South Korea’s Samra Midas (SM) Group vowed to make its fledgling container shipping unit created based on surviving assets of now-defunct Hanjin Shipping as half big as the country’s main sea flag carrier Hyundai Merchant Marine.
Woo Oh-hyun, chairman of SM Group, said in his interview with Maeil Business Newspaper on Monday that the group will make SM Shipping worth 1 trillion won ($888.6 million) in assets this year and more than 2 trillion won worth next year.
He plans to merge SM Shipping, Daehan Shipping, and Woobang Engineering & Construction next month to accelerate the growth of the shipper by injecting the profits earned from housing construction into the cargo carrier.
“Chinese and Japanese shippers are vying to make their container business bigger by joining forces. We could beat Japanese rivals if Korean companies leave 20 percent additional cargoes with Korean carriers,” Woo said.
Woobang Engineering & Construction has been drawing steady income from new apartment sales that its profit rate for last year reached 7.7 percent after registering an operating profit of 20.7 billion won on sales of 267.6 billion won. When it is combined with two other units under SM Group, SM Shipping’s assets would stretch to 1.2 trillion won from 90 billion.
The group hopes to ramp up the shipper’s cargo capacity to 200,000 twenty-foot equivalent (TEU) next year from current 50,000-TEU and extend its trip from the western coast to the eastern coast of the U.S. and South America, said Woo.