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MD's Message

I am glad to share that our Liner Management System (LMS) has been successfully launched on 2 May. I wish to thank everyone for your cooperation and hardwork, especially during the data migration period from 29 April to 1 May. Well done!

Looking back, 2016 has been a turbulent year with our financial result adversely affected by the very low freight rates and the one-off bunker hedging loss in the first half of the year. With the reduction of shipping capacity in the market due to the demise of Hanjin Shipping in July 2016 and together with the improved trading environment, we are glad to see steady recovery of freight rates starting from Oct 2016.

Container liner shipping industry will continue to consolidate with less players remain in the market. We are cautiously optimistic that 2017 will be the turning point for the industry and we expect the business going forward to be relatively stable. Nevertheless, we would continue to focus on effective cost management and service rationalisation to remain competitive in the market.

Africa will continue to be our key market. We have been working closely with China Cosco to further enhance our services in both West Africa and East Africa with deployment of vessels of optimum size for the trade. We are also taking steps to strengthen our land based logistics activities including distribution centre, trucking, inland CFS and container depots.

Together with our strategic partners, Wan Hai and China Cosco, PIL would be increasing our capacity in the Transpacific Trade. Effective from April this year, we would be offering 7 services with comprehensive port coverage from Asia/China to Canada and US West Coast.

Beside the cooperation in the container liner services, PIL will work closely with China Cosco in terminal operation, ship repairs, container manufacturing, bunker procurement, multi-purpose shipping service, logistics and ship agencies.

As I mentioned in my previous message, China and Singapore has agreed the third G to G project in Chongqing. I am honoured to be appointed by Singapore Government to take lead in the Transport and Logistics Initiative. Two new projects to expand Chongqing's transport link to South East Asia (via Beibu Gulf in Guangxi) and Central Asia were launched. They are the Chongqing Logistics Development Platform (CLDP) and the Multi-modal Distribution and Connectivity Centre (DC).

The CLDP agreement was signed by PIL and PSA Singapore with 6 key logistics Groups in Chongqing. PIL and PSA are also participating in the DC agreement together with another 3 Singapore companies. Both agreements were signed on 26 Feb 2017 in the presence of Minister in the Prime Minister's office Chan Chun Sing (Singapore) and Chongqing Mayor Zhang Guoqing. Supporting the China's "one belt one road" initiative through the southern corridor, we expect to derive synergy advantage for PIL Group especially with our investment in Qinzhou Port in Guangxi.

We executed three MOUs with Apollo LogiSolutions (India) to facilitate the formation of joint venture companies dealing with liquid tank logistics, container freight services (CFS) and cold chain logistics in India. We signed a MOU in Kenya with China Guangzhou Nansha Development Zone. The MOU will act as catalyst to facilitate and enhance the opportunities for the business community in East Africa to further grow their business with China through the development of Nansha Free Trade Zone. The business activities and market presence of PIL will also be strengthened in support of the "one belt one road" initiative.

Last but not least, PDL, another subsidiary company of PIL, operating shipping services in the Pacific Islands, signed a MOU together with Mckay Shipping (New Zealand) and Punjas & Sons (Fiji) to invest in William & Gosling (W&G). W&G, a diversified company started operations in 1921, provides air/sea freight forwarding, customs brokerage, land haulage, warehousing, ship agency, stevedoring, third party logistics solutions, etc. This investment into W&G will further consolidate PDL position in Fiji and expand PIL Group service offerings in the Pacific Islands.

As we expand our business activities worldwide, we need to ensure that we have the necessary human resource to man our key positions in the PIL Group of companies, both in Singapore and oversea. In this respect, we are now working with International Enterprise (IE) Singapore to embark on our Group HR capability and leadership development initiative. We will continue to provide a positive work environment for our colleagues to foster learning and development.

We have just celebrated our 50th Anniversary on 16 and 17 March 2017. I am glad to see the high spirit among colleagues of our worldwide network. We have also received strong support from our business associates, partners and bankers. I am confident that with your dedication and hardwork, we can take advantage of the improving trading environment to bring PIL to the next league.

Thank you for your support.

S. S. Teo
Managing Director