LITTLE-NOTICED FRENCH LINE AIMS FOR BIG TIME

LITTLE-NOTICED FRENCH LINE AIMS FOR BIG TIME

The French are a strange race. They might play good football, and they certainly play adventurous rugby, but they fail to realize the importance of being linked to Britain by the Channel Tunnel. And they seldom understand that, right on their doorstep, they have one of the most enterprising of container shipping lines.

Sure, the French might be forgiven for taking another look at the Chunnel, particularly after former British Prime Minister Margaret Thatcher - our Maggie - hinted at a Conservative Party Conference last week that we, in Britain, would be better off without the rest of Europe.But on the shipping scene, the French should be proud. The national-flag operator, Compagnie Generale Maritime (CGM), only buckled because it cost too much to employ French crews on French-flagged ships. And nobody really knew where the Kerguellen Islands were, so the ''alternative flag state'' program didn't get the backing it should have.

On top of that, the idea of a national fleet didn't really gel with the Paris bureaucrats, who had to answer to their own shareholders on expenditures.

But France has within its shores a professional shipping business. It does not actually own one ship; it charters nearly all its global fleet. It is run by a Lebanese family, and even if that puts the blocks on a few trade lanes, it matters little.

But anyone who argues that Compagnie Maritime d'Affretement (CMA) - or to give its new and rightful monicker, CMA-CGM SA - is anything short of a globally focused enterprise knows little of the box-transportation business.

CMA-CGM SA - the merger of CMA and CGM that just received the official stamp of approval from shareholders - has ambitions to move from its 12th-place global slot into the coveted top 10. It will do that courtesy of a new capacity injection of some 50,000 TEUs.

CMA-CGM SA executives are out in the field, putting the final touches on a prospective ship-building program: nearly $500 million on eight new, 6,100-TEUs vessels. It will be the biggest deal ever put together by a French container-shipping line.

If the Marseilles-headquartered company cannot convince the banks to lend part of the outlay, then there are other alternatives on the table.

Much of the original fleet of CMA was, and remains, chartered from companies that have built ships through the German KG tax-incentive system. That legendary system allows those with money to invest in the most volatile industry in the world, and hope their accountants understand how to write off the proceeds against tax demands at the end of the financial year.

CMA-CGM SA wants the new ships for its French Asia Line, which runs between Asia and Northern Europe. On that service, they will replace 4,000-TEU vessels that will switch across to the Asia/Mediterranean service that CMA-CGM SA operates with Norasia. So the capacity increase on the Asia/Northern Europe trades amounts to around one-third.

Next year, CMA-CGM SA will start a new service between Asia and the U.S. East Coast via the Panama Canal. It wants a partner, so anyone else who is interested, apart from China Shipping Group, should give Marseilles a call.

That new service - together with the recently-introduced North China/Japan service linking the U.S. West Coast with Asia and Northern Europe; the French Asia Line; the Asia/Mediterranean service; and a slot allocation on the Mediterranean/U.S. East Coast service of Maersk/Sea-Land - makes for a global business.

CMA-CGM hopes to see an increase of 57 percent in 1999 profit over what it logged in 1998. It expects to net more than $50 million this year. Not many shipping lines in this business can hope for that. Volume will be up from 1.14 million TEUs to 1.35 million TEUs.

Little notice has been taken of this shipping company that is easing its way into the premier division.

Much of the press coverage has focused on the protracted family feud between CMA's ex-chairman, Jacques Saade, and his brother Johnny Saade, who legally questioned the shareholding and financial attributes of the merger with CGM. The feud helped delay the merger.

But beneath the problems of court procedures (and who more than the French know how to handle those?), there is a company intent on having a major presence on the global scene.

Jacques Saade doesn't hold the top slot now. Tristan Vieljeux holds that position. But son Rodolphe Saade has the operational reins, and daughter Tanya is a hard nut to crack in the press and advertising department.

There are no mergers or buyouts about to happen. There's no concern that Maersk and Sea-Land are three times bigger than the rest of the field. There's not even concern that P&O Nedlloyd could merge with NOL-APL.

CMA-CGM SA has its own business to run, and it looks like it's running it quite well, thank you.