A new old oligopoly
The most important container production centres shifted from South Korea to China as long ago as the 1990s. The sale by Maersk of the reefer specialist MCI to CIMC is nevertheless likely to be a cherry on the cake for the Chinese corporation.
Even the appetite of the Danes has its limits – as was witnessed on 27 September this year, when AP Moller-Maersk divested itself of its subsidiary Maersk Container Industry (MCI) with a stroke of the pen. MCI, a unit that was spun off in 1991, was based on the resourcefulness of the technical manager of the Odense Steel Shipyard, Niels Peter Raun.
Quality assurance, security of supply and autonomy in container procurement are now apparently no longer decisive arguments for Maersk to retain ownership of the unit, which specialises exclusively in the production of reefer containers today. It is domiciled in both Denmark and Asia.
AP Moller-Maersk’s CEO for fleet and strategic brands, Henriette Hallberg Thygesen, commented coolly that “this divestment of MCI is part of AP Moller-Maersk’s business transformation strategy. The focus thereof lies on operating as an integrated container transport and logistics services company that creates customer value along the entire length of the supply chain.” The concentration process in the group is thus continuing.
A win-win calculation
The timing of the sale is well chosen. Demand is right, especially in these challenging times, for reefer containers in particular as well as for boxes in general, so that the price Maersk has been able to negotiate – USD 987.3 million cash, no share swaps – should be just right for the corporation.
The total sum of this investment has been stumped up by a Chinese global corporation – no surprises there then. It was China International Marine Containers (CIMC) that sat across from AP Moller-Maersk at the negotiating table on 27 September. It is headquartered in Shenzhen, was founded in 1980, is listed on the stock exchange and is allied with Cosco, as well as the logistics services provider CMHI. The transaction, which is still subject to regulatory approval, is expected to be completed in 2022.
Taicang CIMC Reefer Logistics Equipment (TCRC), a CIMC Group subsidiary established in 1995, will take over the entire MCI organisation and all of its assets. These include a reefer factory in Qingdao and a valuable research, development and testing technology facility in Tinglev (Denmark). Thus TCRC has now become the largest container manufacturer worldwide in the reefer segment too.
TCRC’s only (minor) rivals in the box production sector are the smaller players Dong Fang International Containers and the CXIC Group, both of which also hail from China.