KUCHING: Shin Yang Shipping Corp Bhd (Syscorp) is seeing better days ahead with anticipated further recovery in its shipping, shipbuilding and ship repair business.
Chairman Tan Sri Ling Chiong Ho said the recovery of the shipping sector has generated higher charter activities and driven up freight rates with an increase of 13.4% in the 12 months to June 30, 2021 (FY21), as compared to a year ago.
“Our container vessels has transported an increase of lifting capacity by 32% in twenty-foot equivalent units’ (TEUs) in FY21, as compared to 2020 from the 14 container vessels in our fleet. The shipping sector is expected to improve further in the second half of 2021,” he said.
In FY21, Syscorp’s containers utilisation rate rose to 81% from 68% in FY2020 while the utilisation rate of its international shipping climbed to 80% from 73%.
The utilisation rate of its chemical tankers (liquid bulk transportation) was maintained at a high 95% but that of dry bulk carriers was down to 52% from 57%.To boost and strengthen the service of its containerised shipping, Syscorp had acquired an additional vessel with carrying capacity of 1,200 TEUs per trip.
The group’s shipping operations covers both Malaysian and international waters, ranging from South-East Asia, East Asia and to the Far East. The operations is supported by a fleet of 229 vessels with gross revenue tonnage of about 357,100 tonnages.
Ling said with the continuous improvement in terms of fleet efficiency, routes enhancement and plying speed of its fleet of vessels, the group is expected to increase its container shipping by establishing strategic alliance with business partners.
This strategic alliance, he said, will provide efficient and effective port services while the partners aim to achieve economies of scale to increase shipping service frequency routes coverage between Sarawak, Sabah and Peninsular Malaysia from the group’s 14 container vessels.
“We analysed that domestic and coastal shipping were the major growth contributors covered for the local demand from the infrastructure and resource-based projects,” added Ling in the company’s annual report 2021.He said the group’s shipment of liquid bulk by tankers has shown its earnings stability. Besides shipment of crude palm oil within East Asia on time charter, Syscorp has an on-going two-year contract of affreightment to ship methanol products from Labuan with Petronas Chemical Marketing (Labuan) Ltd.
For dry bulk shipping, the group focuses on the transportation of loose bulk, like timber, plywood, quarry, aggregate, sand and cement plying major towns in Sarawak and Sabah, Port Klang, Brunei, Singapore, Thailand, Vietnam and Indonesia, on a regular basis.
According to Syscorp, the group has sufficient number of vessels for voyage and time charter and its current major charterers are from the oil and gas, cement and oil palm industries.In addition, the group is actively participating in sand extraction and reclamation of land with its fleet of tugs and barges and managing logistic service providers.
For international shipping, Syscorp’s fleet of eight cargo vessels ply routes to the Far East. On the returning bound, these ships are mainly on time charter for shipments of general cargo from the Far East to the Philippines and other Asean countries, then enroute back to the home region.
According to the company, the current cargo freight rate for international shipping has risen to US$50 (RM208.12) per cubic meter (cu m) from US$30 to US$44 (RM124.87 to RM183.15) per cu m previously.
“With the foreseen stable demand toward the international shipping in view of supply uncertainty in term of freight rates and utilisation, our emphasis is on time charter of vessels for international shipping.”
For the shipbuilding business, Ling said Syscorp completed and delivered three vessels to shipowners in FY2021 for contract values totalling RM19.9mil.
“Currently five vessels with a contract sum of RM119.4mil are still under construction as work in progress to be completed within the next two years,” he added.
For the coming year, Syscorp foresees maintaining shipbuilding orders from the Far West and Middle East regions and domestic demand. The company said recovery sentiments towards shipbuilding from the oil and gas sector was due to increase in capital expenditures by industry players.
In FY2021, Syscorp repaired 934 vessels, which was an increase of about 36% from 689 in 2020.With the strengthening of 160 meters in length and another unit with 80 meters in length of floating docks, this has boosted the group’s vessel maintenance work and helped to effectively carry out docking essential defect works.
On prospects going forward, Ling said Sarawak’s continuous infrastructure development has created numerous supporting spin-off shipping business activities, including the requirement for shipping and third party logistics from the resource based projects plying the South-East Asian regions.
Syscorp said the international dry bulk and container shipping market has made a promising start to 2022, with positive improvement in the Baltic Dry Index and asset values.
To position the group as an integrated shipping service provider, Syscorp paid RM43mil to acquire Melinau Transport Sdn Bhd, a leading firm in bulk cargo transportation, last year. Melinau is involved in road freight carriage primarily servicing all major ports in Sarawak.
* Credit news article from:https://www.klsescreener.com/v2/news/view/909967