Japanese shipping company Kawasaki Kisen Kaisha (K Line) has secured a long-term contract to transport steaming coal for Tenaga Nasional Berhad (TNB), the largest electric utility company in Malaysia.
Namely, K Line has established a joint venture company owning Malaysian-flag panamax vessel with Halim Mazmin Group (HMG) in order to participate in a tender for long-term contract with TNB Fuel Services Sdn Bhd (TNBF), a subsidiary of TNB which supplies coal and fuel to the TNB Generation.
A subsidiary company of HMG has signed one long-term consecutive voyage charter contract with TNBF, within a tender that involved signing of five long-term contracts with four Malaysian shipping companies.
Under the terms of the contract, the co-owned panamax vessel will transport 1.5 million ton of steaming coal per year from Indonesia or South Africa or Australia to Malaysia consecutively for 10 years from September of 2016.
The past year and the beginning of this calendar year have been pretty challenging for the Japanese carrier.
Very low freight rates in container ships and dry bulk have prompted K Line to lower its earnings for the fiscal year ending 31 March, 2016.
In addition, K-Line has reduced its ordinary profit target for the fiscal year ending 31 March, 2020 by 47% to JPY45 billion compared to its plans set a year ago.