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Hangmin Shipping: Fleet optimisation time

Hangzhou: Hangzhou-based Zhejiang Hangmin Group, a large scale multi-sector enterprise primarily engaged in the businesses of printing, textiles, electric power and coal trading, also runs a shipowning subsidiary called Hangmin Shipping, which is dedicated to coal and ore shipping business in the domestic coastal, Yangtze and Pearl River markets. The company currently operates three bulk carriers with a total capacity of 65,800 dwt.

Zhu Chongqing, president of the group, started a small printing textile factory in Hangmin village near Hangzhou in 1979, and the factory has grown into the current Shanghai-listed Hangmin Group, a vast sprawling conglomerate.

Zhu, also the head of Hangmin village, has been leading the development of the village and has transformed it into one of the richest villages in China, with factories in various sectors including textile, electric power, gold processing, metal production and sewage treatment.

Zhu says shipping is a critical segment of the group’s multi-sector business and it create synergies for the group’s supply chain.

“With the establishment of the shipping business, we have completed and activated our whole supply chain,” Zhu says.

Hangmin Shipping was established in 2008 by Hangmin Group and Shenzhen Bolian Industry, with Hangmin Group gaining full control of Hangmin Shipping in 2013.

Zhu explains that the large production facility of the group is supported by the electric power plant it operates, while the plant is also supported by its coal trading and shipping business.

Zhu admits the shipping business is suffering losses due to the continued recession in the bulk shipping market. Hangmin Shipping suffered a net loss of RMB15.44m last year.

“We are making efforts and trying to make Hangmin Shipping return to profit, but I think it is not easy to accomplish in the short term,” Zhu says.

Zhu thinks the overcapacity in the domestic coal market and the declining coal price has worsened the bulk shipping market. Currently about 80% of the coalmines in China are suffering losses.

However, Zhu is not a pessimist. He says Hangmin Shipping is doing research on the shipping market, newbuild market and scrapping market, and preparing to optimise its fleet in order to better meet market demands. Hangmin Group is also in negotiations to acquire some coalmine assets to boost its coal trading business and also to support the shipping business.

Zhu reckons the recession times in the market is also a good time to invest, and to target the right asset is crucial. “On the premise of controllable risk, we are always willing to make investments in order to gain new growth points,” Zhu adds.

He also claims that the domestic coastal coal shipping market has been showing signs of recovery from April, with rates slightly improving recently.


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