CYL ready for change

ChoYang Line (CYL) is aggressively preparing for further business development.

This company has been restructuring since the end of 1997, with large-scale fleet reductions and conversions from its old financial system to a sound financial system. It is also structurally reforming its business.

CYL has tried to convert its fleet's operation into a vessel charter system, selling off unnecessary and out-of-date vessels as well as affiliated companies such as First Insurance, in order to drastically cut down its debt ratio. It also carried out streamlining its workforce to 400, eliminating 100 positions.

This company also might center on developing services for China instead of reducing slots in Atlantic routes, which have not been very profitable. The key trades, Intra-Asian trade, North American, and European trades will be updated through services associated with the United Alliance system and efficient fleet operation.

In the case of services for China, it plans to establish a total logistic service network combining the use of the Chinese railway system and sea transportation. This plan might be realized as Samik logistics, an affiliated company, has experience in using the Chinese railway system and CYL possesses sales networks in overseas branches.

CYL is operating over 20 vessels, including charters, even though it owns only 8 vessels, having sold 18 vessels between 1997 and 1999. In the course of attaining a 200 percent debt-to-equity ratio, selling off vessels and affiliated companies, such as First Insurance, gave CYL 750 billion won in cash to repay its bank loans. CYL has suffered in trying to obtain better liquidity, but is showing a healthy financial structure.