Malaysia's MISC Berhad exits liner business
Monday, 06 February 2012 | 00:00
The joint venture between MISC Berhad and Crescent Shipping Agency in India will cease to exist, with the Malaysian shipping line exiting from the liner business (container shipping).
MISC Berhad, part of Petronas, recently announced that by June 2012 it would exit the liner business via cessation of the said business.
Industry sources said that every month the Malaysian line in India handled around 10,000 twenty-foot equivalent units from different ports.
However, in the last few days, it did not take any booking from customers.
MISC's India operations consist of two segments — liner and crewing operations. The former is operated by MISA Agencies India Private Ltd (MISAI), which is 60 per cent owned by its subsidiary, MISC Agencies Sdn Bhd (MISAI), while the crewing operation is handled by MISC together with the fully owned subsidiary, AET.
The exit from the liner business will only affect MISAI and not the crewing operations in India, said Mr Fiona Clare Pereira, General Manager, Group Corporate Affairs of MISC Berhad.
MISAI and the MISC/AET ship crewing operations have approximately 100 employees in total. As this joint venture was incorporated to support the liner activities for MISC, hence, the exit of the principal would also entail the closure of the joint venture, he told Business Line recently.
MISC is represented in India (nine locations) by Crescent Shipping, which is a part of the Transworld Group of Companies and incorporated in 1992 to serve MISC Berhad exclusively.
Subsequently, MISC Berhad opened its own shipping agency in India as a joint venture with Crescent Shipping.
The line's Indian unit handled agency responsibilities at Mumbai, New Delhi and Chennai, with Crescent covering Ahmedabad, Bangalore, Kochi, Hyderabad, Jaipur, Kandla, Kolkata, Ludhiana and Tuticorin.
With a total fleet strength of around 100 ships, MISC has three business units — liners, petroleum and chemicals and dry bulk.
The liner division offered weekly services to and from the Far East, South East Asia, Arabian Gulf, Red Sea, Australia, New Zealand, South Africa, Mediterranean, United Kingdom and North Continent.
The company said the radical change in the operating dynamics of the liner industry, which is driven by high operating cost and rapid changes in global trade patterns, is challenging the validity of today's operating models.
The company's decision was also hastened by the present difficult operating conditions which saw the liner business suffering a total financial loss of $789 million over the past three years, impacting the overall financial performance of MISC.
The cessation of the liner business will inevitably result in a retrenchment of employees.
MISC will extend to the affected employees a reasonable severance package, which will be guided by the relevant requirements in the various jurisdictions. The company will endeavour to provide additional support to assist the affected employees in managing the change.
Source: The Hindu