to focus on its oil storage and shipyard business, and scale down its trading and supply activities.

With crude oil at more than $140 a barrel and still rising, the company said the trading business is capital intensive and increasingly exposed to market risks and market volatility.

The company said it “will consider suitable opportunities to sell the business to third parties”, and focus on its bunkering businesses in Singapore, Malaysia, Hong Kong and China.

As part of this exercise, Titan plans to reduce staff size in Singapore and Hong Kong from 205 to 149. The restructuring and the cost-reducing measures would result in a one-time cost of around US$1 million to US$1.5 million, but yield annual cost savings of US$2.8 to 3.3 million.

It expects to improve its balance sheet considerably, with the elimination of about US$140 million in trading-related debt and banking facilities and improvement to cash flow by about US$50 million as a result.

Titan said it will continue to invest in its shipyard and storage businesses. Wholly-owned subsidiary Titan Quanzhou Shipyard is expected to deliver 10 new built vessels this financial year. The construction of its ship repair yard (which is designed to have ship repair capacity of 240 ships per year after completion) is progressing rapidly.

Titan expects to build up to 1.2 million cubic meters of oil and chemical storage capacity in China by end-2008. This will include 180,000 cubic meters of fuel oil storage and 125,300 cubic meters of chemical storage amounting to a total 305,300 cubic meters of new capacity at Nansha Terminal Phase II due for completion this year, and 420,000 cubic meters of fuel oil storage capacity at Yangshan Terminal Phase I planned to be ready for operations by the third quarter.

Nansha Terminal Phase I has been designated by the Shanghai Futures Exchange in March 2008 as a physical delivery storage facility for the settlement of its fuel oil contracts. In May 2008, the Platts energy media group announced that it has included in its free on board (FOB) Singapore fuel oil price assessment process deliveries made from Titan Chios, one of the group’s floating storage units.

Titan has also been actively supporting efforts to establish the Hong Kong Mercantile Exchange (HKMEx) to provide delivery support of fuel oil contracts through its bonded storage facilities in China. The establishment of HKMEx is subject to the approval of the Securities and Futures Commission.

Titan believes that the partnership and alliances with the various exchanges will greatly facilitate its storage and related oil services businesses, and will continue to explore opportunities for complementary ventures in Asia.