MD's Message - PIL - Pacific International Lines
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MD's Message

Dear all,

I would like to begin by wishing all a very happy, healthy and successful New Year.

PIL returned to profit in the first half of 2017 after a very challenging 2016. 

Riding on improved market conditions and operating efficiency, our turnover for the first half of 2017 increased 28% year-on-year to US$ 1.88 billion.

Our container shipping business posted a year-on-year increase in shipping volume and average freight rates of 11% and 10% respectively. This resulted in a 22% growth in the shipping business’ turnover. 

Our container manufacturing business, Singamas Container Holdings Limited, which is listed on the Hong Kong Stock Exchange since 1993, reported a 45% year-on-year increase in turnover contributed by higher sales of standard containers, which reached US$ 594.9 million in the first half of 2017.

PIL has successfully redeemed our S$ 300 million Notes in full on 17th July 2017 through a bridging loan and funds from our shareholders. 

The bridging loan made available by our well-esteemed financial institutions, is a testimony of their support and confidence in PIL. As a continuation to PIL's involvement in the bond market, PIL raised S$ 60 million on 16th November 2017 via a new bond issue that will mature in November 2020.

PIL invested in 12 new P-class vessels designed with LOA of 330m, beam of 48.2m, and draft of 16m, capable of navigating through the new Panama Canal and sailing under the Bayonne Bridge in New York. Each of these vessels has a capacity of 11,923 TEUs and can accommodate 1,400 units of refrigerated containers. They also feature an energy efficient design with an EEDI (Energy Efficiency Design Index) well below the required reference level, improving PIL's carbon footprint.

PIL received the first two P-class vessels in October last year and the delivery of remaining 10 vessels will be completed by March 2019. This will boost PIL's total fleet capacity over 500,000 TEUs and position PIL as the ninth-largest container shipping line in the world.

These highly efficient and versatile vessels are purpose-built for key trading regions in the Red Sea, the Middle East and North America. 

The focus of their deployment in 2018 will be in the Red Sea through a collaboration with the Ocean Alliance. The new service setup will feature two dedicated direct loops from the Far East to Red Sea, providing extensive coverage whilst delivering better system cost with the deployment of these neo-Panamax vessels. Our new service will further cement PIL's leadership in the Red Sea region.

PIL will continue to strengthen our presence in niche trades in Asia, the Middle East, Africa, South America and the Pacific Ocean region. We will continue to explore growth in the Transpacific trade despite being a minor player. 

As an independent operator that remains primarily ‘Alliance-neutral’, PIL can be a valuable partner for consortia offering services that will generate value for both our partners and ourselves.

We cherish our independence and close ties with many of the world’s major container lines. We shall continue to have this outlook for the foresee-able future.

In May 2017, we announced the signing of a cooperation framework agreement with the Nanning Municipal Government and the Guangxi Department of Commerce to develop the Singapore-Guangxi Integrated Logistics Park in Nanning City, Guangxi Zhuang Autonomous Region. 

In August 2017, PIL signed a memorandum of understanding with PSA International and IBM Singapore to explore and trial a proof of concept (POC) for Blockchain-based supply chain business network innovations.

PIL will explore opportunities in using new technology to enhance the way we do business and future-proof ourselves against any disruption. The successful launch of our Liner Management System (LMS) in May 2017 enhances PIL's digital readiness and provides the platform for PIL to embrace innovative technological advances.

In 2017, we welcomed PIL Côte d’Ivoire and PIL Shipping Co. (Taiwan) to our network of agencies. The establishment of these PIL-owned companies solidifies and strengthens our presence in Ivory Coast and Taiwan respectively.

Through PDL , we acquired Williams & Gosling which is one of the largest companies in Fiji. This acquisition extends our logistics capabilities in the South Pacific Islands.

The recovery in the current freight rate environment is welcome. However, oversupply continues to be a challenge for our industry. Overall, 2017 was a good year and I am cautiously optimistic about this year. PIL remains strongly committed to the shipping business and values our independence. 

I would also like to take the opportunity to thank all colleagues in PIL for their unwavering support and dedication to the company. It is due to the combined efforts of everyone that we have achieved the many important milestones in 2017; It is also my belief that our committed team will continue to elevate PIL to greater heights. 

 

With Best Regards,

S. S. Teo

Managing Director