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22 Operations Review COSCO Corporation (Singapore) Limited Ship Repair and Marine Engineering COSCO Corporation’s ship repair operations began ten years ago with the foundation of its subsidiary, COSCO Marine Engineering (Singapore) Pte Ltd, which provides 24-hour marine engineering and ship repair services in Singapore. COSCO Corporation subsequently increased its ship repair capabilities with the acquisition of significant stakes in two of the largest shipyards in the COSCO Shipyard Group, COSCO (Nantong) Shipyard Co Ltd and COSCO (Dalian) Shipyard Co Ltd in 2002 and 2003 respectively. This expansion culminated in September 2004, when COSCO Corporation announced its proposed acquisition of a 51% stake in the entire COSCO Shipyard Group.
23 Operations Review COSCO Corporation (Singapore) Limited Established in 1994, COSCO Shipyard Group is one of the largest ship repairing groups in China, with approximately 18% of the China market in 2003. It has seven ship yards, of which COSCO (Nantong) Shipyard and COSCO (Dalian) Shipyard are the top two ship repairing yards in China, in terms of earnings. With the acquisition, COSCO Corporation’s stakes in the Nantong and Dalian shipyards have risen to 75.5% and 70.60% respectively. All seven shipyards are strategically located along China’s busy coastline in Nantong, Dalian, Guangzhou, Shanghai, Tianjin, Xiamen and Zhoushan. Together, they have a total docking capacity of 955,000 dwt. Currently, COSCO Corporation offers ship repair, marine engineering and related services, of which ship repair contributes about 91% of total earnings. Other services include specialised work such as ship conversion (including the conversion of dry bulk carriers to Ro-Ro vessels) and jumbolisation. They also include high valueadded services such as oil rig manufacture and repair, a sector recently identified as having good potential growth. New-builds are also undertaken, such as the building of four 250 dwt river barges for a US company in 2003. In addition to the above, through its subsidiary COSCO Marine Engineering (Singapore), COSCO Corporation offers marine engineering services and ship repair onsite as well as onboard ships at its 6,571sqm waterfront shipyard in Jurong. Services provided include engine-room work, steel work, automation and hydraulic system repair, air-conditioning and refrigeration work, electrical work, workshop machining, precision engineering and the supply of spare parts. Over the past decade, COSCO Shipyard Group has repaired or converted thousands of ships from all over the world. The shipyards enjoy long-standing relationships with some of the most established shipping companies worldwide, the majority of whom are in the global top ten. International clients represent 90% of shipyard turnover, including major shipping companies in Greece, Germany, Norway, Denmark, UK, USA and Japan. The loyalty of these customers is testament to the quality of service and competitive pricing they receive, combined with timely delivery. The year in review COSCO Corporation’s ship repair business performed extremely well during the year in review, as expected. Specifically, total earnings from the associate ship repair and engineering companies increased over FY2003. Profit before tax soared to S$35.8 million, or 107% higher than the S$17 million achieved in FY 2003. The income contributed by the ship repair and engineering business this year represented 3% of COSCO Corporation’s total turnover. However, as earnings from the newly acquired shipyards will only be consolidated and reflected in FY2005, the contribution from ship repair will increase significantly, as will the turnover of the whole Group. It is anticipated that ship repair and engineering will contribute to 70-80% of COSCO Corporation’s total turnover in the future, while the shipping business will contribute about 20%. In terms of number of ships repaired and converted, a total of 499 ships were repaired and converted at COSCO Shipyard Group shipyards in FY2004. This was an increase of 8.9% compared to the 458 ships handled in the previous year. Considering the fact that the expansion programme is still underway and not all the shipyards were fully operational during the period of review, the total number of ships repaired or converted next year is expected to rise significantly. Types of vessels repaired or converted in FY2004 Number of ships repaired at COSCO Shipyard Group shipyards in 2003 and 2004 2003 2004 COSCO SHIPYARD GROUP 458 499 COSCO Nantong 141 144 COSCO Dalian 175 180 COSCO Corporation (Singapore) Limited Annual Report 2004
Page 1 and 2: COSCO Corporation (Singapore) Limit
Page 3 and 4: 01 Corporate Profile COSCO Corporat
Page 5 and 6: 03 Building Scale COSCO Corporation
Page 7 and 8: 05 Increasing Value COSCO Corporati
Page 9 and 10: 07 Growing Opportunities COSCO Corp
Page 11 and 12: 09 At A Glance COSCO Corporation (S
Page 13 and 14: 11 Financial Highlights COSCO Corpo
Page 15 and 16: 13 Chairman’s Letter COSCO Corpor
Page 17 and 18: 15 President’s Statement COSCO Co
Page 19 and 20: 17 President’s Statement COSCO Co
Page 21 and 22: 19 Operations Review & Geographical
Page 23: 21 Operations Review COSCO Corporat
Page 27 and 28: 25 Operations Review COSCO Corporat
Page 29 and 30: 27 Operations Review COSCO Corporat
Page 31 and 32: 29 Inside COSCO Corporation COSCO C
Page 33 and 34: 31 Inside COSCO Corporation COSCO C
Page 35 and 36: 33 Board of Directors COSCO Corpora
Page 37 and 38: 35 Board of Directors’ Profile CO
Page 39 and 40: 37 Corporate Structure COSCO Corpor
Page 41 and 42: 39 Financial Review COSCO Corporati
Page 43 and 44: 41 Corporate Governance COSCO Corpo

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