SINGAPORE - CMA CGM will prioritise on improving cost efficiency of Neptune Orient Lines (NOL) in order to turn the business of the Singapore shipping firm around.
This may entail selling some US$1 billion (S$1.35 billion) worth of assets such as vessels and containers, but CMA CGM will look to retain as many as of the NOL team as possible, vice chairman of the French group Rodolphe Saade told the Straits Times.
Mr Saade was in town on Tuesday (June 14) to meet with NOL's board of directors as CMA CGM continues its push to fully acquire the Singapore unit.
Business integration will start immediately, and CMA CGM is sending a team of ten here to oversee the process, including senior vice president Nicolas Sartini, who will head NOL, and chief financial officer Serge Corbel, Mr Saade said.
Meanwhile, all but "a handful" of NOL's senior figures will remain with the firm, Mr Saade added. NOL chief executive Ng Yat Chung will stay on as executive director and special advisor, and he is welcome to stay for "as long as he wishes".
But Mr Saade declined to confirm whether employee retrenchment will take place as part of the group's cost rationalisation move.
The high profile acquisition, which saw Temasek Holdings selling its majority stake in NOL to CMA CGM last December, came as NOL struggles to reverse its loss making business amid the cost competition pressuring the shipping industry.
Aside from improving cost efficiency, CMA CGM will also give NOL a global network and economy of scale that it did not have, Mr Saade said.
As integration proceeds and volume grows, it makes business sense for CMA CGM to make Singapore its hub for Asia Pacific, he added.
The group will move around one third of its traffic through the Kallang port in Malaysia to Singapore. The regional headquarters in Hong Kong will also be moved here.
CMA CGM currently owns 81.2 per cent stake in NOL, and has launched an offer of S$1.30 a share to acquire all remaining shares.
The offer price will not be raised, Mr Saade stressed.