Business

Thursday August 23, 2012

CPO transport adds to Shin Yang revenue


KUCHING: Shin Yang Shipping Corporation Bhd (Syscorp) has broadened its revenue base with the commencement of crude palm oil (CPO) transportation.

Group financial controller Richard Ling said the maiden CPO shipment by Merris 1 - a 12,729-tonne chemical tanker - left for China about 10 days ago.

Merris 1 is one of the two chemical tankers owned by newly established Micaline Sdn Bhd, a 55:45 joint venture between Syscorp’s unit Danum Shipping Sdn Bhd and plantation firm Sarawak Oil Palms Bhd (SOP).

The other tanker is Merris 2, which is expected to start CPO transportation from Malaysia to India in one to two months.

The two chemical tankers were among 20 vessels, including container vessels and tug boats acquired by Syscorp from Swee Joo Bhd, which went into voluntary liquidation due to insolvency.

Swee Joo, one of the most established shipping firms in Sarawak, collapsed last year after it failed to resolve its group borrowings of some RM460mil.

Ling said CPO transportation would start contributing to Syscorp group revenue from current financial year ending June 30, 2013.

“There will be enough CPO cargo for Merris 1 and Merris 2 to transport as the Sarawak oil palm market is big,” he told StarBiz recently. Merris 1 is expected to carry two CPO shipments a month to China.

SOP, a leading oil palm producer in Sarawak, has some 63,000ha plantations mostly in the northen region.

The company has recently commissioned its first palm oil refinery and fractionation plant as well as a kernel crushing plant in Bintulu.

SOP owns and operates five CPO mills, and the sixth is currently under construction.

Ling said Syscorp had deployed six of the eight container vessels it bought from Swee Joo for new routes covering Bangkok and Brunei.

He said two other bigger container ships, which could transport about 1,000 TEUs each, were being upgraded at Syscorp shipyard.

These two vessels is likely to be assigned to serve intra-Asian routes, probably between Malaysia and China.

Miri-based Syscorp group owns and operates a fleet of more than 310 vessels of various types, including three anchor-handling tugs (AHTs) and 27 sets of tug and barges deployed in Middle East routes.

“We have four container vessels plying between Peninsular Malaysia and Miri and two container vessels serving Peninsular Malaysia-Sabah route.

“These vessels carry around 450 TEUs each,” he added.

On Syscorp’s shipbuilding business, Ling said the company was in talks with several potential buyers of high-value vessels mainly to serve the oil and gas industry.

“Nothing has firmed up as yet on the on-going negotiations with the parties concerned,” he added.

The last shipbuilding contract worth RM166.3mil Syscorp secured in May (2012) was by its wholly-owned subsidiary, Shin Yang Shipyard Sdn Bhd.

The contract from Brunei-based Belait Shipping Co (B) Sdn Bhd was for the construction of two units of 77-metre diesel electric dynamic positioning and two platform supply vessels. The vessels are expected to be delivered by the fourth quarter of 2013 and the second quarter of 2014.

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