Guangzhou: China’s ship repair industry as a whole is facing tough times. Ship repair as a business has been in the doldrums for the past four years and overcapacity has crept in
Guangzhou Maritime Ship Engineering Management (GMSEM), a ship repairer and a subsidiary of China’s state-run shipping conglomerate, China Shipping Group, is looking to integrate its business to deal with the downturn in the industry.
Lai Li, general manager of the company, said the company is currently facing a lot of challenges from the downturn in the shipping industry.
“The problems in the shipping industry including overcapacity and low freight rates have not improved much this year, the rebound of the whole shipping industry is slow. As a company in the downstream of the shipping industry, our business is even more worsened due to the central government’s incentive policy to scrap old vessels and order new vessels,” Lai says.
“We are under huge pressure this year,” he says.
According to Lai, GMSEM had already predicted the current situation by the end of last year and had made plans to overcome the downturn.
“We have established a professional team to push forward the integration of two of our subsidiaries, Guangzhou Chengjia Ship Repair and Guangzhou Haifa Ship Engineering to improve our operational efficiency,” Lai sats.
“We has also been trying to establish strategic partnerships with more companies to expand our market,” he adds.
GMSEM has already secured partnerships with Jiangdu Shipyard, Cosco Bulk and Longxue Shipyard this year.
Lai says the company is also looking for business breakthroughs via a diversification into steel and coal trading, a path many shipyards in China have taken in the depths of the downturn. [02/12/14]