Reynolds Announces $580-Million Upgrading For Sea-Land Service

R.J. Reynolds Industries, Inc., Winston-Salem, N.C., has announced a fleet modernization and globe-circling shipping program of approximately $580 million to strengthen the leadership position of its subsidiary, Sea-Land Service, Inc.

The two-year capital program calls for the construction of 12 energy-efficient, high-technology containerships to comprise the nucleus of a modern fleet circumnavigating the Northern Hemisphere (north of the equator).

The plan also includes expenditures for ship support equipment and upgrading shoreside facilities.

Port and manpower resources currently exist to support the new service.

The program was announced by J. Paul Sticht, president and chief executive officer of Reynolds Industries, following a meeting of the corporation's board of directors.

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* Mr. Sticht said: "This program enables Sea-Land to replace some of its older vessels which are uneconomical to operate because of their age, speed and relatively low container capacity.

"At the same time," he added, "this new weekly round-the-world service gives Sea-Land the capability to maintain existing business along profitable trade routes, while providing growth opportunities in both existing and new markets." The 12 containerships will have capacities of 838 forty-foot containers each, and will be powered by fuel-saving Sulzer diesel engines.

The new D-9-class vessels will have an overall length of 745 feet and service speeds of 22 knots.

They will fly the U.S. flag and be manned by U.S. crews.

When placed in operation beginning in 1980, the new containerships will be second only in size to Sea-Land's 1,096-container SL-7s.

The new vessels will strengthen the competitive and financial positions of Sea-Land, which already is the world's largest privately owned, nonsubsidized containership operator. Sea-Land serves 138 ports in 52 countries and territories.

Sea-Land's prominence in international shipping will be extended further with the inauguration of the new round-theworld service, concurrent with the introduction of the new ships.

Although Sea-Land now provides worldwide services through its extensive network of shipping routes, transfers of containerized cargoes from ship-to-ship are required to complete the global chain.

It is currently planned that the new ships will be assigned to routes taking each of them around the Northern Hemisphere. The vessels are totally compatible with principal major trade lane needs.

The program announced emphasizes a commitment by Reynolds Industries to continually assess the deployment of Sea- Land's fleet, and to take positive action to maximize profitability.

After an evaluation of the company's services last year, Sea- Land solicited bids from several shipyards for construction of the new containerships. These bids still are being evaluated. The contracts are to be awarded soon.

The bid solicitations followed a series of moves by Sea-Land to achieve better utilization of its equipment and to improve its return on assets.

This emphasis on market expansion enabled Sea-Land to establish itself as the largest containership line operating in the Middle East. Services to this market recently were enhanced with the introduction of four 595-containercapacity, diesel-powered vessels specifically designed for this area.

Mr. Sticht said the company will continue to assess Sea-Land's operations to insure that maximum returns are realized.

"We believe that this new modernization program, coupled with the new round-the-world containership service, will go a long way in helping us attain our goals," Mr. Sticht said.

R.J. Reynolds Industries, a diversified worldwide corporation, is the parent company of R.J.

Reynolds Tobacco Co.; Aminoil International, Inc. (energy) ; Sea- Land Service, Inc.; RJR Foods, Inc. (foods and beverages); and RJR Archer, Inc. (aluminum products and packaging) ; as well as R.J. Reynolds Tobacco International.

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