Zim & Israel Corp. in a $732m. fleet expansion program

Israel Corporation and its daughter company Zim Integrated Shipping Services Ltd. outlined last Sunday the business model for the acquisition of 12 container vessels in a $732 million deal.
 
In a breakdown of the proposed fleet expansion, eight container vessels carrying TEU 4,250 have been purchased, and are currently under construction in China for delivery between March 2006 and January / February 2008.
 
Two of the container ships will be wholly owned by Zim, while four will be equally owned by Zim and the Ofer group. The additional two vessels have been leased from London-based Zodiac Maritime (an Ofer group subsidiary) for a period of 10 years. Cost of leasing a ship totals $23,000 per day. As part of its fleet expansion, Zim has also acquired four larger post-Panamax vessels to be used on its Europe Asia routes. The four, with a capacity of TEU 6,350 are being build in Japan, and will be delivered to the company between the first half of 2008 and first half of 2009. Of the four TEU 6,350 ships, two are wholly owned by Zim, and the other two will be leased from Zodiac, under a 10-year lease, at a cost of $31,000 per day.
 
Zim’s CEO Mr. Yoram Sebba told the press that "There is, at present, a huge demand for container vessels globally that has not been encountered in the last few decades. Today, production facilities are moving from North America & Europe to Asia in record numbers, requiring every maritime cargo company to expand its fleets or lose market share".
 
He added that " in 2000 Zim was rated 9th among the world shipping leaders. The company has since gone down and is now rated 13th . If the fleet is not expanded Zim will end up at the 18th place in 2006".