<TABLE border=0 cellSpacing=0 cellPadding=0 width=452><TBODY><TR><TD vAlign=top width=452 colSpan=2>Published September 5, 2009
</TD></TR><TR><TD vAlign=top width=452 colSpan=2>'Container homes': Two crises, one solution
Singamas' new venture comes as it tries to offset a slump in demand for sea-cargo boxes
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(Hong Kong)
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</TD></TR><TR class=caption><TD>MR TEO
Is turning to house-kits and other specialised containers, including live-fish units and trash compactors, in an attempt to boost profit margins</TD></TR></TBODY></TABLE>TEO Siong Seng is tackling the shipping crisis and the housing crisis at the same time.
The chief executive officer of Singamas Container Holdings, the world's second-biggest maker of sea-cargo boxes, is building 'houses in containers', complete with electric appliances and bathroom fittings, in an effort to offset a slump in demand for traditional boxes as world trade sags.
Mr Teo is turning to the house-kits, which cost from US$30,000, and other specialised containers, including live-fish units and trash compactors, in an attempt to boost profit margins. The company slashed production of traditional containers by 95 per cent in the first half as shipping lines pared orders.
'People can get these houses and assemble them very quickly,' Mr Teo said in an interview. 'They're ideal when construction materials aren't easily available.'
The house-kits are shipped from China and assembled at the destination, with the containers forming the building's walls, he said. Prices run from US$30,000 to US$100,000 each, depending on the number of bedrooms and other options. Singamas is seeking deals in Africa and Australia after winning contracts to supply two South Pacific nations, Mr Teo said. 'We are aiming to move up the value chain.'
The company has also sold 400 containers fitted with tanks that can hold live fish, said chief financial officer Sylvia Tam.
The tanks can be cooled so that the fish sleep during long-haul journeys, preventing them from getting thin by swimming, she added. The boxes cost more than US$25,000 each, Ms Tam said. Traditional shipping containers cost an average of US$2,131 each.
Singamas is also bidding for a contract to supply trash containers in Shanghai, Mr Teo said. It eventually aims to sell as many as 3,000 garbage-boxes a year worldwide. The units cost as much as US$6,000 each.
The company earned 65 per cent of revenue from specialised boxes in the first half, compared with about 18 per cent before the financial crisis, Mr Teo said. Previously, it had expected specialised units to account for no more than 30 per cent of sales until 2011, he added.
Singamas, which has cut staff by more than a third, halted production of traditional boxes for two months in the first half because of the demand slump. It has also delayed opening plants in Xiamen and Shanghai by one year until the second half of 2010.
The container-maker reported a US$27.4 million first-half loss, compared with a year earlier profit. It expects a narrower loss in the second half, Mr Teo said. It may also start hiring again as early as year's end in anticipation of a rebound in demand, Mr Teo said. 'Going forward, both dry-freight and specialised containers will grow,' Mr Teo said. 'It will take a while to see a rebound, but it's gradually recovering.'
Singamas shares rose 1.4 per cent to HK$1.47 at the close of trading in Hong Kong yesterday. It has more than quadrupled this year, compared with the benchmark Hang Seng Index's 41 per cent gain.
Larger rival China International Marine Containers (Group) Co has climbed 67 per cent this year in Shenzhen trading. -- Bloomberg
</TD></TR></TBODY></TABLE>
</TD></TR><TR><TD vAlign=top width=452 colSpan=2>'Container homes': Two crises, one solution
Singamas' new venture comes as it tries to offset a slump in demand for sea-cargo boxes
<TABLE class=storyLinks border=0 cellSpacing=4 cellPadding=1 width=136 align=right><TBODY><TR class=font10><TD width=20 align=right>
</TD><TD>Email this article</TD></TR><TR class=font10><TD width=20 align=right>
</TD><TD>Print article </TD></TR><TR class=font10><TD width=20 align=right>
</TD><TD>Feedback</TD></TR></TBODY></TABLE>(Hong Kong)
<TABLE class=picBoxL cellSpacing=2 width=100 align=left><TBODY><TR><TD>
</TD></TR><TR class=caption><TD>MR TEOIs turning to house-kits and other specialised containers, including live-fish units and trash compactors, in an attempt to boost profit margins</TD></TR></TBODY></TABLE>TEO Siong Seng is tackling the shipping crisis and the housing crisis at the same time.
The chief executive officer of Singamas Container Holdings, the world's second-biggest maker of sea-cargo boxes, is building 'houses in containers', complete with electric appliances and bathroom fittings, in an effort to offset a slump in demand for traditional boxes as world trade sags.
Mr Teo is turning to the house-kits, which cost from US$30,000, and other specialised containers, including live-fish units and trash compactors, in an attempt to boost profit margins. The company slashed production of traditional containers by 95 per cent in the first half as shipping lines pared orders.
'People can get these houses and assemble them very quickly,' Mr Teo said in an interview. 'They're ideal when construction materials aren't easily available.'
The house-kits are shipped from China and assembled at the destination, with the containers forming the building's walls, he said. Prices run from US$30,000 to US$100,000 each, depending on the number of bedrooms and other options. Singamas is seeking deals in Africa and Australia after winning contracts to supply two South Pacific nations, Mr Teo said. 'We are aiming to move up the value chain.'
The company has also sold 400 containers fitted with tanks that can hold live fish, said chief financial officer Sylvia Tam.
The tanks can be cooled so that the fish sleep during long-haul journeys, preventing them from getting thin by swimming, she added. The boxes cost more than US$25,000 each, Ms Tam said. Traditional shipping containers cost an average of US$2,131 each.
Singamas is also bidding for a contract to supply trash containers in Shanghai, Mr Teo said. It eventually aims to sell as many as 3,000 garbage-boxes a year worldwide. The units cost as much as US$6,000 each.
The company earned 65 per cent of revenue from specialised boxes in the first half, compared with about 18 per cent before the financial crisis, Mr Teo said. Previously, it had expected specialised units to account for no more than 30 per cent of sales until 2011, he added.
Singamas, which has cut staff by more than a third, halted production of traditional boxes for two months in the first half because of the demand slump. It has also delayed opening plants in Xiamen and Shanghai by one year until the second half of 2010.
The container-maker reported a US$27.4 million first-half loss, compared with a year earlier profit. It expects a narrower loss in the second half, Mr Teo said. It may also start hiring again as early as year's end in anticipation of a rebound in demand, Mr Teo said. 'Going forward, both dry-freight and specialised containers will grow,' Mr Teo said. 'It will take a while to see a rebound, but it's gradually recovering.'
Singamas shares rose 1.4 per cent to HK$1.47 at the close of trading in Hong Kong yesterday. It has more than quadrupled this year, compared with the benchmark Hang Seng Index's 41 per cent gain.
Larger rival China International Marine Containers (Group) Co has climbed 67 per cent this year in Shenzhen trading. -- Bloomberg
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