Evergreen denies Italian firm acting as surrogate

Evergreen Group (長榮集團) yesterday rebutted a Chinese-language newspaper report that it is using its Italian subsidiary to expand market reach in China, despite the fact that the unit obtained approval from Chinese authorities last year to open branches there.

"The report is misleading and caused a lot of trouble for us," Evergreen spokesman Nieh Kuo-wei (聶國維) said yesterday, referring to a newspaper report that said Lloyd Triestino di Navigazione SPA had received permission to open branches in China, making Evergreen the first Taiwanese-funded company to obtain such approval.

Evergreen Marine Corp (長榮海運), Taiwan's largest container-shipping company, is the world's third-largest container-shipping firm, after Maersk-Sealand and Mediterranean Shipping Co.

Its shares gained NT$0.35, or 1.1 percent, to close at NT$31.40 on the Taiwan Stock Exchange yesterday.

`major breakthrough'

The report, citing Evergreen Marine president Arnold Wang (王龍雄), said that the approval was a "major breakthrough" for Evergreen in its attempt to make inroads into China, and would help the group integrate its logistics business there.

The paper also said that Evergreen can now save NT$700 million (US$22.2 million) per year since it will no longer need Chinese shipping companies to handle its shipments.

Nieh denied the report, saying that the "Operation of our Italian subsidiary did not change after gaining the approval, and the company has nothing to do with Evergreen Marine."

Instead, Nieh stressed that Lloyd Triestino, in which Evergreen holds a less than 50 percent stake, obtained the approval on March 30 last year and so established Lloyd Triestino (Shenzhen) Co.

He said that Lloyd Triestino (Shenzhen) still needs to work with Chinese logistics companies to collect and distribute shipments in accordance with Chinese regulations, and that the company has no plans to open a Shanghai branch as the report indicated.

ningbo deal

Despite its denial, Evergreen in January signed a deal with the Chinese city of Ningbo in Zhejiang Province to build a two-berth container terminal, according to a Jan. 20 report in the South China Morning Post.

The report said that the investment was being routed through its Italian shipping line, Lloyd Triestino, to avoid the sensitivity of direct investment in Chinese infrastructure projects.

Chinese authorities only allow Taiwanese logistics operators to set up representative offices in China for client liaison purposes and to collect market information.