SinoShip Spring Issue 2012
SinoShip's debut issue sees its network of 12 correspondents fan out wide across Greater China to provide unique insights into how shipping will fare in the Year of the Dragon.
Sohmen on China Exclusive ship repair data Shanghai Shipping Exchange Spring 2012 www.sinoship.org Launch Issue SITC's Yang Xianxiang What's next for the largest private line in the PRC Simon Liang: niche shipbuilder Sino-Greek finance SInoShIp SpRInG 2012 I ABS ADVERT ConTEnTS regulars 3 4 7 8 11 13 14 16 17 19 21 22 23 Editor's Comment Economy Lines Yards Offshore Finance Commodities Logistics Cruise Yang Xianxiang Simon Liang Zhang Ye Dr Helmut Sohmen A number of non-Chinese owners will be shut out of the game. -- BW Group's Helmut Sohmen 23 22 We will make shipping freight derivatives be one of the tools that the shipping industry can use to circumvent freight risks. -- Zhang Ye , Shanghai Shipping Exchange profiles Container shipping is a global business with no shelter. -- SITC's Yang Xianxiang 19 Features 24 Ship Repair 26 Breakbulk 29 Singapore in China Hubs 21 We are not chasing large scale business blindly. -- Simon Liang, Sinopacific The safety culture has room for improvement in China, but that is coming. -- Rajaish Bajpaee, Bernhard Schulte 32 Shanghai 33 Taipei 35 Hong Kong reviews 25 36 Books Opinions 35 Shipping doesn't appear on people's consciousness. -- Arthur Bowring, HKSOA 37 Bei Hong 38 Li Deng Bai 39 Manish Singh The happiness from earning a lot of money is fleeting because of the pain you feel when you lose it. -- Evergreen's Chang Yung-fa 33 1 SInoShIp SpRInG 2012 Up FRonT www.sinoship.org An ASM publication EDITORIAL DIRECTOR Sam Chambers firstname.lastname@example.org CHIEF CORRESPONDENT Katherine Si email@example.com CORRESPONDENT Jason Jiang firstname.lastname@example.org BEIJING Li Deng Bai SHANGHAI Paul French HONG KONG Alfred Romann DALIAN Mark Downing TAIPEI Joshua Samuel Brown CONTRIBUTORS Li Dong, Bei Hong, Manish Singh PHOTOGRAPHERS Andr� Eichman, Basil Pao All editorial material should be sent to email@example.com or mailed to Office 701, 9 Renmin Lu, Zhongshan District, Dalian, China 116001 COMMERCIAL DIRECTOR Grant Rowles firstname.lastname@example.org CHINA SALES DIRECTOR Tom Wu email@example.com SinoShip advertising agents are also based in Japan, Korean and Scandinavia -- to contact a local agent please email firstname.lastname@example.org for details. MEDIA KITS ARE AvAILABLE FOR DOwNLOAD AT: Developing the perfect vehicle for Chinese shipping EvEry yEar I would guess I receive at least 20-plus inquiries from shipping companies and PR firms asking me for the leading shipping related newspapers and magazines in China. As East Asia Editor for Lloyd's List and Seatrade for the past 11 years I have been in a position to furnish people with the information they needed but have always felt there has never been the ideal vehicle for reporting the China shipping scene. SinoShip has been in incubation for three years now and is now being rolled out this year. We are creating a hub for all things China maritime -- whether it be hard copy, online, data or niche events. Our network of correspondents in Dalian, Beijing, Shanghai, Hong Kong and Taipei is unmatched in the maritime media world and we should have someone in place in Guangzhou by issue two. SinoShip's unique business model ensures it'll be the perfect vehicle for outward-bound promotion by Chinese firms as well as inward bound marketing for international firms. All members of the China Shipowners' Association and the China National Association of Shipbuilding Industry (CANSI) will receive our dual language publication free of charge. Indeed, any PRC firm will be able to receive this publication free -- and we have databases that are unmatched in the maritime media world when it comes to China. Similarly ordinary members of the Hong Kong Shipowners Association and owners in Taiwan are reading this publication free of charge. Issue one is also distributed at top events in Hong Kong, Shanghai, Nanjing and Singapore. Overseas firms, sorry, but you have to subscribe, albeit for a small amount. As well as its breadth -- both geographical and sectoral -- what sets SinoShip apart from other publications is its widespread points of view. Chinese media tends to www.sinoship.org All commercial material should be sent to email@example.com or mailed to Asia Shipping Media, 83 Lorong N Telok Kurau #02-05, Singapore 425 265 DESIGN Lamma Studio Design PRINTERS Allion Printing, Hong Kong Any shipping-related company headquartered in the People's Republic of China can receive SinoShip magazine for free. For all other companies a US$100 subscription is charged for 2012's four issues of SinoShip. Subscriptions to SinoShip e-News, a twice monthly PDF newsletter packed with exclusive news, data and analysis costs US$500. Email firstname.lastname@example.org for subscription enquiries. SUBSCRIPTIONS overegg achievements, while international publications looking into China are often too far removed to be perceptive. We aim to straddle our reportage, applauding where it is deserved, while also pointing out weaknesses and pitfalls in China's challenging maritime university -- see our interview with BW's Helmut Sohmen on page 23 for a good example of a contrary opinion. All in all, I am very excited about this project and the reaction from key people in the industry thus far has been very encouraging indeed. I look forward to hearing your comments on our media product and urge you to follow us at LinkedIn (SinoShip China Shipping Network is our group) while our news service -- www.sinoshipnews.com -- is launching shortly. Copyright � Asia Shipping Media Pte Ltd (ASM), 2012 Although every effort has been made to ensure that the information contained in this review is correct, the publishers accept no liability for any inaccuracies or omissions that may occur. All rights reserved. No part of the publication may be reproduced, stored in retrieval systems or transmitted in any form or by any means without prior written permission of the copyright owner. For reprints of specific articles contact email@example.com. Twitter: @sinoship Linked In: SinoShip China Shipping Network Sam Chambers Editor firstname.lastname@example.org SInoShIp SpRInG 2012 3 EConomy Core blimey Products such as Apple continue to report record sales in China -- and record queues in Beijing, pictured Shanghai correspondent Paul French rebuts many of the doomsayers to paint a refreshingly robust report on the state of the Chinese economy ThE nEw yEar began with a staggering number of `the end is nigh' articles on China in the western media. Mostly they all seemed to argue the same thing -- the US/EU slowdown will eventually reach China leading to slower growth; urban property markets will collapse; inflation is rampant; there's too much local government debt; consumer spending will slow. So perhaps the best way to deal with these issues is one-by-one. no major economic policy shifts during the year. In control Inflation was always mostly a food issue anyway and deflation continued in many non-food sectors throughout the year. It's expected the CPI will average 3.5�4% for the year, down from over 5% last year. Debt Without doubt there is local government debt in China. However, it is underwritten by the central government and the Big 4 state banks (and so ultimately guaranteed by the Communist Party). The bulk of the debt has been accumulated through infrastructure spending that has allowed for greater economic development. This is reflected in lower provincial unemployment rates and higher levels of tax collection -- fiscal revenue collected directly by local governments rose strongly last year, up 29% following a 25% increase in 2010. Money spent leads to money earned. Property Contrary to many analysts opinions, property is not in such a bad state in China. Importantly, Beijing has many control levers to pull and so will probably ease lending restrictions later this year to re-kick-start the market and avoid any crash. As sales pick up in the second half of the year so too will construction. Property prices may fall over the year -- 5�10% probably -- but not enough to scare the Chinese away from their love of home ownership. in tier 2 and 3. Low household debt (no credit card overhang!), bullish consumers, high employment rates and continuing wage rises should ensure continued good sales though competition between retailers and brands is at an all time high. It's a broad based consumer story too -- shampoo, toothpaste and noodles as well as Apple iPods, Maseratis and plastic surgery. Emergence of the squeezed middle So are there any problems on the horizon? Well, the truth is that China has moved out of its 30-year-long demographic `sweet spot'. Those useful internal migrants who provided cheap factory workforces and service sector workers are no longer so plentiful -- the cost of manufacturing as well as the cost of maids, taxi drivers and waitresses will rise. It's the emerging middle class who'll feel this rising cost of living most keenly and they may feel less well off than when demographics and urbanisation effectively subsidised their lifestyle. The emergence of a `squeezed middle' in China, joining those in Europe, America and Japan, may prove to be an interesting phenomenon in 2012. Growth GDP growth will be slower this year at around 8.5%. However, Beijing is comfortable with that. Those that complain that this is too slow should remember that they were probably the same people shouting `overheating' when growth exceeded 10% per annum. Slower export growth will lead to a modest fiscal stimulus and slower appreciation of the RMB, but not devaluation. 2012 is a year of political change in China -- at least among the leadership -- and this will mean 4 www.SInoShIp.oRG Money spent leads to money earned Inflation The inflation bogeyman has gone away now the influential and previously troubled pork market has sorted itself out. Consumption China remains the world's best consumer story by a long, long way. Though sales may be slower in year-on-year terms in tier 1 cities like Beijing and Shanghai (still at +16%y-o-y) as they steadily, and predictably, mature they are powering on The leading specialist in international transport finance www.dvbbank.com Frankfurt/Main � Hamburg � London � Cardiff � Rotterdam � Bergen Oslo � Piraeus � Zurich � Singapore � Tokyo � New York � Cura�ao LInES Logistics. Hyundai Merchant Marine (HMM) of South Korea asked a federal judge in Alabama to freeze the embattled Asian operator's assets while it sorts out payment disputes before an arbitration panel in London. While it is believed that more than a dozen creditors are going after Grand China, the lawsuit shed light on six disputes involving Golden Ocean, Tumac, Oldendorff and Norden. The boss of Grand China's parent HNA Group has promised to pump more money to its struggling subsidiary. on vessel orders at very competitive prices." hand prices could still drop by 20%, which will offer good purchase opportunities. Hong Kong's OOCL put pen to paper on the largest port deal in US history. The Tung family-controlled containerline signed a $4.6bn deal for a 40-year lease on 300 acres at the Middle Harbour at the Port of Long Beach. Pooling debut Cosco Shipping initiated what it claimed was the first pool model among Chinese shipping companies in mid-February. It signed with Guangzhou Salvage Bureau of the Chinese Ministry of Transport (GSBMT) to manage GSBMT's 30,000 dwt semi-submersible newbuild, Hua Hai Long. Cosco Shipping's semi-sub pool now numbers five vessels. Han Guo Min, ceo of Cosco Shipping, said: "As the semisubmersible market changes, further cooperation and pooling arrangements will be a general trend." China Merchants Energy Shipping (CMES) is gearing up to order 10 VLCCs, having recently announced a private share placement worth $460m. CMES will tap overseas banks for the remaining cash, the company said. At present CMES' fleet stands at 4.72m dwt, including 13 VLCCs, a suezmax and seven aframaxes. The eventual business plan calls for a total of 30 VLCCs. China Shipping Development (CSD) will separate its wet and dry bulk divisions to "streamline its internal management system and improve operational efficiency". CSD owns more than 90 ships. The new dry bulk company will be called China Shipping Bulk Carrier, a wholly owned subsidiary based in Nansha, Guangzhou. Cosco consolidated its dry bulk division into single ownership after massive losses. CSD has yet to details its plans for the tanker business. Separately China Shipping and Cosco scotched rumours of merging their container divisions together, saying they will have more slot sharing and joint routes but no merger. Court cases continued to ramp up against Grand China Taiwan's U-Ming Marine Transport placed a rare order for capesizes in China in February, signing for four firm 186,300 dwt bulkers at Shanghai Waigaoqiao Shipbuilding plus six on option. Each ship comes in at $49.8m, a significant drop in prices where many believe $55m is the breakeven point for capes. U-Ming president CK Ong said: "The acceleration in demolition and the slowdown in newbuildings will ease the present oversupply situation in the bulk shipping market. U-Ming regards the gloomy shipping outlook in 2012 as a good opportunity for it to embark Riverine bulk operator CSC Phoenix continues to be mired in severe financial woe. Operating losses for 2011 is likely to be RMB880m, a third year of losses. Moreover, the company's asset-liability ratio has reached nearly 100%, which has already exceeded the safety margin for bank loans. With debts from loans and expansion programs growing, "CSC Phoenix might need an approximate cash flow of RMB5bn to 6bn in 2012," one analyst predicted. Hong Kong's Noble Group appointed Yusuf Alireza as its new ceo, effective from 16 April. Noble's acting ceo Richard Elman (pictured) will step down on the same date but will continue as chairman. Alireza is the former co-president of Asia (ex-Japan) for US bank Goldman Sachs. Richard Elman Energy giant Cnooc is reportedly designing in-house a small LNG carrier. The company wants a series of 30,000 cu m ships by 2014/15 so a tender to build these ships is likely to be floated later this year. A number of Chinese yards are taking a leaf out of their Turkish counterparts by going into shipowning to keep their drydocks ticking over. Yangzhou-based Sainty Shipbuilding is said to be one of many now looking at deals mainly involving small to medium bulkers. Likewise, Sinopacific Shipbuilding has set up a Hong Kong-based owning company, Crown Ship, to control ships built for its own account. SInoShIp SpRInG 2012 7 Hong Kong-based KC Maritime, the scion of the Chellaram family, is on the acquisition trail. Currently it has 11 ships on its books, but the plans are for "many, many more" sources say. Management believes second REGULARS mUTeD CelebrATioN 2011 was the year of the highest deliveries ever, yet also the year with the lowest new orders since 2006 Consolidation era Editor Sam Chambers looks at what China's bloated shipbuilding industry might look like in three years ThE problEm yards in the People's Republic faced as Lehman Brothers went below the Plimsoll line in late 2008 was a sudden realisation that there were simply too many yards building very basic ships that were suddenly not in demand. The vast majority of China's yards are still focused on bulkers and tankers -- basic ship designs -- that are no longer in demand. Two thirds of the tonnage delivered by China in 2011 was bulk carriers. The double whammy for Chinese yards is that with rising fuel prices the Chinese ship designs have been found wanting when it comes to efficiency, one of the supreme demands for hard-pressed shipowners the world over today. The only ships still popular for newbuild orders are high 8 www.SInoShIp.oRG spec ships such as LNG and vessels for the still booming offshore sector. This is a corner of the market that the Koreans have firmly carved out for themselves with the Chinese a long way behind, lacking technical innovation at present to close the gap. Clarkson says this year's orders around the world will shrink by 9.7%. Contracts for 1,214 vessels were signed last year, down 48% from 2010, according to Clarkson. The total capacity of vessels ordered in China dropped 58%, Clarkson figures showed. South Korea was able to wrestle back its shipbuilding crown last year, grabbing nearly half of all orders placed in 2011. In 2012 the pattern is likely to be similar -- offshore and LNG remaining rare bright spots, good for the Koreans, while others starve. This urgent need to improve its technological capabilities is not lost on the top executives in China's shipbuilding sector. President Tan Zuojun of China State Shipbuilding Corporation, the state run umbrella of government backed shipyards in the south of the nation, gave a frank interview on Chinese TV in February in which he warned the nation's failure to climb the technology ladder would harm shipbuilding in the future. He added that about half of all Chinese yards would be weeded out in the coming three-year slump and 2012 would be the biggest year of consolidation. While there are some 1,526 on the books of the China Association of the National Shipbuilding Industry (CANSI) only approximately 400 of these build ocean-going vessels. According to Shanghai maritime consultant Ben Zhang that figure will be less than 50, with many M&As and others falling by the wayside, by 2015. Greek ship finance specialist George Xiradakis is even more forthright in his consolidation views suggesting the eventual number of yards will be as few as 30 giant merged entities. A glance at the top ten global yards list shows the importance of scale, with Koreans accounting for seven of the top spots. Scale is key in the coming battle for orders. The consolidation in China is already evident. China's 10 largest builders accounted yARDS for 47.7% of all deliveries last year. The aim in the latest five-year plan is to ensure that this figure rises to three quarters, a figure similar to South Korea. Shipbuilding capacity in the world has more than doubled since 2002, with most of the new capacity added in China. An era of consolidation is inevitable with smaller yards more vulnerable as they lack technology and funding, analysts concur. Fully 30% of all Chinese shipyards did not receive a single order in 2011, leading many smaller entities to cease operations, according to CANSI. Hardest hit provinces thus far have been Jiangsu and Zhejiang, both home to more greenfield sites which sprouted up in the boom than anywhere else. CANSI reports that one sixth of its 1,526 membership are currently operating in the red. As we went to print more than 30 Chinese shipyards have had to suspend operations as orders have dried up. Matthew Flynn, managing director of shipbuilding database Worldyards, comments that, "Considering the outlook for credit and freight rates this is not a seller's market. There are concerns over quality and fuel efficiency of Chinese-built tonnage, thus owners will be scrutinising the Chinese offerings very carefully." While the last decade was about getting ships on the water, the emphasis now was to search for solutions to get costs down. "Cost management will have a much greater urgency than in the last decade," warns Clarkson's Dr Martin Stopford. He notes that world shipbuilding capacity currently stands at around 55m cgt, however, orders placed last year cover barely half that volume. Yards currently have around two and a quarter years' worth of work on their books but the question is what will happen when this starts to come down. "Over the next year gaps will start to open up again in the forward orderbook, and the question of finding new contracts will become increasingly pressing," says Stopford. With newbuilding prices having already fallen by 35% over the last two years there is still some margin for them to drop more. To keep the hundreds of drydocks busy in the coming years shipbuilders will have to accept deals at below breakeven prices, as witnessed February 13 this year when Taiwan's U-Ming Marine Transport placed a rare order for four 186,000 dwt capesizes at Shanghai Waigaoqiao Shipbuilding at a unit cost of $49.3m, some $5.7m below the perceived breakeven price. "Shipyards can easily squeeze profit margins in difficult times, are often willing to price below total cost if they have a gap in their building programme. Materials account for 60% to 70% of vessel cost and that generally defines the bottom, but with gaps opening up in the work programme, deep discounts may be offered to keep the business moving," explains Stopford. pRICE DISpARITy 2011 orders Nation Size Value Korea 13.55m cgt $48.16bn China 9.2m cgt $19.2bn Shipyards are often willing to price below total cost if they have a gap in their building programme Stopford is a firm believer that the current decade is payback time for the excess of the previous ten years, that shipping is likely to be in the doldrums for much of the time through to 2020 based on the phenomenal overcapacity in most sectors of the industry. "The problem the market faces is the prospects for freight rates over the next decade do not look promising," Stopford says. "Take a look at the top Chinese shipbuilders within the world's, say, top 30 yards," comments one Shanghaibased shipbroker. "These are the names that will still be around three or four years from now, often taking over neighbouring smaller facilities. The landscape will be very different, less fragmented, and ultimately better for developing more advanced ship designs." THE BEST SOLUTIONS FOR SURFACE PREPARATION AT SEA. NOW EX APPROVED www.rustibus.com email@example.com BERGEN NORWAY SINGAPORE ANTWERP BELGIUM HOUSTON USA SInoShIp SpRInG 2012 9 oFFShoRE OSV dominance Sam Chambers charts how China quickly came to lead the world in the construction of offshore support vessels In ThE spacE of a little over seven years China has come to completely dominate the offshore support vessel (OSV) construction sector. Now, with the sector wrapped up numberswise, China's yards are busying themselves building ever more complex OSVs. Says Mike Meade, ceo and md of M3 Marine Group, "In the last seven years China has come from nothing to building 70% of the world's OSVs." M3 is a leading Singapore-based offshore shipbroker. Price has been important in this ascent � Chinese yards often being able to undercut European rivals by as much as 50%. While up until recently Chinese yards have concentrated on basic Asian designs they are now branching out into more high spec European designs. Ulstein and W�rtsil� are increasingly the two dominant designers for OSVs in China. "Currently China mainly plays a role as a builder of OSVs, but some leading yards, like Sinopacific Shipbuilding Group, have started to develop their own OSV designs," says Zhang Guang Hao, business development manager for Offshore China at class society Germanischer Lloyd (GL). From his office in the Lion Republic, Meade points out that China's positon in the OSV field is in no small part down to Singapore, with the likes of Jaya Holdings ordering huge numbers of speculative ships in China in the middle of the last decade. While there has been a sensational amount of ordering for OSVs in the past two years few are worried about overcapacity. Notes M3's Meade, "On the resale market there is a 20% premium for prompt delivery." Figures from Norway's DNB Bank lend credence to the assumption that overcapacity Chinese yards can often undercut European rivals by as much as 50% is unlikely for OSVs. Long-term fixtures for platform supply vessels (PSVs) and anchor handling tug supply (AHTS) vessels in the active North Sea went up to 128 and 48 respectively in 2011, up from 114 and 29 the previous year. In Asia Pacific, fixtures for PSVs and AHTS vessels also rose to 28 and 127 respectively, up from 27 and 107. Globally, the total number of PSVs on long-term fixtures increased to 233 last year from 204 in 2010, and demand for AHTS vessels climbed year-on-year to 328 from 202. OSV orders continue to pile in, but that does not mean many larger yards are likely to start building OSVs as orders for other merchant ships have dried up. "Although the price of OSVs is very high compared with containerships and bulk carriers of the same size, their profit margin for builders is not that high with the cost of machines and equipment taking up most of the price," points out GL's Zhang. In addition, the size of OSVs, normally 50m � 80m in length, is small, which makes it less economic for larger shipyards equipped with big docks to build them. LEADInG nAmES Zhejiang Shipyard Wuchang Shipyard Mawei Shipbuilding Fujian Southeast Shipyard Guangzhou Hantong Shipbuilding Yuexin Ocean Engineering SInoShIp SpRInG 2012 11 On the resale market there is a 20% premium for prompt delivery FInAnCE Red knight Expect Chinese ship finance deals to pick up speed this year, writes Sam Chambers, and not just for domestically built vessels Finance Special Scheme that was announced by the Chinese prime minister 18 months ago. The $122.58m facility will help finance three 206,000 dwt bulkers currently under construction in Shanghai Jiangnan-Changxing. The lead arranger was CDB and the co-arranger was Bank of China, thus this deal became the first syndicated shipping transaction between two Chinese banks as part of the new Sino-Greek Shipping Finance Special Scheme without the involvement of any Western bank. George Xiradakis, founder and managing director of XRTC Business Consultants who acted as project advisor, comments, "Chinese banks offer competitive lending products both in loan structure as well as in financial cost. Of course the main problem that exists is the long time response in the new applications but I think that the Chinese banking sector and particularly CDB is taking the appropriate measures to overcome such draw backs." "As know-how improves, it is anticipated that the heavy bureaucratic approval process often lasting for six months or more shall become more competitive," Petrofin's Petropoulos reported recently. As we went to press it became clear that buoyed by recent developments at home Chinese banks are now willing to finance ships not built in China, a potentially very big development. Bank of Communications, ICBC, Agricultural Bank of China and Bank of China have all prepared groundwork to start offering finance to owners building in South Korea. SInoShIp SpRInG 2012 13 EuropEan ouTlETs for ship finance continue to fall by the wayside. In the past few months many blue chip names have announced their intention to either pull out completely or significantly from the shipping scene. Names such as Lloyds in the UK, France's Soci�t� General, and even Germany's Deutsche Schiffsbank (a bank with shipping in its very name) have cut their commitment to the sector this year. According to Greece's Petrofin Bank, approximately 90% of all western ship finance banks are currently reducing their ship finance exposure. "Consequently, the past three years have represented an enormous opportunity for Chinese banks in particular to build up their Greek ship finance presence, based on previous and new shipbuilding orders at Chinese shipyards," Petrofin Reseach boss Ted Petropoulos noted in a report. The global newbuild orderbook which stretches through to 2014 is going to cost up to $500bn, with Greece, home of the world's largest merchant fleet, accounting for a fifth of this figure. Increasingly, shipping is looking east for finance salvation, but just how prepared and adept is China at providing capital to hard pressed, profligate owners? "To expect China to be the white knight for everything is unrealistic," says Paul Chang, ICBC's managing director and head of global shipping. Greek owners businesses that many enquiries have ground to a halt. Chinese banks' requirement of credit insurance (with Sinosure) in support of local finance has been deemed unduly expensive. This amounted to approximately 2% of the newbuilding price. Lately this requirement is increasingly being waived, SinoShip understands. Greek owners have been reluctant to accept loans 90% of western banks are reducing their ship finance exposure It is in Greece that Chinese financiers have spent most time. This was thanks to the October 2010 announcement by Chinese premier, Wen Jiabao, of a $5bn loan pledge to Greek shipping to finance Chinese shipbuildings, a figure which since then has reportedly been doubled. Up until February this year however results have been slow. Problems have been manifold. The Chinese banks' due diligence has been so demanding and intrusive into in RMB and not US dollars. As such, RMB financing requires PRC flags and PRC ship mortgages, exposing owners to greater delays, costs and risks. February 13 saw a landmark deal that shows signs of progress in Sino-Greek dealings. China Development Bank (CDB) signed an export buyer credit syndicated facility between the bank and Greece's Dryships. The facility is part of the multi-billion dollar Sino-Greek Shipping CommoDITIES CrACKiNG UP Droughts such as this recent one in Yunnan are now commonplace Water for dragons Dalian correspondent Mark Downing looks at how China's dwindling water table is shaping grain imports chIna's vIcE prEsIdEnT Xi Jinping's recent high profile visit to the US was more than just a political gesture introducing the Americans to the Chinese heir apparent, it exemplified China's exacerbating water scarcity. The accompanying Chinese trade delegation inked deals worth $6bn to purchase a record setting 12m tonnes of soybeans, exceeding a similar deal last year, so that China now buys a quarter of the US crop. But what China really wants-- and needs in growing desperation--is adequate water and such deals indirectly quench China's thirst with grain as the proxy. Since 1,000 tonnes of water are required to produce one tonne of grain, such trade deals are an efficient means to import water whereby China in effect is using grain to balance its water books. With the majority of China's water consumed by agriculture, relentless droughts, continual pollution 14 www.SInoShIp.oRG and plummeting water tables will further squeeze agricultural yields. China is being forced to import grain to feed its evergrowing and more prosperous population with a growing appetite for higher protein consumption. "China's imports of corn will likely grow like the soybean trade; that's almost a certainty," says Tommy Xiao, an analyst at Shanghai JC Intelligence. China's corn imports are projected to double this year and ultimately may surge sevenfold to a record 28m tonnes by 20152016 as local yields fail to keep pace with increased demand. China is also topping up its reserves used to guard against market disruptions, which had been partially depleted last year to combat inflation. Before these recent deals, the International Grains Council forecasted China's grain imports to grow 135% between 2009 and 2012 reaching nearly 7m tonnes, while production is estimated to grow only 11% to nearly 288m tonnes. Major improvements in cultivation over the last generation have made China both selfsufficient in food production and the largest grain producer in the world. With the exception of soybeans, the Chinese grain market has been relatively insulated from the rest of the world due to a policy of grain self-sufficiency, tight market regulations and stabilising government reserves. However, multiple searing droughts over the past decade -- culminating with the worst in 60 years around Beijing and the North China Plain -- have scourged crops while water tables TonnEs of waTEr needed to produce one tonne of grain 1,000 have dropped, forcing central government to reconsider its national security stance on self-sufficiency. Water usage in China has quintupled since 1949. By 2010, 371bn cu m of water was used for agriculture -- 62% of total use. However, China's freshwater resources per capita are significantly low at just a quarter of the world average or 2,134 cu m with several highly populated regions comparable to the Middle East. By 2030, China's Ministry of Water Resources forecasts that per capita water resources will decline below the World Bank's scarcity levels of 1,000 cu m per person. Twothirds of China's cities face increased scarcity of water with an annual water shortage of 40bn cu m, with northern China reporting some of the highest rates of water loss in the world. Ground water tables around Beijing have dropped between 100 to 300 m. Last year, the central government made water policy a top priority in its 12th Five-Year Plan, and in the Zhongyang Yihao Wenjian or `Number One Central Document', a vehicle used for tighter coordination between departments. By 2020, China will need to increase grain production by 10% more than the 2010 yield, according Beijing's Institute of Water Resources and Hydropower Research. To achieve such growth China is expected to invest $600bn over the next decade in irrigation and water transport measures. To sustain China's role as a leading global export powerhouse, China may fast become not only the world's largest grain importer but also a major player in international grain markets. The state-owned China National Cereals, Oils and Foodstuffs Corporation (COFCO), the country's largest trader of grains and edible oils, plans to spend more than $10bn on overseas mergers and acquisitions in the next five years. LoGISTICS Butchered Correspondent Jason Jiang identifies challenges in China's cold chain sector chIna's food fIgurEs make for fat numbers. Domestically, for instance, there are more than 2,500 large meat factories, with a combined output of more than 60m tons a year. Likewise there's more than 2,000 large frozen food factories with an annual output of more than 10m tons. There's a similar output of cold beverages made in the People's Republic, while 8m tons of dairy products are made at home and a huge 44m tons of aquatic products are made in China each year. No wonder, then, as the Chinese have become richer and consumed more -- and more diversely -- demand for cold chain logistics has expanded at an annual rate of more than 8%. The shocking statistic, however, is one to kill any appetite. Official estimates suggest that between 25 and 35% of all meat, vegetable and aquatic products in China, some RMB80bn in value, are damaged during transportation and storage every year. In recent years, food safety problems have been a hot issue in China. Sinian, a leading Chinese brand for quick-frozen food, recently has been reported by consumers and media for selling bacteria-contaminated quick-frozen dumplings. Consumers are still reeling from a series of high profile dairy disasters too. "The cold chain logistics industry in China is still in its infancy. The next 15 years will be a period of rapid development of China's cold chain industry," asserts Liu Weizhan, chief secretary of the cold chain branch of the National Logistics Standardised Technology Committee. The main problems for China's cold chain industry, Liu suggests, are its low operational 16 www.SInoShIp.oRG meATy iSSUe One third of perishables are damaged in transit and storage in China efficiency thanks to a smallscale and non-standard market. First, there is a serious shortage of cold chain infrastructure, according to Liu. Refrigerated vehicles only account for 0.3% of all freight vehicles. Existing refrigeration and cold storage facilities are generally too old and regional distribution is imbalanced. Secondly, cold for cold chain are incomplete. There are still no national standards for equipment, manufacturing, operations and management. All these hassles aside there are clearly opportunities for overseas firms. PFS Yida Logistics, a joint venture between the US-based Preferred Freezer Services China upon completion in 2013. PFS opened its first cold storage facility in China in Shanghai Lingang Logistics Park near Yangshan port at the end of 2011, with a capacity of 40,000 tons. Its second facility in Shanghai Waigaoqiao with a storage volume of up to 30,000 tons was set to open as we went to print. The next step for PFS will be to build a similar sized centre to cater to the Pearl River Delta region. "We are building out new state of the art cold storages as well as offering a cold chain logistics delivery solution with our JV logistics partner Sinotrans and we will be expanding our business model into other regions in China with a long term goal of being able to provide a national network of cold chain facilities," says Tim McLellan, PFS's managing director of international business development. The cold chain logistics industry in China is still in its infancy chain technology is archaic compared to overseas. Thirdly, the development of third-party cold chain logistics companies has been too slow. The cold chain logistics system is incomplete. Some big manufacturers have to spend very big to build their own cold chain logistics systems, but obviously smaller companies do not have the capability to do that. What's more the standards (PFS), the largest refrigerated warehouse operator in North America and the third largest in the world, and Dalian's Yida Group, a conglomerate in the fields of property development, IT consultation and logistics, is venturing into China's cold storage market. The company started construction of its Cold Chain Distribution Center Project in Tianjin port late last year which will serve northeast CRUISE Appetite remains firm despite Costa Concordia disaster A host of larger ships will still call in China this year forTunaTEly ThE 22 Chinese passengers onboard the stricken cruise ship Costa Concordia, which capsized off Italy in January, all survived. Fortuitously for the cruise industry as a whole the repercussions among Chinese consumers from this high profile disaster, as well as the powerless Costa Allegra debacle in the Indian Ocean six weeks later, do not look too damaging. China remains the fastest growing market for the cruise industry with double digit growth in passenger numbers for the past four years. "We felt there might be a period of non-bookings," says one travel agent in Dalian, "but we continue to receive a high levels of enquiries." Costa Cruises has said that its capacity growth target in Asia would hold steady at 40%, and that all ship deployments to the region would proceed as planned. China accounts for much of Costa's planned Asian expansion this year. Costa, the first foreign cruise company to operate in China, is doubling its China fleet, bringing one more ship, the 75,000-ton Costa Victoria to the country, with a number of short voyages of three to seven days, taking passengers to famous tourist destinations in nearby countries such as Japan and South Korea. Costa has called in PR support in China following the capsizing off Italy which killed 32 people. The company has appointed Hill + Knowlton Strategies in Shanghai to oversee its brand reputation efforts, as it attempts to "harness renewed momentum and move forward" in the country. To date, more than 170,000 Chinese passengers have travelled on Costa Cruises. An official from Shanghai International Port (Group), which operates one of the top cruise terminals in the country, tells SinoShip: "34 of our 49 homeport calls this year will be from the Costa Victoria. The incident in Italy will not affect the fixed schedule of the Victoria in Shanghai. We have yet to see really bad after effects from the Concordia incident from a passenger booking point of view." Meanwhile, Royal Caribbean is introducing its giant Voyager of the Seas into China, servicing 20 itineraries from the country. Another ship, Legend of the Seas, came back to China in March, its fourth visit in as many years. The two ships, departing from Tianjin, Shanghai and Hong Kong, will service about 50 itineraries, the destinations being Asian countries, including Japan, the Republic of Korea and Singapore. It will be the first time Royal Caribbean has operated two ships in China simultaneously. MSC Cruises, meanwhile, plans to introduce a cruise ship into China by 2014. SInoShIp SpRInG 2012 17 WORLDWIDE SERVICE 24/7 At TurboNed, we have over 30 support service stations located throughout the world. This enables us to offer worldwide turbocharger service and repairs for customers operating in the shipping, power plant, offshore and railway markets. For latest contact details and information about our global network check: www.turboned.nl TurboNed Group B.V. � Kreekweg 10 � 3336 LC Zwijndrecht T: +31 78 6205252 � F: +31 78 6123230 � E: firstname.lastname@example.org pRoFILE The UPS of shipping SinoShip catches up with Yang Xianxiang, the ceo of the mainland's largest private shipping line new ships as prices peaked, not going back to put pen to paper on any newbuild contract until 2010 after it had listed. "Container shipping is a global business with no shelter," says Yang, "the market we share is the same, but the differences are each company's operational ways, management systems, and so on." Yang reckons the peak era freight rates are long behind the industry and it will take at least three or four years before the market has a decent supply/demand balance again, "and it could take longer," he warns. Container shipping is a global business with no shelter and networks in Asia, our systems and clients are all stable." Another factor in SITC's favour, says Yang, is its focus. Rather than getting distracted with real estate, steel plants and so on, the company's focus is simply shipping and logistics. On the logistics front, SITC has invested in significant hardware, including logistics parks, warehouses and is able to offer door-todoor services. Even in the downturn of the past three years the Hong Kong-listed line has been able to grow its container volume and turnover by close to 10% a year. This year, SITC has 12 newbuildings delivering, and the company is actively watching the prices of newbuilds and secondhand ships at the moment with a few more acquisitions in mind. The trick for cash-rich SITC is all in the timing. After 2004 it held off ordering any T wenty-one-year-old SITC has a company in mind when it looks to describe its operational model: express giant UPS. Yang Xianxiang, ceo of the fast growing containerline, explains that SITC is trying to position itself as the shipping equivalent of the US brand, combining fast speed, strong, dense networks, high efficiency and custom-tailored services. The intra-Asia operator reckons it is in a better place to handle the current downturn than many of its peers. "The outside factors can be summed by a Chinese saying `Tian shi, di li, ren he', which means good timing, geographical convenience and good human relations," says Yang. "For the tian shi," he continues, "the general environment in China is strong. China is developing which is good for our business. For di li, comparing with other regions, Asia is the one with the best performance in this industry downturn, and we are based just in this region. And for ren he, we have many branches NEED TO KNOW NEED TO KNOW SITC foundEd In shandong 21 years ago, SITC is the largest private mainland Chinese shipping line by revenue. The containerline currently operates 53 container ships, of which 30% are owned with an average age of 7 years. Mid-term fleet development plans call for the ownership ratio of the fleet to rise to 50%. SITC listed in Hong Kong in 2010. Your chance to reach the right audience This magazine is being read by every major shipowner across Greater China. Features in Issue Two include ship recycling and crewing. Contact email@example.com for advertising details SInoShIp SpRInG 2012 19 The Marshall Islands Registry service and quality are within your reach The leaders in global maritime recruitment. Faststream Recruitment Group International Registries (Far East) Limited Singapore Branch in affiliation with the Marshall Islands Maritime & Corporate Administrators Tel: (+65) 653 27 201 Email: firstname.lastname@example.org Twitter: @faststream www.faststream.com tel: +65 6226 2726 | email@example.com | www.register-iri.com pRoFILE Sinopacific's alternative path Amid unprecedented consolidation in China's shipbuilding sector SinoShip gauges the views of the boss of one of the nation's leading yards S imon Liang presides over one of China's best-regarded shipbuilding enterprises, Sinopacific. Nevertheless, even he has had pause for thought in this current downturn. The chairman and ceo looks at the hundreds of yards struggling to get orders and admits to SinoShip: "Because of today's tough market and measly demands, especially with the difficulty of funding and unfavourable policies, resources relocation and mergers are very necessary." Famed for his entrepreneurial zeal, Liang, originally from Zhejiang, says "crisis and opportunity exist at the same time" and that is why his company has set up a special team to examine merger opportunities with a number of yards already having approached Sinopacific in the past couple of years. Sinopacific has been careful to carve its niches, and that is one of the very important things that has separated it from many of its peers. "As a private shipbuilder, we are not chasing large scale business blindly, we mainly focus on niche markets, areas with high entry levels and technology barriers, to demonstrate our added value,'' says Liang, 49. Sinopacific's large orderbook means We are not chasing large scale business blindly it is in the rare position of not having to slash its prices to close to breakeven or below prices for the time being. With close to 120 ships on order, worth nearly $4bn, almost all its drydocks are busy through to 2013. "In 2012, we don't need to worry about taking new orders as we have a good orderbook already. Nowadays, people who invest are mostly strategic owners. What they care about is merely three aspects: quality, brand and performance, especially operational costs, i.e. fuel consumption. These are exactly where our strengths lie." Bulk carriers and offshore support vessels make up the mainstay of Sinopacific's offerings though the company is developing its own tanker design. Going forward the plan is to continue to develop software, up marketing and spend more on research and development -- all things that genuinely makes Sinopacific a stand out in China. Nearly 90% of Sinopacific's delivered products are developed in house via its R&D team in Shanghai. This February saw the first sea trial of another exciting design by the yard, the Crown 63. DY4001, the first Crown 63, a 63,500 dwt bulk carrier, completed all sea trials successfully on February 18. The ship is one of 22 of this type set for delivery this year and, stacked with plenty of green technology giving it a 13% fuel saving, it has received classification society Bureau Veritas's first Energy Efficiency Design Index (EEDI) certificate in Asia. Some of these new ships will end up being owned by Sinopacific's Hong Kong subsidiary, Crown Ship, a shipowning/ trading vehicle. "The position of Crown Ship is not to be an owner," stresses Liang. The vehicle will be used to better understand the needs of owners, says Liang, as well as providing alternative financial solutions to clients. Crown Ship can provide some additional pre-delivery funding which will allow owners to make a payment of less than 30% before delivery. Secondly, newbuildings can be directly owned by Crown Ship and owners will be given the opportunity to buy the ships on a resale basis. Thirdly, Crown Ship can arrange post delivery loans for newbuildings and bareboat charter out the vessels to the buyer upon delivery on a medium to long-term basis, with an obligation to purchase the vessels when the contract expires. It's a pioneering concept, much in the spirit of the thinking-outside-the-box Liang, a man whose education included three years at the prestigious Sorbonne in Paris. NEED TO KNOW NEED TO KNOW SInopACIFIC The Sinopacific Shipbuilding Group was founded by Simon Liang in 2003. It is a diversified corporation engaged in shipbuilding, trading and design. The group has two shipyards -- Zhejiang Shipbuilding and Yangzhou Dayang Shipbuilding -- with a total orderbook of nearly 120 ships worth close to $4bn. Focus is on bulkers and OSVs. Sinopacific is now getting into vessel ownership via a Hong Kong subsidiary. SInoShIp SpRInG 2012 21 pRoFILE Master of the markets L Chief correspondent Katherine Si catches up with Zhang Ye, president of the fast evolving Shanghai Shipping Exchange ike a snowball, as the Shanghai Shipping Exchange (SSE) celebrates its 15th year, its range of offerings to the world gets ever larger. Indeed, the last 12 months has seen the SSE roll out more services than ever before and it has become a true reference tool for international shipping, its container index, for instance, becoming a bellwether, routinely mentioned by the likes of Bloomberg. SSE's swift transformation has been in step with central government's announcement four years ago to make Shanghai an international finance and maritime hub by 2020. SSE's role, according to its president Zhang Ye, is to act as a go between information provider between the Chinese government and the market. Specifically SSE's three objectives are to standardise transactions, help adjust freight rates and to communicate information on the shipping market. As well as its liner index, a domestic coal index, a domestic bulk index, two derivatives platforms, and plans afoot to launch this year international dry bulk and oil tanker indices, what's next for this rapidly evolving information tool? "Shanghai Shipping Exchange will keep being steady and creative," says Zhang. "We will further develop our Shanghai international shipping information centre, while perfecting our container, dry bulk, oil tanker, ship pricing and other shipping index series to make ship trading, freight transactions and human resources exchange hit a certain scale." Freight derivatives can be one of the tools that the shipping industry can use to circumvent freight risks The launch on June 28 last year of a derivatives platform tied to container shipping indices, tracking spot rates on 15 routes including Europe, the Mediterranean and the US was a big step forward for SSE. 400,000 lots were transacted in the first month alone and millions subsequently. While many in the liner industry have their reservations about derivatives -- "shipping is enough of a casino already, thank you very much" -- the SSE is adamant there's a very strong future for derivatives. To begin with the SSE expects the platform to be dominated by small to medium enterprises. Smaller liners need a risk management tool because they are weaker in terms of pricing ability. The argument SSE puts forward for derivatives is that they're better than conventional hedging tools. Only when the market has significant liquidity can it attract larger companies, says the SSE. It's still early days for derivatives, stresses Zhang. "Currently, shipping freight derivatives are still at a market cultivation stage," he says, "we need to engage the market more widely. In the future, we will make shipping freight derivatives be one of the tools that the shipping industry can use to circumvent freight risks." As well as liner market tools SSE has also launched derivatives for 40,000 to 50,000 dwt bulkers on routes going from Qinhuangdao to Shanghai and Guangzhou. The new derivative is settled in yuan in accordance with a freight-rate index run by the exchange. The derivatives are sold in lots, one of which is equal to 100 tons of cargo. The exchange requires 20% of margin from each trader. Coal freight rates on the two routes tend to fluctuate widely. Every year, more than 400m tons of thermal coal is shipped on the two routes at rates varying from 20 yuan to 160 yuan a ton, according to the exchange. If the new derivative proves popular, Zhang says the exchange will consider introducing similar products for more routes and more goods. SSE now has 80 employees at its headquarters on the Huangpu river, and another 300 at its various subsidiaries. The 200-plus membership of China's de facto answer to London's Baltic Exchange includes container lines, agents, shippers, freight forwarders, banks and brokers. How then does Zhang see the exchange a decade from now? "In the next ten years," he says, "following the general planning of the Shanghai international shipping hub and finance hub, Shanghai Shipping Exchange will simultaneously develop with Shanghai, continue to be based in Shanghai, coving the whole country and be involved in covering world shipping." The blizzard of data, the snowball, will continue to gather in pace and size in other words. NEED TO KNOW NEED TO KNOW SSE Founded 15 years ago, it currently has two derivatives platforms, five indices, a news centre, and plans to launch two more international dry bulk and tanker indices later this year. Headed by Zhang Ye. 22 www.SInoShIp.oRG pRoFILE Sohmen on China `A number of non-Chinese owners will be shut out of the game,' warns the boss of BW Group F or all the bullishness shipping executives have extolled on prospects regarding China over the past decade, the odd dissenting voice is valuable in today's hardpressed environment. While many still believe China can dig the shipping industry out of its current malaise the advice in Hong Kong from one of the world's largest and most respected shipowners is very much not to put all your eggs in the basket of China. Dr Helmut Sohmen, chairman of BW Group, and his right hand man over the past 30 years, Stephen Pan, chairman of World-Wide Shipping Agencies, warn SinoShip readers that opportunities for foreign owners in China going forward are likely to be fewer and fewer as China, Inc takes greater control of its supply chain. "A number of non-Chinese owners will be shut out of the game," says Sohmen, 72, adding: "This will remove opportunities." Sohmen explains that with the rapid growth of Chinese shipbuilders excess vessel capacity was inevitable at which point state-owned lines went to Beijing to ask for protection, which they duly received. "The more they build, the more GDP grows," says Sohmen, "GDP growth always comes first. "Niche opportunities will increasingly disappear as the Chinese learn to do things themselves." Pan tells SinoShip that the world puts too much emphasis on China helping out the health of the global economy. Quite so, says Sohmen, pointing out from a shipping perspective that demand growth out of China won't "go away" but "you shouldn't rely solely on China". He notes how even volumes of oil imports into China are slowing at the moment. Pan observes that even the incredible march of Chinese shipping lines has slowed of late. "Look at the expansion of state-owned or quasi-state-owned shipowners, it's been phenomenal, but it is now slowing," says Pan, who goes on to look at Grand China Logistics, which started out with suitably grand ambitions of operating 100 ships by 2014, but is now struggling to pay its charter bills. "The Chinese won't help the oversupply situation," says Sohmen, an Austrian national, who started working for WorldWide Shipping in 1970, became chairman in 1986 and was the man behind the audacious takeover of Norway's Bergesen in 2003. Another area, which many have touted as a slice of salvation for the industry, is in China offshore. Here, once again, Sohmen is on hand to pierce that bubble of optimism. "So far [the Chinese] have been spectacularly unsuccessful in offshore, so the expectations for offshore are limited. I wouldn't hold my breath for China offshore," Sohmen says. BW currently has 16 offshore facilities, primarily FPSOs. So then, pessimism aside, what are the opportunities in China? LNG is one area that excites Sohmen. "We would like to get involved, although we could not before 2015," he says, adding that LNG import bases will increase across China. State authorities announced earlier this year that LNG imports increased 45% last year and are set to grow by a similar number in 2012. Another sector to keep an eye on in the future is China's build up of oil refineries, which could see product exports take off. For Pan, there's plenty of upside for China coal imports and subsequently all the constituent infrastructure build-up necessary to accommodate more and more coal, such as more terminals. NEED TO KNOW NEED TO KNOW Bw Operates a fleet of 116 owned, partowned or controlled vessels including tankers, LNG and LPG carriers, and FPSOs. World-Wide, founded in 1955 in Hong Kong by Sir Y.K. Pao, became the world's largest shipowner by 1979. Helmut Sohmen, 72, became chairman in 1986 and took over Norway's Bergesen in 2003 and rebranded firm as BW. Heir apparent: Andreas Sohmen-Pao. SInoShIp SpRInG 2012 23 FEATURE Paint it Katherine Si provides an exclusive snapshot of China's vast repair network and argues the sector is now set to suffer from overcapacity red C hina's ship repair is bloated, chronically so, according to sources within the industry and the very real spectre of additional capacity coming from shuttered newbuild yards has many on edge. Overcapacity and weaker demand resulted in a drop in volumes and values of repair jobs last year in China. Li Zhengjian, deputy general manager of China Shipping Industry Co (CIC), the largest group in the repair business in China, reckons there are 10m dwt of repair yard capacity of facilities with docks of 50,000 dwt and higher. Not only are there too many yards in terms of numbers, they're also all getting too big. Currently, there are 17 ship repair docks of 300,000t dwt class or above in China, including six still being built; 21 docks are between 100,000 and 300,000 dwt class and 26 docks are under 100,000 dwt in size. 60% of the ship repair docks under construction at the moment are for giant docks of over 300,000 dwt capacity. 2011 saw a slew of very large repair docks enter service such as a 300,000 dwt dry dock in Shanghai, a 180,000 dwt dock in Fujian, two docks of 140,000 dwt and 230,000 dwt at Shanghaiguan Shipbuilding Heavy Industry and two giant docks -- 300,000 dwt and 400,000 dwt -- in Dalian. What's more there are another 10 ship repair facilities still under construction, principally in the Bohai Bay area and Fujian province. Li thinks the total dock capacity is too much, but the distribution and dock size are imbalanced throughout the nation -- capacity in the Pearl River Delta is comparatively weak, for instance. An official from the ship repair branch of the China Association of National Shipbuilding Industry (CANSI) agrees there's too much capacity at present, telling SinoShip: "It is a true that there are many new facilities for ship repair under construction including many large sized docks and cranes. We think the overcapacity in the ship repair industry does exist. The main reason is not because of a small amount of ship repair orders, but because of too many facilities." CANSI reports that prices for repair have been low throughout 2011 and continued to drop in the first months of 2012. "Some yards are taking non-profitable jobs just to keep going, while a few have had to close," says the CANSI official. SinoShip polled a number of yards and the average drop in revenues last year was in the region of 15% while profits slumped 24 www.SInoShIp.oRG ShIpREpAIR BRIEFInG BAR Shipmanagers' viewpoint vIjay rangroo, boss of MTM Shipmanagement in Singapore, has some simple advice for those mulling repair work in China. "The trick is," he confides, "to build a relationship with one yard such as Cosco or Chengxi and then stick with them." While steel works and paint jobs are viewed by Rangroo as fine in China, more fine tuning work such as calibration or reconditioning can be problematic. On the issue of pricing, China is unbeatable, he says, while cautioning that safety is still "an issue". Yes, it certainly is, concurs Rajaish Bajapee, the Hong Kong-based ceo of Bernhard Schulte. "There's no one size fits all solution to safety," he says. "The safety culture has room for improvement in China, but that is coming." China Shipping Industry Co (CIC) for ThE ThIrd straight year the subsidiary of China Shipping Group came out as the largest repair group in China in 2011 by vessels completed, ahead of Cosco Shipyard. CIC completed 746 ships last year, up 12% year-on-year and accounting for 22% of all repair jobs done by China's 15 main repair conglomerates. Established in 1998, the group owns and manages six ship repair yards across the nation. Yiu Lian becomes number one yIu lIan dockyards (Shekou) was ranked No.1 on 2011 annual turnover for the first time among the main ship repair yards in China. With a total RMB1.85bn annual turnover in 2011, up 16% yearon-year Yiu Lian, located in south China, completed a total of 223 vessel projects -- both repairs and conversion -- including three conversion projects of VLCC to VLOC, one conversion project of offshore cargo and launching barge, one comprehensive repairing of an FPSO, and the serious repairs for eight mega container carriers of Maersk Line. "Although we made a good performance last year, the profit situation is just passable," a spokesperson tells SinoShip. "Ship repair prices are not very pleasant at the moment and have slid down since the start of this year." Yiu Lian has no plans to expand this year, and was able to be fully booked throughout the first quarter of 2012. oVerSTreTCHeD There is 10m dwt of repair capacity at yards with docks of 50,000 dwt and above across China around 45% on average. Nevertheless, unlike in shipbuilding, CANSI is not predicting a period of mergers for the repair industry. Some repair yards continue to make the switch to shipbuilding and analysts expect this to be happening in reverse much more later this year. Huarun Dadong Dockyard, arguably China's most skilled conversion specialist, now located on Chongming Island in the Yangtze River Delta, has just embarked on building a series of 8,800 teu containerships. The yard added a 380 m long graving dock last year and a series of steel and coatings workshops plus an 800ton gantry crane. With some 30 shipbuilding yards having shuttered operations in the past 12 months a real concern is a flooding of additional capacity as shipbuilders become repairers, pushing prices lower. Seasoned shipping engineers warn against mixing these professions however. "Skill sets and infrastructure required for repairing and building ships are totally different and should not be mixed," warns one engineer in Singapore. SInoShIp SpRInG 2012 25 FEATURE WiND CHANGe China is on course to export more than 1,000 wind turbines this year Fast-spinning industry B 26 Jason Jiang reports from the recent Breakbulk China event in Shanghai In Shanghai breakbulk volumes have leapt from 26m tons in 2006 to 48m last year. While this astonishing growth is unlikely to be matched again, port authorities in Shanghai anticipate an annual growth rate for breakbulk volumes of around 10% in the coming five years. What delegates were told however is that Shanghai's breakbulk docks are now groaning under the pressure, and this comes despite expansion carried out recently. "Breakbulk docks have nearly reached saturation," warned Li Yiping, the deputy general manager of Sino-Polish jv, Chipolbrok. However, good news is that warehouses are being expanded while the port's computer management system for breakbulk cargo is being enhanced which will help the growing throughput numbers. "I think to cope with the increasing cargo volume in the future, infrastructure is very necessary," agreed Wolfgang Harms, senior representative, China, for Rickmers Linie. The Hamburg-based operator announced at the show the expansion of its market coverage in China adding additional liaison offices in Changsha, Chongqing and Chengdu, reakbulk volumes in China continue to lure operators from across the world, but the intricacies involved in conducting business here are still a minefield that takes much time and patience to understand. Those attending the UBM-organised Breakbulk China event in Shanghai at the end of February were given clear pictures of the upsides and downsides of operating in this vast nation. Port throughput in China reached 7.2bn tons last year led by mighty Shanghai which notched up 620m tons on its own. www.SInoShIp.oRG BREAkBULk NEED TO KNOW ChIpoLBRok NEED TO KNOW chIpolbrok, a 50:50 joint venture between China and Poland, only recently received its last heavy lift vessel from a series of six 30,000 dwt ships ordered from Cosco Dalian Shipyard, and yet it is already gearing up for another big order. Chipolbrok can lay claim to being the first foreign-invested joint venture registered in China after 1949, dually headquartered in Gdansk and Shanghai. Its heavylift fleet now totals more than 20 ships giving the 61-year-old joint venture more than 500,000 dwt in capacity. A further eight heavylift newbuildings will be ordered shortly. Currently, the bulk of Chinese production of wind turbine units goes to the domestic market, but exports are expected to account for 30% of volume by 2015. In 2011, China exported 361 wind turbine units to the European Union, 300 to India, 71 to the USA, 70 to Australia, and 29 to South America. Sourcing in China As the sophistication levels of product, components, equipment and machinery from China continue to make generational advances by piggybacking jvs with US, EU and Japanese technol ogy leaders, it has become increasingly important for foreign logistics providers to be able to locate quality agents and suppliers within China. "China has opened up a lot of opportunities in the last ten years or so, and naturally presented potential competitive advantages for those foreign companies looking to enter and looking to source or manufacture products and services here, but once in, it is important to remain competitive, we must be willing to adapt and upgrade our souring strategies," said Brain Posey, head of Panprojects China. "When looking for a partner, you need to do your due diligence, find out your partner's motivation of signing the contract and operational capabilities and make sure these meet your requirements," said Clement Tan, general manager at CEVA Logistics. The age old issue of foreigners not being allowed to tranship cargoes was discussed with Chipolbrok's Li suggesting that with Beijing's determination to develop the western regions this ruling should be overturned soon. SInoShIp SpRInG 2012 27 while strengthening its presence in Guangdong. "Moving closer to the major industrial production facilities and engineering, procurement and construction companies will enhance the company's ability to offer its clients tailor made, innovative and efficient transportation solutions from the factory up to the construction site," Harms said. opportunities for international firms, Goh said, but how long that window will remain open is hard to predict given how fast and "aggressively" Chinese logistics companies were evolving to meet every supply chain demand. "China's breakbulk market is evolving very quickly, and in the right direction," said Goh. "A lot of care, control and courage will be required to succeed." Price sensitive China does remain a tough market, speakers and delegates concurred, in terms of making a decent bottom line. Chinese shippers continue to be "rather price driven" said Mui-Fong Goh from US management consulting firm A T Kearney. However, Goh noted a greater willingness by shippers to appoint logistics partners to provide value-added services. Herein, lie Power of wind In terms of specific cargoes that generate increasing amounts of business out of China, wind turbines received much attention at the event. A T Kearney's Goh said that since 2010 China has led the world in terms of installed wind power capacity, with Beijing's promising to spend RMB500bn in the wind-power industry through to 2020. *** ADVERT SInGApoRE In ChInA ownERS In ThE LIon REpUBLIC iNTerNATioNAl DebUT PSA's first overseas investment was in Dalian in 1996 Shipping partners C Editor Sam Chambers heads to the Lion Republic to see how strong ties are with the PRC "underscores the strong bilateral ties that China and Singapore have built up over the years but is also testament to the enhanced maritime relations that both countries share'", Singapore's Ministry of Transport said in a statement. "The MOU would provide for an expanded scope of cooperation between the two countries, including shipping policy, maritime safety and security, as well as maritime research, development, education and training," it added. Transport Minister Lui Tuck Yew, who signed the MOU with China's Minister of Transport Li Shenglin, said it would enable the two countries to "jointly address the new challenges ahead in the maritime and shipping arena, building on our many common interests in the maritime sector". In terms of substantial investments overseas few can beat port operator PSA International's commitment to China coverage. PSA's first ever overseas investment was in China, back in 1996 in the northeastern city of Dalian. Since then it has added terminal coverage in China in Tianjin, Fuzhou, Guangzhou, Dongguan and Hong Kong. "Despite a possible slowdown in the growth of its economy in the near term, China remains an important market for PSA," Ong Kim Pong, regional ceo for northeast Asia, tells SinoShip. "We invest in China ports for their great potential and bright prospects." Fellow Singaporean port operator Jurong Port also made its first investment overseas in China, just last year in Rizhao. hina continues to be a vital economic partner with Singapore. Bilateral trade between these two republics rose by 6.4% year-onyear to $80.5bn in 2011. The People's Republic is currently Singapore's second largest trading partner, and top investment destination. Both the China-Singapore Free Trade Agreement and the ASEAN-China Free Trade Agreement continue to spur even stronger economic cooperation. In shipping, the nations are close, holding regular dialogue and big firms on both sides invest heavily in each other's backyards. Last October, for instance, Singapore and China signed a Memorandum of Understanding (MOU) on Maritime, Shipping and Port Cooperation. The new MOU, which supersedes an earlier one signed in 2004, not only 90 80 Bilateral trade ($bn) 70 60 50 40 30 73.4 73.2 60.5 76.4 81.3 20 10 0 many ownErs from Greater China have flocked to Singapore thanks to the incredible incentives on offer. Among the most noteworthy is Cosco Corporation. The subsidiary of China's largest shipping concern has one of the largest ship repair, shipbuilding and offshore marine engineering operations in China. It also has dry bulk and ship agency business under its remit and is listed in Singapore. Another name that has both caused worry and ecstasy for Singapore authorities over the years is Taiwan's Evergreen. It caused consternation back in 2002 when it pulled out of Singapore to call at nearby rival Port of Tanjung Pelepas (PTP) in Malaysia. However, three years ago the line's founder Chang Yung-fa made a big return to Singapore, shifting a large swathe of ships from the Panamanian flag to the Singapore flag under a new Singapore subsidiary taking advantage of the country's Approved International Shipping Enterprise (AIS) scheme which provides 10 years renewable tax exemption for qualified international shipping companies. A total of 50 ships are scheduled to fly the Singapore flag soon. Evergreen is so firmly back in the good books of Singapore, Inc that its deputy managing director of its local agency business, Patrick Phoon was recently anointed president of the influential Singapore Shipping Association (SSA). "In view of the more challenging times ahead," Phoon said in one of his first engagements since taking on the SSA role in January, "I certainly hope that the Singapore government... will lend a helping hand by offering tax cuts and reducing the cost of doing shipping business in Singapore." 2007 2008 2009 2010 2011 SInoShIp SpRInG 2012 29 FEATURE In place SinoShip profiles three of the leading Singaporean lines' activities across China B orn on Kinmen Island, opposite Xiamen, Teo Woon Tiong set up Pacific International Lines (PIL) back in 1967. He was one of very few people in Singapore at the time who was able -- and successful -- at conducting business in the People's Republic, launching a pioneering service from China to the Middle East. Fast forward 45 years, and under the capable stewardship of his son, SS Teo, China continues to be very much central to PIL's fortunes. As one of the top 20 containership operators in the world, PIL has set up more than 10 branch offices and over 15 representative offices in China with most of its ships built these days in China. It has also diversified into container manufacturing with nine factories operating in China, making subsidiary Singamas the second largest container manufacturer in the world. In the logistics arena, PIL has established in China over 10 joint ventures engaging in logistics related activities such as supply chain management, consolidation/distribution facilities, warehousing, container depot operations and trucking. Most recently PIL has been linked with a ship recycling/repair yard in northeast China. Dalian Shipbuilding Industry Co (DSIC) will start trial operations of its new shipyard on Changxing Island in Dalian in April this year. The yard will be one of the largest recycling and repair facilities in the biG DeliVery APL's first ever 10,000 teu ship, delivered in December, was named APL Chongqing, after the city where it has its largest overseas office world, with the breakdown of ownership reported as 67% for DSIC, 15% to Anshan Steel and 18% for PIL. Another Singaporean shipping firm heavily invested in China is Neptune Orient Lines via its subsidiaries APL and APL Logistics. Indeed, APL can chart its first China calls all the way back to 1867. Last June was a significant moment for NOL in China with the opening of its first joint venture Chinese container terminal. NOL, together with SITC, joined with Qingdao Qianwan United Container Terminal Co, to operate the 1.5m teucapacity site in Qingdao. The container terminal is equipped with seven postpanamax cranes as well as 16 rail-mounted yard gantry cranes. Right across the globe ocean carrier APL has more than 200 offices, but its largest one outside of HQ Singapore is in a place some 1,500 km from the sea. In September 2010 NOL opened its largest overseas office in Chonqing, the world's largest municipality. The Global Service Center opening was attended by Singaporean prime minister Lee Hsien Loong and Chongqing mayor Huang Qifan. With more than 600 staff, the centre carries out the back office functions for the shipping line and logistics subsidiary. NOL has 46 offices and more than 1,800 employees throughout China with a regional headquarters in Shanghai. From Dalian to Hong Kong shIp chandlEr sInwa has a unique position in China. With seven offices in the PRC, the company can claim to be the only Singaporean ship supplier with its own offices in the world's most populous nation. What's more the company will shortly add to its network as it is looking for a building in Shanghai to store provisions while big name clients have asked Sinwa to establish two more bases in large growing Chinese ports. From its eight strategic locations, Sinwa can make deliveries to more than 80 ports and shipyard facilities across China. Mike Sim, executive chairman and ceo, says, "When the market opens up in China we want to be there and show what a strong network we have." In addition to serving Singapore and China, Sinwa also has plenty of business out of Australia. Few non-Chinese firms can boast such a broad set of investments as IMC 30 www.SInoShIp.oRG SInGApoRE In ChInA "Chinese companies and banks have recently set up leasing companies. The companies are currently focusing on the domestic business and as such are pretty occupied with that. Going forward as they look to deploy further capital, they would likely think about other options in the global shipping field. Chinese companies have traditionally found Singapore and Hong Kong as the destination for their overseas hubs and listing venues. As said, Singapore will continue to find favour with Chinese companies. As such, shipping trusts could then become an avenue for the Chinese to consider. We know from speaking to some Chinese companies and investors that they are considering shipping trusts and will likely continue to do so." -- Philip Clausius, ceo, First Ship Lease Trust Shanghai acts as the HQ for North Asia, and was where current APL president Kenneth Glenn was based prior to taking the top job back in Singapore last year. Arguably the Singapore line with the most diversified assets in China is the IMC Group. Founder Frank Tsao was born in Shanghai and it is in China that the group has made its largest investments in the past decade whether it be in property or shipping and shipyards. Zhoushan IMC�Yongyue Shipyard and Engineering Co is one of China's top repair sites with two graving docks of 300,000 dwt and 100,000 dwt. Further yards in Zhoushan and Dalian are also part of the IMC network. CSIC-IMC Shipping (Shanghai) Co, meanwhile, is a joint-venture between China Shipbuilding Industry Corporation (CSIC) and IMC focusing on domestic chemical shipping. IMC has port investments in Dalian and Lianyungang, while its jv with Cosco in Qingdao known as GACOSCO is one of the largest freight forwarders in Shandong province. It is also in Qingdao that IMC's shipmanagement division MSI has a strong presence. Few non-Chinese firms can boast such a broad set of investments as IMC. DrAGoN'S DeN Keppel opened its Nantong yard in 2007 Future planning S Singapore's yards have built their own facilities in China ingapore's shipyards have prepared for the future by investing overseas, not least in China. Sembawang Shipyard got the ball rolling in 1995 when it signed with China National Offshore Oil Corporation to take a 50% stake in a repair facility in Tianjin. Bohai Sembawang Shipyard opened in 1996 with two docks of 85,000 dwt capacity. It disposed its stake in the venture in 2003, but quickly latched onto another Chinese repair giant, Cosco Shipyard, in which it bought a 30% stake in 2004. Keppel Offshore & Marine, meanwhile, opened its wholly-owned subsidiary, Keppel Nantong Shipyard in Jiangsu province in 2007. Offshore support vessels and tugboats are the main offerings at the yard, which has a capacity to build up to 25 such vessels on its 16-hectare site. Significant recent orders include a $116m contract last September to build a heavylift sheerleg crane vessel for Asian Lift. Scheduled to be completed in the third quarter 2013, the 5,000-tonne floating crane will be the largest and most versatile heavy lift sheerleg crane vessel of its kind in the world. Finally there is ASL Marine, which has three yards in Asia -- in Singapore, Indonesia and China. Its Chinese facility in Guangdong province has recently been expanded and last year bagged an order for nine anchor handling towing/ supply vessels. SInoShIp SpRInG 2012 31 hUBS: ShAnGhAI Shanghai Port Version 4.0 A new port masterplan is in the offing. SinoShip speculates over what it might involve 80 Percentage share of teu 70 60 50 40 30 20 10 0 2005 2006 2007 2008 2009 2010 Source: Colliers International Waigaoqiao Yangshan Wusongkou CoNSTANT CHANGe Shanghai's alluring skyline ThE oThEr day a leading international shipping parts supplier contacted SinoShip seeking advice as where best to locate its planned storage facility in China's sprawling financial metropolis. This is no simple task. For all those who thought that perhaps 2010's sensational World Expo marked Shanghai as a completed city, think again. The chameleon that is Shanghai continues to change its spots, cranes soar, and even long-term residents can suffer a unique form of Chinese municipal Alzheimer's. No, you don't wake up every day looking for your wallet, but almost as disconcerting you spend much time double checking if you are indeed on the right street as countless changes prove hard to compute. Sources high up with in the city's port administration confide a new port masterplan will shortly be unveiled though they remain tight-lipped on specifics. SinoShip knows the port well enough to make some obvious assumptions on what might happen under Shanghai Port Version 4.0, as we might call it. 32 www.SInoShIp.oRG First, let's look at the numbers. Last year saw Shanghai become the first place in the world to handle more than 30m teu in a year. The port posted a 9.2% year-on-year rise in container handling volumes in 2011 to register 31.74m teu of boxes last year cementing its place as not just the world's largest port overall but also the world's largest container hub. In late 2008 the decision 4m teu in annual capacity. The city is desperate to up its transhipment credentials, something Busan and Ningbo are very strong on. Just 5% of Shanghai volumes are transhipment at the moment, and authorities want this to be 40%; the rub is the sheer breadth of facilities -- Yangshan, a pair of islands far out to sea technically speaking in Zhejiang province, Waigaoqiao, five phases spread far and wide 2011 saw Shanghai become the first place in the world to handle more than 30m teu in a year was taken to ease off expansion at Yangshan Deepwater Port as the global financial crisis kicked in. Last year, however, the National Development and Reform Commission greenlighted the start of the fourth phase of construction of the port to the southwest of downtown Shanghai, an expansion that will add 40% extra capacity to the facility, which is already operating at 15% above its initial design capacity. A total of $1.554bn will be spent on the project through to its completion in 2015, adding a further in the city, and old Wusong port -- the port of Shanghai really is three ports. Streamlining is needed and that is why over the years we have seen many incentives and directives for liners to call at Yangshan. With the World Expo Shanghai cleared out a large number of shipyards and small berths from the city centre. What is likely to happen in the next wave of consolidation is the most draught restricted terminals might face the axe. Shanghai Container Terminal (SCT) is the city's most central facility. A jv between SIPG, Cosco Pacific and Hutchison Port Holdings (HPH) on the Huangpu river at Wusong with a 1.7m teu capacity, the terminal was HPH's second ever mainland China venture after Zhuhai when it commenced in August 1993. Phase 1 of Waigaoqiao Container Terminal over in Pudong has basically the same shareholders as SCT. The threeberth site known as Shanghai Pudong International Container Terminals has a designed capacity of 450,000 teu. Both these facilities look very ripe for redevelopment. Waigaoqiao's future is very much domestic and intra-Asia, while Yangshan will serve longhaul destinations. "As the world's shipping industry ... faces economic uncertainties, Shanghai port, with its container traffic already at such a high level, has to stick to its innovation-driven model to blaze out a path toward sustainable growth," the city government said in a statement on its website in late December. This city never stops trail blazing it would seem. In the end, in case you were wondering, we told our parts supplier friend that anywhere around Baoshan was a safe area to invest in a building. It's where the new cruise terminal and the last phase of Waigaoqiao is located and traffic is better there too. Safe as houses, if such an expression can be used in Shanghai. hUBS: TAIpEI Transport victory Taipei correspondent Joshua Samuel Brown says the recent election success by Ma Ying-jeou is good for those involved in freight transport zones and tax free zones as factories." Taiwan's port industry transformed into corporate entities in March this year, aiming at increasing the competitiveness of work flexibility and customised service. "Taiwan has high quality manufacturing capabilities, if the added value of the product after processing is more than 35%, we can export them using Taiwanese brands -- Made in Taiwan -- to increase operating revenues," says Jao. Free Trade Zones in Keelung Port, Taipei Port, Taichung Port, Kaohsiung Port, Su-ao Port will be used to promote the development of Taiwan's international logistics chain. "We are making all these efforts to make sure Taiwan won't be left behind by other Asian countries and regions," the logistics chief asserts. In a further sign of better relations across the Taiwan Strait, Beijing-headquartered Cosco and Japan's K Line were linked in February as likely joint bidders for a stake in terminal six at the port of Kaohsiung in the first half of this year. Both Cosco and China Merchants have repeatedly been linked with investing in Kaohsiung, ever since November 2010 when Cosco named a new boxship Cosco Kaohsiung. Charitable will TaIwan's answEr To Warren Buffet in the philanthropy stakes, Chang Yung-fa, made waves in February with his decision to bequeath his entire wealth to charity, not to his five children. The founder of Evergreen, a renowned charity donor, is worth some $1.6bn according to last year's Forbes list. "Money is something that should be circulated around the world and not enjoyed exclusively by one individual," Chang said. "A lot of people think that earning a lot of money constitutes wealth. For me, working hard to earn a lot of money is certainly not a bad thing, but the happiness from earning a lot of money is fleeting because of the pain you feel when you lose it. "But if that money is used for good deeds, it's wonderful to see people get back on their feet because of the help you've given. The happiness gained from doing a good deed always remains in your heart," the tycoon said. Chang set up an eponymous foundation in 1985 with a focus on philanthropic efforts and in 2008 he launched the free magazine, Morals Monthly Digest, in response to what he felt was the moral decline of Taiwanese society. prEsIdEnT ma yIng-jEou's victory this January in the polls ensures his plans to revolutionise the whole freight transportation scene will go ahead while cross-strait ties will further thaw. US$10bn is being spent upgrading the airport in Taipei while the ports have been freed of their government regulatory shackles to act in a more market-orientated way. The government in Taipei has indicated that logistics is one of the most important industries to the economy and capital must be spent on infrastructure to remain competitive. Meanwhile, the island's airlines and shipping carriers are adding ever greater exposure to mainland markets. Jao Chih Ping, chief of the international logistics section at the Ministry of Transportation and Communications, tells SinoShip about the president's so called Golden Ten Years programme which promotes the transformation of Taiwan's industry through the competitiveness of the international sea and air gateways Taiwan's port industry transformed into corporate entities in March this year Ma has called for the "use of a `front shop' strategy," Jao explains, "which sees the seaports and airports as the so-called stores, and science parks, export processing Cosco and K Line are in a liner pact with Yang Ming which controls the rights to terminal six at Taiwan's top port in the south of the island. SInoShIp SpRInG 2012 33 By invitation only Enjoy freshly squeezed data and sizzling debate with your bacon and eggs at one of SinoShip's upcoming exclusive business breakfasts 17 May SinoShip Dry Bulk Business Breakfast Foreign Correspondents Club, Hong Kong SPONSORED BY: 23 May SinoShip LNG Business Breakfast Kerry Hotel, Pudong, Shanghai SPONSORED BY: For more details contact firstname.lastname@example.org hUBS: honG konG Chris Howse briGHT STAr The SAR is leading the way in Asia in tackling marine pollution Clear dialogue Hong Kong correspondent Alfred Romann hears about latest efforts to clean up the seas souThErn chIna has the highest concentration of container throughput to population in the world, with some 58m containers moving next to 35m people. With so much marine and land activity, keeping the waters clean is a massive challenge. Ocean stewardship is an increasingly important topic and was a big part of the biannual China Maritime Week, held in Hong Kong between February 27 and March 2. One event, the Clean Seas, Ships, Shores and Ports conference on March 1 focused specifically on the issue. "If we want Hong Kong waters to be a certain way, what do we need to do? What needs to happen next?" asks Matthew Flynn, managing director of Flynn Consulting and the organiser of the Clean Seas conference. The current focus of the industry is sustainability as opposed to corporate social responsibility -- finding ways to carry on doing business while limiting negative impacts on the environment. One example of this is the push towards using more cleaner-burning soluble fuels. Another is tackling the enormous amounts of plastic waste in waters around the world, even though only a fraction of it comes from marine industries -- shipowners are helping control plastic by checking their water filters and keeping track of the plastic take up. industry. Beyond finding new strategies to raise sustainability, the aim of the conference was also to raise awareness of what efforts there are to limit environmental impact. "There isn't too much recognition of what the industry has been doing and what the industry is doing," says Arthur Bowring, managing director of the Hong Kong Shipowners Association. Legal shakeup ThE dusT Is still settling on one of the most audacious breakaway moves seen in Hong Kong's legal community. Fully 50 staff including 15 lawyers left Reed Smith's Hong Kong arm at the end of last year to join newly established independent Hong Kong firm Howse Williams Bowers (HWB). HWB was established by Chris Howse, Chris Williams and Kevin Bowers and has been in operation since 1 January 2012. After one month the firm's number of employees had leapt to 66. And by year end the goal is to have 100 staff members. The majority of the 50 staff who jumped ship to the new firm had worked at Richards Butler's Hong Kong office prior to its merger with Reed Smith in 2008. Howse, a lawyer in Hong Kong since 1981, branded the 2008 sale of Richards Butler to Reed Smith as "a mistake". "We want to recreate Richards Butler Hong Kong," Howse told SinoShip. HWB is already the sixth largest independent law firm in the territory. A few years ago it was a great effort to get people to listen, but this has definitely changed "The marine industry doesn't cause a lot of the mess that is in the oceans. A lot of it is from landbased industries," says Flynn. "A few years ago it was a great effort to get people to listen, but this has definitely changed." In Hong Kong and China the topic is certainly relevant. Hong Kong companies control or manage nearly 10% of the total tonnage of ships in use around the world, so the city plays an important role in the Part of the problem is that the public doesn't know or doesn't care about what the role and impact that the shipping industry has on everyday life. "Shipping doesn't appear on people's consciousness but seafarers see the environment," he says. A recent study suggests ships emit some 32 different types of pollutants and the industry "is addressing most if not all of these," Bowring claims. SInoShIp SpRInG 2012 35 BookS Power shift Paul French reviews two of many recent tomes that discuss China's growing economic status dEspITE plEnTy of prophets of doom at the end of last year, the China story appears to be remaining compelling to plenty of people around the world; not least several of the Big Beasts in the analyst world. Against those that think that China's economy is about to run into serious trouble Jim O'Neill, chairman of Goldman Sachs Asset Management (and the man who gave the world the acronym BRICs) remains a staunch believer. His new book The Growth Map: Economic Opportunity in the BRICs and Beyond is massively upbeat, not just on China, but on Russia, Brazil and India too. O'Neill very strictly separates issues like human rights and press freedom from economic growth. He is also a firm believer that calling China (and India for that Still, there are issues. It is pretty much excepted by all economists now that countries with per capita incomes of over $10,000 a year rarely survive and prosper as authoritarian regimes, unless they are commodity strong (arguably this will save the "systems" in places like Russia and Kazakstan). The middle class becomes more demanding -- Russia is already at (on purchasing power parity terms) $15,000 but it has vast amounts of minerals, oil and gas revenues to dole out. China, at $7,500 and growing fast, has no such natural abundances to fall back on. Of course, Beijing might once again buck the trend and just power on growing without any change. But then again it might not and O'Neill doesn't really consider that scenario. China isn't an emerging market; it's a growth market matter) an "emerging market" is wrong-headed -- he prefers "growth markets". How else to explain the runaway success of fast growing consumer markets in countries like China and India that are rebalancing those economies away from merely being sweatshop economies or magnets for inward investment to more mature, self supporting economies? 36 www.SInoShIp.oRG Niigata University of Management professor Ivan Tselichtchev has certainly set out to produce an ambitious book in China Versus the West: The Global Power Shift of the 21st Century. Manufacturing, environment, finance, economics -- he tackles them all. Unless you've been living in an internet-free, TV-free, e-bookless cave for the last decade you don't need Tselichtchev to tell you there is a shift of power from West to East and that China manufactures a lot of stuff. However, Tselichtchev goes one step further and argues that China's economy may well be structurally and macro-economically stronger than most western countries. That's an argument that needs a lot of evidence. Does Tselichtchev justify his provocative statement? Well, he does and he doesn't. He certainly makes an argument for central control of key areas of economic policy and that China's mix of state-private capitalism can function and he does admit that one "advantage" is to live in a country that is a continental economy and can impose its own standards on outside competitors. China hasn't seriously "bumped" yet, but then we said that about southeast Asia before 1997. Many feel the debate has already moved significantly beyond where Tselichtchev leaves it. There is little mention of the Chinese inability to seriously innovate so far or the problem with falling rates of entrepreneurialism and private sector job creation -- these are both debates much discussed in China right now. Most worryingly perhaps, Tselichtchev bases much of his theory of China's pre-eminent role as a manufacturer and, as many others have written, that has been a product in large part of China's demographic `sweet spot', a sweet spot now receding after 34 years of the one-child policy. Manufacturing power is shifting -- to India, Bangladesh, Vietnam. Might not those strengths Tselichtchev attributes to China as a manufacturing power not be shifting too? As ever with predictions -- both O'Neill's and Tselichtchev's -- time will tell and we will see. opInIon How was it for you, dear? Surviving the latest shipping recession may well be dictated by how you survived the boom years, writes Bei Hong ThE lamborghInI now gathering dust in the car park seemed such a good idea at the time. A symbol of power and success, its outrageous styling reflected the outrageous amounts of money made in the heady days up until mid2008, when it seemed anyone who could use a telephone could become a shipbroker and have a mega-deal Midas touch. Now the simple task of issuing the monthly commission invoice has been replaced with the prospect of spending months in an arbitration as owners set about trying to find the charterer who hasn't paid for months. The answer "he was my classmate" just doesn't seem to carry much weight when the lawyer asks what due diligence on the counterparty was done before the fixture was concluded. As in all downturns and disputes, the only guaranteed winners are the lawyers. So perhaps the personality of the year at one of the numerous awards ceremonies which we can expect during the course of this year (although mercifully SinoShip has pledged not to host one) should be a young lawyer who, forsaking the glamour of the corporate finance department to slave away mastering the Hague Visby rules and other quirky elements of maritime law now finds himself the most indemand man in shipping, other than, of course, the banker who says he is still "open for business". companies realised they didn't need to control a large fleet to control freight costs -- the ego of shipowners and a sharp dose of Middle Eastern politics took care of that -- was one of the more memorable. The 21st century started with the Chinese shipbuilding industry setting out to become the biggest in the world, something which was achieved by 2010 and as usual with all things in China, that was well ahead of schedule. But was it such a good implemented at the peak of the market was of course the 400,000 dwt bulk carrier. The jury is still out on whether this was the ultimate example of hubris or a sound business decision, but somebody, somewhere seems to have forgotten to call someone important. Having been forced to ditch the sobriquet Chinamax for Valemax when a rather European `not in my backyard' approach was adopted by China, apparently fuelled by the country's shipowning interests, Vale's dream of a hugely efficient iron ore shipping `train' to its major market now looks in tatters. There is no denying the economic logic behind this fleet of mega ships, but the continued reliance of China -- at least for now -- on the `traditional' shipping industry to haul its iron ore imports is no doubt a relief to owners of conventional sized ships -- and may even prompt them back to the Chinese shipyards for some more. Oh dear -- do I sense the whole cycle starting again? SInoShIp SpRInG 2012 37 Lawyers now find themselves the most in-demand men in shipping It's the big `game changing' moves which seemed such a good thing at the time which are best remembered from the boom times. The rush to order supertankers in the `70s, culminating in the Seawise Giant, the largest moving object ever built by man, and a host of VLCCs which went straight from shipyard to lay up when the oil idea? Surely an ambition to be the most profitable and efficient shipbuilder would have been a more noble cause. As orders get cancelled, smaller shipyards face closure and shipbuilders change their business model to become owners of ships they built which nobody now wants, once again it's the lawyer who wins. Another `game changer' opInIon Down and out in Shanghai and Beijing Li Deng Bai reflects on the luxurious plight of many Chinese hit by the downturn In ThEsE lEan and turbulent times it is sometimes hard to recollect the extraordinary highs of the bull market that prompted my return from America to the mother country in 2006. Six years of trying to do marine finance in China has left me older, wiser, not much richer (although my shirt is still intact which is more than can be said for others) -- but with stories in abundance for when I finally heed my ageing mother's advice and go back to LA and the family business. In the middle of the last decade, to work here in China was to be in the heart of a kind of madness as the increasingly white-hot shipping market gave huge profits. I remember meeting a dry bulk executive who told me that his boss had flown their entire chartering and operations management team to have a meeting on a super yacht in Melbourne -- apparently the substantial bill was covered by the profits of less than one voyage in those days. If the operators were having it good I remember one Shanghai broker turning round to me on the golf course and saying he was making upwards of $200,000 commission for a single cape voyage and he was doing five a month. Million dollar bonuses were flowing and the Chinese shipping community was drowning in champagne, smart cars and the delights that high-end karaoke bars had to offer. On my end of the business I could have claimed permanent residence at Macau's Grand Lisboa given the amount of time and money I spent rolling out the red carpet for the new Asian shipping tycoons. The real drama happened not when times were good, but when the market went off a cliff in 2008 and the whole edifice came tumbling down. What was unforeseeable was how people reacted to the downturn. A good example was Pioneer Metals, the trading entity controlled by China's erstwhile iron ore princess Diana Chen. In early 2008 Chen was seen in Hong Kong at a dinner saying that she thought she would become the richest person in the world within five years. Always a woman with a great sense of herself, I will never forget attending a ship launching in Japan where she was the guest of honour. She had presumed somebody of her stature didn't need to worry about visas and was promptly detained at Narita. One spectacular tantrum later the shipyard managed to use its connections to get her in for the launching. When the wheels came off the world economy Pioneer Metals, this icon of Chinese trading success, suddenly found itself massively exposed in both physical and derivatives trading. According to reports both public and private Pioneer defaulted on huge FFA contracts that had gone against them as well as hundreds of millions owed to people like BHP for ore that was bought but never paid for. Later on, an article appeared in the press saying that the company had been wound up and at the time of closing it owned two minivans and about HK$5,500 in cash. One has to presume that Ms Chen has not been reduced to living in a minivan. Then there is the less than comic Grand China Logistics saga. Here's a real Chinese story of the post-reform era -- massive exuberant expenditure and investment by people convinced of their own propaganda that China will only keep on growing at lightning speed. In these days of European mega deficits and nationalised non-performing banks, people forget that China has had both banking system failures and deficits bigger than its GDP in the last 30 years on more than one occasion. Going out of business in China rarely seems to have a negative affect on one's lifestyle. One Nanjing-based operator, who went out of business on the back of bad FFA trades, is said to live in a luxury villa with bodyguards and Aston Martins at the front door. Indeed one of the directors of the erstwhile shipping major, Glory Wealth, is said to have taken to the decidedly super-rich sport of big game hunting in the wake of the collapse of that concern. Meanwhile, a playboy/failed owner in Hong Kong has recently tapped a European bourse to fund a couple of private jets. I can hardly complain; all this has served me well to be a periphery player in the greatest live show on earth. To work here in China was to be in the heart of a kind of madness 38 www.SInoShIp.oRG opInIon More flashes of inspiration needed Manish Singh argues China must innovate further as it climbs the ranks of international shipping In TErms of delivering innovations in a maritime context, China is no small contributor, with credits dating back a long way to the origins of some fundamental drivers such as the magnetic compass or the fore/aft sail rigs and even the early stern post rudders, to name a few. In recent times, China has emerged as a maritime powerhouse, with its prominence in global trade; its potential as a human resource pool and the seemingly inexhaustible infrastructural capacity. The shipbuilding programs of unprecedented scale that played a key role in propelling China as a globally strategic maritime destination are not faced with the realities of a stagnant demand market, which itself is heavily dependent on China's tremendous influence. Many global businesses are hoping to stimulate new demand in China through offerings that are being continually adopted for Chinese requirements. However, in the maritime context it is also the ability of Chinese industry to be able to stimulate new global demand that will see it sustain the growth it has achieved in recent years. With volumes shrinking or stagnant, it is technological innovation and the ability to develop and deliver new solutions on the global stage that will be crucial in sustaining the momentum gained through China's tremendous investment in its maritime sector. Some sceptics often associate adaptations of western innovation by Chinese businesses as being shanzhai or mere copycat innovation. Recent examples have made such sceptics re-think, given the pace at which such seemingly-copycat innovation has proven to rapidly adapt new technologies and bring them to market. This, however, has often been at the cost of improvising or improving the product through the experience in commercial use. Opinion may be divided as to how much this is true in the maritime context but there have been areas of improvement in build quality of vessel or components. Much of China's growth efforts were directed towards the prompt development of building capacity and associ- to development of associated clusters, there has been a lag as the Chinese maritime sector copes in developing the level of in-country expertise and extensive human resource needed to sustain such growth. In shipbuilding there's a sea change whereby the lower cost of operating vessels through the life of the asset is arguably going to take precedence over the lower cost of construction. Signs are evident that the Chinese industry recognises this and there are many examples where focus has been directed to green designs and The lower cost of operating vessels through the life of the asset is going to take precedence over the lower cost of construction ated infrastructure that helped deliver the bursting orderbooks and frenzied shipbuilding in the not too distant past. Chinese shipbuilders benefitted from structured and extensive investments in this sector and rapidly gained market share in the demand for standardised tonnage at lowest price. Where the market share grew on the back of extensive investment and policy support energy efficient vessels. This is where China might be able to gain quick ground, bringing new green solutions and technologies to market faster than others given the vast resource availability. Rampant shipbuilding in recent years saw a lot of resource moved from the repair and support sector to add to the building capacity. In the years to come, some of this resource will be available to be re-directed into driving innovative design and technologies and more sophisticated supply chains on the delivery side. In keeping with the development of technical capabilities, investments are also evident in the expansion of financial, commercial and educational capabilities. With a massive source pool to draw fresh talent from, China is in an enviable position to supply the human element to a chronically undersupplied global market. Here again some innovation is required in getting partnerships with reputed names from mature markets to accelerate the learning curve and development of local knowledge. High attrition rates in Chinese businesses also means that `non-wage' differentiation like a culture of innovation-fuelled growth will help retain talent. SInoShIp SpRInG 2012 39 phoTo FInISh HiGH FiVe Work nears completion on a 35,000 dwt bulker at Jiangmen Shipyard 35,000 dwt � Andr� eichman 40 www.SInoShIp.oRG phoTo FInISh SInoShIp SpRInG 2012 41 2012 www.sinoship.org SInoShIp 2012 I � 140 � � � � Modern, fuel efficient fleet portfolio � More than 140 vessels � 800 � � � � Lifting capacities up to 800 mt � Transport management and engineering � Global coverage, local presence � Tramp, affreightment, liner services � Own cranes and adjustable tweendecks � Handling of project- and break bulk cargoes BBC Chartering, Singapore Phone +65 6576 4130 email@example.com BBC Chartering, Shanghai Phone +86 21 6336 9901 firstname.lastname@example.org BBC Chartering, Leer Phone +49 491 9252090 email@example.com 3 4 7 8 1 1 1 3 1 4 1 6 1 7 -- BW, 23 22 -- 1 9 2 1 2 2 2 3 -- , 19 2 4 2 6 2 9 21 -- , 3 2 3 3 3 5 -- Bernhard Schulte, Rajaish Bajapee 25 3 6 3 7 Bei Hong 3 8 Li Deng Bai 3 9 Manish Singh 35 -- , Arthur Bowring -- , 33 1 SInoShIp 2012 SHIP OWNERS EVDI 70000 + firstname.lastname@example.org www.sinoship.org ASM Sam Chambers email@example.com firstname.lastname@example.org email@example.com Li Deng Bai Paul French Alfred Romann Mark Downing Joshua Samuel Brown 20 11 SinoShip SinoShip -- SinoShip -- 23BW Helmut Sohmen Li Dong, Bei Hong, Manish Singh Andr� Eichman, Basil Pao firstname.lastname@example.org 9701 116001 Grant Rowles email@example.com Tom Wu firstname.lastname@example.org SinoShip email@example.com www.sinoship.org firstname.lastname@example.org Asia Shipping Media, 83 Lorong N Telok Kurau #02-05, Singapore 425 265 Lamma Studio Design -www. sinoshipnews.com- LinkedInSinoShip China Shipping Network SinoShip SinoShip20124 100PDF SinoShip 500subs@sinoship. org � Asia Shipping Media Pte Ltd (ASM), 2012 Sam Chambers email@example.com SInoShIp 2012 3 -- Paul French " " � -- CPI 5% 3.5-4% -- 2010 25%2011 29% 5-10% -- iPod 30 "" -- "" 2012 GDP8.5% 10%" " 2012 -- 4 www.SInoShIp.org 16% IDEOCEAN Training & publications Knowledge Strategic advisory & consulting Performance IT enabled solutions & project management Ideocean services the marine, offshore, cruise, port and logistics industries and is driven by the vision of bringing together knowledge and capabilities to deliver solutions to our clientbase. Technologies www.ideoceangroup.com C M % ant r s. f 50 g Gr le fo ant /mc p n ni ab ci .sg ai il rti v Tr ava pa .go is le pa lib m ig w. w w e el Cambridge Academy of Transport Upcoming coUrses in singapore Anatomy of a Container Voyage 8�10 May 2012 Business of Shipping 14�18 May 2012 ORGANISED BY Cambridge Academy of Transport 48 Whittlesford Road, Little Shelford, Cambridge CB22 5EW Tel: +44 (0)1223 845242 Fax: +44 (0)1223 845582 Email: firstname.lastname@example.org Website: www.catz.co.uk Se F FutureShip Engineering fuel efficiency From assisting at the earliest stages of your newbuilding project to providing tools for your ships in operation, FutureShip is there with the right solutions to boost your ship's fuel efficiency and your bottom line. Get in touch and let FutureShip show you the ship of the future. FutureShip FutureShip Germanischer Lloyd (China) Co., Ltd. email@example.com www.futureship.de LNG 2014/2015 30,000 KC MaritimeChellaram 11 " " 20% (CMES)10 (VLCC) 4.6 CMES CMES 47213 VLCC 30 VLCC Yusuf AlirezaCEO20124 16 CEO Richard Elman Yusuf (GSBMT) GSBMT CEO" " CSD " "CSD90 CSD HMM Golden Ocean Tumac Oldendorff Norden OOCL 46 300 40 2 186,300 4,980 5,500 " 2012 " CSC Phoenix 2011 8.8 100% "2012 5060 " Cnooc Richard Elman SInoShIp 2012 7 2011 Sam Chambers 2008 2011 8 www.SInoShIp.org Clarkson 9.7% Clarkson 1,214 2010 48%Clarkson 58% 2011 2012 2012 CANSI 1,526 400 Ben Zhang 2015 50 George Xiradakis 30 47.7% 75% 2002 CANSI 201130% CANSI 1,526 30 Worldyards Matthew Flynn " " Clarkson Martin Stopford " "Stopford 5,500cgt 27 " "Stopford" " 35% 2 13 4,930 186,000 dwt 570 " 60% 70% "Stopford Stopford 2011 1,355cgt 481.6 920cgt 192 2020 " "Stopford "30 " " " S&S_Natural gas_PSV_1_2_032012 � www.rolls-royce.com SInoShIp 2012 9 M3 MARINE � � M3 MARINE � � � � � FMEA & � DP/DP Trials � IMCA CMID � � � / The only collaborative software solution to manage commercial chartering activities Chartering tools � Vessel Database � Brokers � Operators � Tanker � Dry Bulk � Containership � Chartering positions � Port library � Distance tables � Vessel Manager � Cargo Manager � Voyage Calculator... - - - Operators - - - - - - - - ... Sam Chambers OSV OSV M3 MarineCEO Mike Meade" 70% OSV"M3 50% UlsteinWartsila OSV "OSV OSV" GL Meade OSV Jaya OSV M3 Meade" 20%" BNB OSV 50% PSV AHTS 2011 12848 11429 PSVAHTS 27107 28127 PSV 2010204233 AHTS 202328 OSV OSV "OSV "GL OSV 50-80 SInoShIp 2012 11 20% OneofAsia'sLeadingShippingand OffshoreOilandGasLawFirms Give us a call to discuss how we can add real value to your business � in China or further afield: � � � � � � � � � Corporateadvisoryservices Mergersandacquisitions Rig,FPSO,andshipconstruction,sale,purchase,andfinance ForeigndirectinvestmentintoChina Disputeresolution,litigation,andarbitration Emergencyresponseandcasualtyinvestigation Corporatefinance Capitalmarkets,includingduallisting Taxation Yafeng Sun Partner, Shanghai Tel + 86 21 6339 0101 firstname.lastname@example.org Geir Sviggum Managing Partner, Shanghai Tel +86 21 6339 0101 email@example.com Wikborg Rein is an award winning* law firm with offices in Shanghai, Singapore, Oslo, Bergen, London and Kobe. For over forty years we have been at the forefront of developments in shipping and offshore oil and gas in Asia. We support our clients with local, English and Norwegian legal advice that focuses on commercial outcomes. * Lloyd's List Asia Maritime Law Firm of the Year 2011/2012 www.wr.no Sam Chambers 213 CDBDryships 18 1.2258 206,000 XRTC Business Consultants George Xiradakis " " PetrofinPetropoulos " " SInoShIp 2012 13 Lloyds Soci�t� General Deutsche Schiffsbank Petrofin Bank 90% " "Petrofin ReseachTed Petropoulos 20145,000 " " 2 Paul Chang 2010 10 50 2% SinoShip Mark Downing 60 1,200 1,000 Tommy Xiao 14 www.SInoShIp.org " " 2015-2016 2,800 20092012 135%700 11%2.88 60 1949 20103,710 62% 2,134 2030 1,000 1,000 400 100-300 "" "1" 2020 201010% 2010-2020 6,000 (COFCO 100 Will the Dragon deliver? The TradeWinds Shipping China conference, now in its 8th successful year, has always asked the tough questions and this year will cover both timely as well as timeless issues � from charter party disputes to banned VLOCs, the fate of shipyards to the liquidity conundrum. Important maritime professionals lined up to speak include: Don't take our word for it "It was a thoroughly enjoyable experience as well as extremely beneficial from a business standpoint." � Clarksons China "We found your conference very interesting and we are happy to have attended." � RINA "The content of the conference was very relevant and the papers of a very high quality." � Holman Fenwick Willan Robert LorenzMeyer, Owner & Managing Partner, Ernst Russ; Immediate Past President, BIMCO Anil Deshpande, CEO, Foresight Group Simon Liang, Chairman & CEO, Sinopacific Shipbuilding Group Wang Chun Lin, Executive Director, Pacific Basin Shipping David Wu, President, Grenland Group Asia PLUS: Sun Licheng, President, China Classification Society (CCS) � Vinay Patwardhan, Director of Group Planning & Development, Tai Chong Cheang Group (TCC) � Remi Eriksen, CEO, DNV Maritime and Oil & Gas � Mike Meade, CEO, M3 Marine � Bjorn Hojgaard, CEO, Univan Ship Management � Hsu Chih-Chien, President, Eddie Steamship / Courage Marine � Antoine Gustin, MD & Head � Export Finance, BNP Paribas � John Payne, Group Business Development Director, Hallin Marine � and many more... Have you RSVP-ed on Linkedin? Make sure you click "Attending" on our Linkedin page (tinyurl. com/Linkedin-SC12) so you can see who else will be at the 8th TradeWinds Shipping China � plan those crucial meetings beforehand! To see the full programme and who else will be participating at this event, visit the TradeWinds Shipping China 2012 page on www.nhstevents.com. Make sure you register early to avoid disappointment � this is the ONLY maritime conference you need to attend in China. For enquiries, please call Banu Kannu on +86 186 2136 0996 or email firstname.lastname@example.org. Sponsors Media partners Supporters Jason Jiang 1/3 2,500 6,000 2,000 1,000 800 4,400 8% 25%35% 800 16 www.SInoShIp.org " 15 " 0.3% (PFS Yida Logistics) Preferred Freezer Services (PFS) IT 2013 2011PFS PFS PFS Tim McLellan " " Costa Concordia Costa Concordia22 " " ," " Costa 40% Costa Costa 7.5 3-7 32 Costa " " 17 Costa SinoShip:"49 34Costa Concordia " 20 50 2014 SInoShIp 2012 17 A LEADING MARITIME FAIR IN NORTHEAST ASIA - 8TH INTERNATIONAL SHIPBUILDING, MARINE EQUIPMENT AND OFFSHORE ENGINEERING EXHIBITION FOR CHINA OCT 23 - 26, 2012, DALIAN, CHINA WWW.SHIPTEC.COM.CN 2012 JOIN US AND SHARE THE SHIPBUILDING & OFFSHORE GROWTH IN CHINA Official Show Organizer: Dalian Xinghai Exhibitions Co., Ltd. Tel: +86-411-3991-6904 / 3991-6903 / 3991-6911, E-mail: email@example.com UPS SinoShip " "" SITC SITC 10% SITC12 SITC 2004 2010 " "" 21 SITC UPS SITC UPS " -- " "" " " SITC SITC21 53 30% 50%SITC 2010 Your chance to reach the right audience This magazine is being read by every major shipowner across Greater China. Features in Issue Two include ship recycling and crewing. Contact firstname.lastname@example.org for advertising details SInoShIp 2012 19 SinoShip CEO SinoShip" " "" " "49 12040 2013 " 2012 " Crown 6363,500 dwt DY4001Crown 63218 22 13% EEDI Crown Ship "Crown Ship " Crown Ship 30% Crown Ship Crown Ship "" 2003 -- 12040 SInoShIp 2012 21 Katherine Si SSE 15 12 Bloomberg " 2020 " " " " "" " 628 15 40 - " " -- " "" " 40,000 50,000 "" 1 100 20% 400 20160/ 80300 200 """ " 15 22 www.SInoShIp.org BW"" BW (Dr Helmut Sohmen) 30 (World-Wide Shipping Agency ) Stephen PanSinoShip "" 72" " " "" " " " Pan SinoShip " """ Pan " "Pan (Grand China Logistics) 2014 100 " " 1970 1986 2003 Bergesen " " BW16 FPSO (LNG) " 2015 " LNG 45 2012 Pan Bw / 116 (LNG) (LPG) (FPSO) (World-Wide) 1955 1979 (Helmut Sohmen)72 19862003 BergesenBW (Andreas Sohmen-Pao) SInoShIp 2012 23 Katherine Si (CIC) 1,000 1730 6 2110~30 26 10 60%30 www.SInoShIp.org (CANSI) 2011 30 18 SinoShip:" 1423 30 4010 " CANSI 20112012 " 24 MTM Vijay Rangroo " "" "Rangroo "" Bernhard Schulte CEO Rajaish Bajapee " "" " CIC 2011 CIC 746 12%15 22%1998 6 1,000 "CANSI SinoShip 15% 45% CANSI 8,800teu 380 800 1230 " " 2011 201118.5 16%233 VLCCVLOC FPSO " " SinoShip" " 2012 SInoShIp 2012 25 1,000 Jason Jiang 26 UBM 72 6.2 20062,600 4,800 10% " " Wolfgang Harms www.SInoShIp.org 1949 20 61 50 2010 2020 5,000 201530% 2011361 300 7170 29 Brain Posey " " Clement Tan " " SInoShIp 2012 27 " " Harms" " Mui-Fong Goh "" Goh "" Goh" " Goh 1996PSA Sam Chambers 90 80 10 Bilateral trade ($bn) 6.4% 2011805 - 70 60 50 40 30 73.4 73.2 60.5 76.4 81.3 20 10 0 2007 2008 2009 2010 2011 2004 " " " " " " PSA 1996PSA -- " PSA"PSA CEO Ong Kim Pong " " 2002 PTP AIS 10 50 Patrick Phoon SSA " "Phoon SSA " ...... " -- 2009 China Navigation BW 28 www.SInoShIp.org Our readers include: Getting your message across in a language your clients can understand Sinoship APL10,000 "APL" 1 967 PIL 45 PIL 20 PIL10 15 PIL PIL PIL DSIC DSIC 67%15% 18%PIL NOL)APL APLAPL 1867 NOL NOL SITC 150 APL 200 1500 20109NOL -- 600 (Sinwa) 80 CEOMike Sim " " IMC 30 www.SInoShIp.org " " -- Philip Clausius CEO NOL46 1,800 APL Kenneth Glenn IMC() 300,000 dwt100,000 dwt IMC CSICIMC IMC (GACOSCO) IMC MSI IMC 2007 1995 50% 199685,000 dwt 2003 --2004 30% --2007 16 25 Asian Lift 1.162013 5,000 ASL / SInoShIp 2012 31 4.0 SinoShip 80 Percentage share of teu teu 70 60 50 40 30 20 10 0 2005 2006 2007 2008 Waigaoqiao Yangshan Wusongkou 2009 2010 Source: Colliers International SinoShip 2010 SinoShip 4.0 32 www.SInoShIp.org 3,000 9.22011 3,174 2008 5 40 �, -- (SIPG) Hutchison Port Holdings 170 19938 SCT 45 12 " ... " 3,000 40% 15 2015 15.54 400 (SCT) -- Joshua Samuel Brown "" "` '"Jao " `' `'" " 35% "Jao " " 201011 " " " " 16 " " " " " " 1985 2008 100 Jao Chih PingSinoship SInoShIp 2012 33 Posidonia 4-8 June 2012, Metropolitan Expo, Athens Greece A unique blend of business and social interactions at the heart of Shipping Be part of the great Posidonia experience at a state of the art new venue The International Shipping Exhibition Organisers: Posidonia Exhibitions SA, e-mail: email@example.com www.posidonia-events.com Chris Howse Alfred Romann 5,8003,500 22732 " "31 " ,"Flynn " 10% " " Arthur Bowring " Flynn Consulting Matthew Flynn" " " " 32 " " 15 50 Howse Williams BowersHWB HWBChris Howse Chris Williams Kevin Bowers20121 1 66 100 50 2008 Howse1981 2008 " " " "Howse SinoShipHWB SInoShIp 2012 35 Paul French Jim O' Neil O' Neil "" 10,000 "" -- 15,000 7,500 O' Neil Ivan Tselichtchev -- 21 Tselichtchev Tselichtchev Tselichtchev Tselichtchev "" ""1997 Tselichtchev Tselichtchev "" 34 Tselichtchev ? O' NeilTselichtchev 36 www.SInoShIp.org Bei Hong -- 2008 "" ( SinoShip ) "" "" 70 Seawise Giant (VLCC) -- "" 40 (NIMBY)Vale ChinamaxValemax Vale " " 21 2010 "" -- -- -- SInoShIp 2012 37 Li Deng Bai "" 2006 -- -- -- 200,000 2008 (Diana Chen) Pioneer Metals 2008 Klaveness Pioneer Metals Pioneer (FFA) BHP 5,500 -- (Grand China Logistics) -- 30 FFA � (Glory Wealth) / 38 www.SInoShIp.org Manish Singh / -- -- SInoShIp 2012 39 phoTo FInISh HiGH FiVe Work nears completion on a 35,000 dwt bulker at Jiangmen Shipyard 35,000 dwt � Andr� eichman 40 www.SInoShIp.oRG phoTo FInISh SInoShIp SpRInG 2012 41