A group of six state-run and private companies are soon to form an offshore holding company in Singapore, aiming to invest in shipping-related businesses in Southeast Asian nations targeted by the government’s New Southbound Policy.
The companies — Taiwan International Ports Corp (TIPC), Yang Ming Marine Transport Corp, Tungya Transport and Terminal Co, Taiwan Navigation Co, T S Lines Co and Chunghwa Post — yesterday jointly signed a letter of intent in Taipei and announced that a committee would be formed to set up the offshore holding company.
TIPC and Chunghwa Post are state-run companies under the Ministry of Transportation and Communications. The ministry has 20 percent ownership of Yang Ming Marine Transport and is its largest shareholder. The other three companies are private shipping firms.
“The government aims to turn a diplomatic policy into a substantial business partnership between the public and private sectors,” Minister of Transportation and Communications Hochen Tan (賀陳旦) said.
“The government is willing to assist our partners in finding business opportunities [in Southeast Asian countries],” he added.
The offshore holding company is to be formed in Singapore as the nation is close to the firms’ target market, Hochen said, adding that the nation also offers a lively shipping environment.
Shareholders of the new offshore holding company focus on different aspects of the shipping business and each would benefit from the synergy produced through the partnership, he said.
ASEAN members offer a population exceeding 600 million, with GDP growth of more than 5 percent on average, TIPC chairman Wu Hong-mou (吳宏謀) said, adding that the region has become an important trading partner of Taiwan.
“At this crucial juncture, we need an offshore operational base that will enable us to build up our trade network in Southeast Asia,” Wu said.
Shareholders in the new company would not only share information, but business opportunities as well, Wu said.
The company’s investments are expected to be diverse, as the shareholders’ core businesses are different, Wu added.
“We hope that the shareholders will be able to get the consent of their respective boards of directors by August and that the holding company will be set up by October,” he said.
About 33 percent of the holding company’s shares would be owned by TIPC, and another third by Yang Ming Marine Transport, Wu said, adding that the rest would be divided among the remaining partners.
“We plan to invest a total of US$40 million in the new overseas company. In the initial phase, the company’s paid-in capital will be US$10 million,” Wu said.
The new company is to initially focus on low-risk investments such as container freight stations in Thailand, Indonesia and Vietnam, or in the Philippines, Wu said, adding that investments would gradually expand to include warehousing and logistics services.
Yang Ming Marine Transport used to only invest in shipping-related businesses in Europe, the US and Taiwan, company chairman Bronson Hsieh (謝志堅) said.
It was only recently that the company began to invest in the Southeast Asia, Hsieh added.
Apart from the region’s GDP and population, Hsieh said that it is simply in Yang Ming’s best interest to become an important shareholder in the holding company.
The amount of cargo that Yang Ming handles in Southeast Asia is about 2 million 20-foot equivalent units, Hsieh said, adding that firms that the holding company invests in could handle some of those containers.
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