China's largest oil shipper plans to invest 3.8 billion yuan (US$458 million) to construct 11 oil tankers and eight dry-bulk vessels by 2005.

The investment will enhance China Shipping Development's total capacity by 36 to 37 percent. This will allow it to take full advantage of the opportunities brought about by the renewed expansion of the Chinese oil shipping industry.

The announcement came after the company reported a significant 75 percent increase year-on-year in its first half earnings.

Chairman Li Kelin said about 20 percent of the investment will be financed by bank facility, while the remaining balance will be funded by the company's own internal resources, providing an operating cash inflow of 1.7 billion yuan (US$205 million) per annum.

The mainland-based shipper said it has entered into and will ink contracts for the construction of 9 oil tankers with a total capacity of 1.1 million tons.

The company expects its net profit for the first 9 months of the year to increase over 50 percent year-on-year. The expected sharp increase in profit within the 9-month period is attributed to rapid growth in domestic cargo transportation, cost-control measures and readjustment of policies on the depreciation of vessels. Revenue from oil transportation amounted to 1.58 billion yuan (US$190.4 million), which accounted for 67.1 percent of the company's turnover.

The shipping firm revealed yesterday that its parent company is slated to join hands with Wharf's Modern Terminals to invest in the first phase of the Yangshan Port terminal project in Shanghai. The total investment will amount to about 9 billion yuan (US$1.1 billion), said Li.

(China Daily HK Edition August 27, 2003)