Eimskipafélag Íslands hf. - Company Announcement

Eimskip in cooperation with the port authorities in Qingdao

New joint venture for operation of a cold storage

Eimskip has signed a joint venture contract with the port authorities in the
city of Qingdao in China, regarding operation of a 55,000 ton cold storage. The
cold storage has been operated by A1988 hf., formerly known as HF.
Eimskipafélag Íslands, since 2007. 

According to the joint venture contract, Eimskip will become a 30% partner in a
new joint venture company where the port authorities will own 70%. Involvement
of the Qingdao port authorities is an important factor in strengthening the
operation of the cold storage since various changes are planned in the port's
environment that the operation will benefit from in the near future. The port
authorities have selected Eimskip as a partner to develop transport related
services to importers and exporters in reefer forwarding business which Eimskip
is specialized in. The joint venture company will lease the cold storage from
the port authorities in Qingdao. James Liu, the CEO of Eimskip in China, will
manage the operation of the cold storage along with Eimskip's other operations
in China. Eimskip's investment in this project amounts to EUR 700,000 in the
form of share capital in the new company. 

The cold storage in Qingdao is located at the city's container terminal which
is the seventh largest container port in the world with a turnover of about
15.5 million TEU per year. Approximately 80 employees will be working in the
new company and annual revenue at the outset is expected to be in the amount of
about EUR 4.5 million. 

Eimskip's operations in China are in four locations, in Qingdao, Dalian, Xiamen
and Shenzen, with a total of about 140 employees. The headquarters are located
in Qingdao, which is an area of seafood production, extensive export of fruit
and vegetables and import of meat. In November this year, Eimskip will
celebrate its ten year anniversary in Asia, but the company opened its first
office in China in 2004. Eimskip and the port authorities of Qingdao will at
the same time work on the strategy of the cooperation and further development
of reefer forwarding services in Qingdao. 

Annual transported volume in Eimskip's reefer forwarding services to and from
China is over 40,000 TEU and has been growing in recent years, especially in
the Intra Asian market. The cooperation with the port authorities in Qingdao is
a significant step to further developing the company's reefer forwarding
services in Asia. 

On 1 July 2014, the effective date of the Free Trade Agreement between Iceland
and China, Eimskip's new container vessel Lagarfoss will dock beside the cold
storage in Qingdao to load new reefer containers which will be transported to
Iceland and also Chinese goods under the new Free Trade Agreement. 

Gylfi Sigfússon, President and CEO

“After long discussions it is pleasant to reach an agreement with the port
authorities in Qingdao regarding future operation of the cold storage and it is
also a great recognition for Eimskip's development and achievement in Asia. The
agreement reinforces the operation of the cold storage and other operations of
Eimskip in China and in the entire Asia. Positive changes in the business
environment of the cold storage have also taken place recently, among other due
to storing of other products than seafood, such as meat, fruit and vegetables.
The operation fits well to Eimskip's strategy of strengthening its reefer
forwarding services, but the Qingdao port is the seventh largest container
terminal in the world and plays a major role in our reefer logistics services.
Qingdao has about 8.7 million inhabitants and the city itself is therefore a
large market for Eimskip.” 

About Eimskip

Eimskip runs a network of 51 offices in 19 countries and operates 16 vessels.
Total number of employees is around 1,400, of which about 800 are located in
Iceland. Approximately half of Eimskip's operating revenue comes from
operations outside Iceland. The company's vision is to provide outstanding
transportation services through a dependable transport system in the North
Atlantic, as well as offering an extensive worldwide network of reefer
logistics services.