The company also said it expected to see its revenue rise by 50 per cent this year.

Managing director ML Chandchutha Chandratat said the shipping business still had high potential to grow, particularly in China, India and the Middle East.

Given that growth potential, the company is planning to establish a subsidiary in Singapore, where it will benefit from the waiver of corporate income tax and withholding tax as well as financial facilities and staff training.

"The establishment of the new company in Singapore is part of a one-to-two-year plan," Chandchutha said. "This is aimed at boosting the company's efficiency, while the privileges that we will get there will benefit our shareholders."

He added that the Singapore government pays much attention to shipping development and is currently Asia's shipping centre. Most European shipping companies have shifted their business to Singapore, with the condition that they have to register in Singapore in order to create jobs in the country.

He said the company's ships receive fuel and maintenance in Singapore.

However, the establishment of a subsidiary in Singapore will not affect the company's listing status in Thailand. It will be similar to the company's subsidiary in the United Arab Emirates and a joint venture in Vietnam, while the headquarters is still in Thailand as a holding company.

"Currently, the company has regular shipping routes between China, Southeast Asia and the Middle East, all areas where there is a huge demand for steel, wood and pulp in line with economic growth. In the future, China will be the leading exporter of the world," Chandchutha said.

He said the freight rate for middle-sized ships this year is expected to be US$19,000 (Bt725,000) per day, up from last year's $17,000. Brokers do not expect freight rates to decline over the next two years.

Thus, the company expects revenue this year to grow by 50 per cent, which is the same rate as last year. Last year the company made a net profit of Bt6 billion from Bt15 billion in revenue.

The demand for shipping this year is growing 5-6 per cent, Chandchutha said. The company has expanded its fleet by 7 per cent to its current 46 ships.

He said the key to the highly competitive shipping business is "income balancing" and the development of added value.

He said the company's subsidiary, Mermaid Maritime Co Ltd, an oil-drilling ship operator, is in demand, as natural gas production has been on the rise.

Siriporn Chanjindamanee

The Nation