Carnival inks MOU with China State Shipbuilding Corporation

Costa Serena will be fourth Carnival Corporation vessel to be homeported in China Costa Serena will be fourth Carnival Corporation vessel to be homeported in China

OCTOBER 15, 2014 — Carnival Corporation & plc (NYSE/LSE: CCL; NYSE: CUK) has signed a memorandum of understanding (MOU) with the China State Shipbuilding Corporation (CSSC) that could see the forming of a three-way shipbuilding arrangement involving Fincantieri of Italy.

The MOU also includes the exploration of other possible joint venture opportunities with CSSC including the potential to form a domestic cruise company, port development, talent development and training as well as supply chain and logistics.

The joint venture would support of the Chinese government's plans to grow the cruising industry in China and meet escalating demand for cruises from Chinese travelers. China is expected to be one of the largest cruise markets in the world with 4.5 million passengers by 2020.

As part of the possible shipbuilding joint venture, Carnival Corporation would work closely with CSSC and Fincantieri to help define the first-ever, world-class cruise ship built in China. Under the joint venture concept, Carnival Corporation says it "would provide its ship design and shipbuilding expertise to create the vision, definition and overall specifications for the China-built cruise ship."

"This is really a breakthrough day for all of us at Carnival, as well as our friends at the CSSC and all Chinese travelers who are increasingly turning to cruises for their vacation experiences," said Arnold Donald, CEO of Carnival Corporation. "This landmark agreement enables us to work closely with our partners at the CSSC to fully explore the possibility of forming a joint venture to further develop China into a leading cruise market, supporting local economic development and bringing vacation enjoyment to millions. We look forward to getting to work and lending the expertise of many talented people across Carnival Corporation."

Carnival says that in the past year, the Chinese Ministry of Transport (MOT) has expressed its strong desire to transform China into a leading global cruise market, including investments in infrastructure and developing a strong domestic cruise presence to help spur growth in cruising as a key component of the expanding tourism industry in China.

The MOT projects China to be the second largest global cruise market after the U.S. in the next several years based on economic growth, increased spending power of Chinese consumers and growing demand for cruise vacations in China. Partnerships like the relationship being fully explored between CSSC and Carnival support the MOT's pro-growth cruise policies designed to spur new economic development from tourism in China.

Carnival Corporation just recently announced its plans for immediate capacity growth in China in 2015 to meet growing demand. With Costa Cruises adding the Costa Serena to its fleet in China in April of next year, Carnival Corporation will be the first global cruise company with four ships homeported in China, growing the company's leading market presence by 140 percent from 2013 – 2015. Costa Serena joins Costa Atlantica, Costa Victoria and Sapphire Princess already homeported in China.

With its Costa and Princess brands homeporting ships in China, Carnival Corporation offers Chinese travelers two brands targeting two different segments of travelers.  In total, Carnival will have 220 port calls from five brands in China in 2014, which is 15 percent of the company's total port calls in all of Asia – a region where Carnival doubled its market share over the past two years.

Carnival Corporation recently announced that its Global Chief Operations Officer Alan Buckelew is relocating to China to oversee Carnival's growing operations in the country while retaining his overall global responsibilities for the corporation. This is the first move of its kind by a major publicly traded Global 500 corporation not headquartered in China.


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