Shipping has proven to be as challenging as ever before. The present over-capacity environment has somewhat altered the delicate balance of the supply-demand relationship in the industry, therefore, unless a significant rectification on the ship-supply side is pursued or an unforeseeable world economic boom is attained, the industry can expect less than perfect outlook in the short run.
Hsin Chien Marine Co., Ltd. (HCM) had also encountered other internal challenge of our own. In 2001, we distraughtly lost our beloved Chairman, Mr. Lonny C.T. Chiu, who had led us since the founding of the Company. As we are approaching 3 decades of operation, new leadership is striving with utmost effort to not only continue but transcend beyond the past feats.

The major focus and business of HCM will continue to be providing very first class ship management to our fleet and our Charterer. Owing to the success of our experienced Marine department and Technical department, the HCM’s fleet has and will continue to grow. Our sizable fleet of around 20 bulk carriers ranges from Capesize, Panamax to Handymax and Small Handy. Long-term time charter contracts on most of our vessels provide a steady and secure base to expand our own chartering and operation business.

In addition to being very involved in the Taiwan tramp market, the HCM Chartering department is also actively operating a fleet of small handy vessels with dead weight ranging from 21,990 MT to 29,105 MT. We are further expanding our chartering network as well as building up our own operation fleet.

With entry into WTO and upcoming 2008 Olympics, China has the world’s focused attention. HCM is already positioned in China with a fully running shipping office in Shanghai. We expect to leverage this presence in the coming years to handle much of our shipping business, including chartering, directly from China.

It is a very challenging time but as the shipping environment is ever severe, we are ever motivated! Our invaluable partnership with renowned Nippon Steel Shipping Company is harvesting from years of alliance as HCM is strongly positioned to withstand any adversity. We are confident to break through the challenges on-hand and intend to follow our path of steady growth.

Under new leadership, HCM especially looks forward to your continuous kind support and yearn for any new opportunity to deepen our friendship.

Sincerely,

H. Chiu
Chairman
January 1, 2002