Maersk Container Industry: The slump is over

Maersk Container Industry is hopeful again in light of a 2013 that otherwise looks like one of the less positive years in the container manufacturer's history.

It looks like there might be light at the end of the tunnel for Maersk Container Industry (MCI). Following the less-than-stellar first six months of 2013, the Danish container manufacturer is hopeful in terms of opportunities in the future market. Growing market shares and new successful container technologies will pave the way to success.

"After a nine month slump it looks like things have turned around again, and we've started to receive new orders. But this actually fits quite well with our predictions last year, and we can now look positively toward the future," says Søren Leth Johannesen, CCO of Maersk Container Industry.

2013 was not the best year for MCI, which finished the 2nd quarter 2013 with a modest profit of USD 1 million, down from USD 14 million in the same period 2012.

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Two clear focus areas

According to Søren Leth Johannesen, two factors will provide MCI with advantages on the future market.

The first one is MCI's Supotec isolating foam, which is used in reefer containers. The manufacturer has been at the forefront of developments here and MCI is the first company to produce reefer containers that comply with the latest environmental requirements from the EU. These efforts are now paying off in orders.

"We invested in the environment early on, an investment that we've actually experienced as a loss. But now that the EU is gearing up to enforcing its environmental legislation, our Supotec marks a clear advantage. That's also made clear by the customer feedback we're getting," says Søren Leth Johannesen.

MCI provides fruit with a 45 day period of dormancy

The other focus area concerns market shares, and the market that lies beyond the orders the company has secured from Maersk Line in recent years. When the sister company stopped ordering new reefer containers in 2012, MCI continued to secure new third party customers, and MCI is currently present in the three major alliances, as well as the key market for leasing companies.

"We've conquered quite a few market shares, especially in the reefer segment. In recent years, our market share with third party customers - meaning outside of Maersk Line - has grown to around 16 percent for our Star Cool reefer. This is important, as we're the only ones in the market who delivers fully integrated reefer systems, and it thus makes sense for customers to buy the complete setup from us," says Søren Leth Johannesen.

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Wants to grow 5-6 percent

A report by independent analysts Harrison Consulting predicts that the container market will grow 8-9 percent during the next year, while Drewry predicts a growth of 5-6 percent.

Due to a principle of certainty, Søren Leth Johannesen has more faith in the numbers from Drewry in terms of predicting the growth in business for Maersk Container Industry:

"Most but not all indicators point to an improvement. We've often talked about how the market for reefer containers is slump-resistant, simply put because people want their bananas and avocados in the supermarkets even in a time of crisis. So we believe in a growth of around 5 percent, even though there'll be bumps along the way. That's the way it's always been. In 2010, for instance, we reached the limit for maximum production capacity. And that was just three years ago," says Søren Leth Johannesen.

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The demand for reefer containers is predicted to grow as new parts of the world emerge as potential markets for, for instance, South American fruits. In its new containers, Maersk Container Industry can transport refrigerated bananas for as long as 45 days, which is 20 days longer than was previously possible. This means that it is now possible to transport bananas from Ecuador to Baku, Azerbaijan.

In May 2014, MCI expects to open its new container factory in Chile, which in 2-3 years will start to send 40,000 new containers out into the market every year. Along with its facilities in China, Maersk Container Industry will soon be able to produce 80,000 new containers a year, and the company will thus become a bigger player on the global market.

According to Harrison Consulting, the price for a 40-foot so-called High Cube Reefer has increased over the past three years, from USD 16,292 in 2010 to USD 17,742 in 2011, and the price was most recently quoted at USD 17,792.

Dynamar: Reefer shrinks to 60 percent in 2020

Empty containers cost Maersk Line USD 1 billion a year 

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