MISC to close its container shipping business
MISC Berhad (MISC) has announced its decision to exit the container shipping sector via cessation of its liner business.
"With eight distinct businesses, investment prioritisation and opportunity cost consideration are necessary as we allocate resources to support the growth of each business sector. Our focus in recent years has been on providing maritime and transportation solutions for the energy sector, and thus, it is only natural that the bulk of our resources are dedicated towards growing our energy based business segments. In view of the expected larger demand of investment in the liner industry, the cost for us to remain relevant in the liner business is untenable," said Datuk Nasarudin Md Idris, President/Chief Executive Officer of MISC.
In January 2010, MISC undertook a restructuring of its liner business when it exited the Far East-Europe trade services to re-focus on an Intra-Asian model. The decision was taken on the back of the faster and greater economic growth prospects of the Asian region and to enable the company to build scale in the liner business as well as to review its sub-optimal asset portfolio to support the new business model.
However, with the industry plagued by overcapacity and container rates trending below operating costs, the company’s liner restructuring plans have suffered; leading to the decision to exit the liner business altogether.
The company’s decision was also hastened by the present difficult operating conditions which have seen its liner business suffering a total financial loss of US$789m over the past three years, impacting the overall financial performance of MISC.
MISC said that after due consideration of operational and legal requirements, the company anticipates cessation of the liner business to take place by the end of June 2012.
Quelle: eyefortransport
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