China's leading shipping company and electricity producer join hands

China Ocean Shipping (Group) Company (COSCO), the nation's largest shipping company, has entered into a strategic partnership with Huaneng Power Group, the top Chinese electricity producer, to become Huaneng's long-term carrier.

The move came as Chinese companies are seeking to secure material supplies and goods transportation amid tight demand for shipping, and "the marriage between Huaneng and COSCO will help each grow stronger in its respective sector," said Li Xiaopeng, general manager of Huaneng, quoted by Friday's China Daily.

The partnership is similar to the contracts that COSCO signed with Baosteel, Sinopec and Haier in March, June and this month respectively, the paper said.

According to the framework agreement signed between COSCO and Huaneng Thursday, the shipping company will offer quality and price-competitive transport and logistics services to the power producer on a long-term, international basis.

In return, Huaneng will appoint COSCO as its major marine carrier of coal and other raw materials.

Huaneng plans to build 12,200 megawatts of installed capacity from 2004 through 2008 to increase capacity by at least two-thirds to meet power shortages triggered by the nation's blistering economy and fixed-asset investment, the paper said.

"The partnership framework offers a good basis for future cooperation," COSCO President Wei Jiafu was cited as saying.

"We will enter into specific cooperative projects in the spirit of the partnership," he added.

Apart from transportation services, the two industrial leaders also promised to team up to explore other sectors.