Introduction
Florens Container Holdings Limited, a wholly owned subsidiary of COSCO Pacific, and its subsidiaries (collectively referred to as “Florens”), operates container leasing and management business for the Group. Florens is the second largest container leasing company in the world with 1.52 million TEUs fleet size as at the end of 2007 and maintains a high utilization rate that is above market average.

Florens provides comprehensive long-term and short-term container leasing services to more than 200 customers throughout the world, among which COSCO Container Lines Company Limited (“COSCON”) is the largest customer. As at the end of 2007, the total number of containers being leased to COSCON was 517,000 TEUs while 240,000 TEUs of containers were being leased to other international customers, which accounted for 34% and 16% of our total fleet respectively.

While continuing to focus on long-term leases, Florens is also aiming to expand market share by striking an optimum balance between ownership and management of its container boxes based on an “asset light” business model.

In June 2006, Florens completed the sale of 600,082 TEUs of containers together with container leasing agreements covering those containers. Upon transferring ownership of the containers to the buyer, Florens retained a managerial role under an administrative services agreement.

The “sale and manage back” of containers is becoming a regular business practice as Florens continues to move its strategic focus from container leasing to container leasing and management. In 2007, we made another “sale and manage back” transaction of 130,000 TEUs of containers.

By this strategic disposal of containers, we provide our container leasing business with a more flexible capital structure and lower operational risk, so as to expand our market share and maintain our leading position in the industry with an “asset light model”.

Florens' website: www.florens.com