Dole Food Co. signed a contract Tuesday with the Korean shipbuilder Hyundai Mipo Dockyard to build three new refrigerated containerships at a cost of $165 million.
The ships will each have a capacity of 770 FEUs (40-foot-equivalent units) and will be used in the company's U.S. West Coast operations. Self-geared and equipped with gantry cranes, they will be delivered in late 2015 and early 2016 and replace smaller ships that have a capacity of 491 FEUs.
“Updating our West Coast shipping capabilities is very important strategically to the company’s competitive differentiation and future growth prospects,” said C. Michael Carter, Dole’s president and chief operating officer, in a statement. “These ships will be 27 years old at the time of replacement. The new ships will be more fuel efficient and will be built to Dole’s exacting specifications and design."
When Dole first said in May that it was going to build the ships, it also announced the indefinite suspension of the previously announced share repurchase program for up to $200 million on its outstanding common stock.
“At this time we have decided to use our existing funding resources to take advantage of this opportune window in the shipping industry, when these specialty ships can be built at very competitive costs,” Carter said. - Chris Dupin