accounted for about 33% of the total cargo volumes transport along the river.