Ningbo Marine: Fighting to return to profit

Ningbo: One of China’s larger coastal bulker owners is taking a very cautious approach to business. Ningbo Marine, which was taken over last year by utility firm Zhejiang Energy, has been slimming its fleet this year as it battles to get back into the black. Ningbo Marine reported a net loss of RMB22.43m in the first half of this year. The fleet today stands at 19 vessels equating to 913,000 dwt.

Chu Min, the president of the shipping line since 2003, says the company’s “primary strategy” is to sign COA deals with major clients. Since Zhejiang Energy became the controlling shareholder, this has in turn brought plenty more COA deals, helping keep the fleet more busy.

“Currently the company is trying to develop short shipping routes on the Yangtze River and Bohai Rim,” says Chu.

“At present, the shipping market is still not very optimistic,” he admits, adding: “The domestic economy is still growing slowly, the manufacturing industry is also affected which has led to the decreasing consumption of industrial electricity, thus the shipping volume of our main cargo, coal, is also decreasing.”

China’s coastal business is very tough at the moment. China's coastal shipping sector slumped to a historic low in the first half, and is unlikely to see any improvement in the second half, according to a release by the Ministry of Transport (MOT) earlier this month.

Weak demand, excessive capacity and the overall depression in the international shipping sector are major reasons for the decline, and some small shipping companies may get phased out in the second half due to limited capital, MOT said.

"Some ships that used to focus on international routes may turn to coastal routes, making the coastal shipping sector worse," an official from the ministry said.

Chu says the company is trying to get through the difficulties by expanding its ship chartering business, actively seeking financing, optimizing its fleet structure and forging more strategic cooperations.  [30/08/13]

 

NEED TO KNOW:  Ningbo Marine
Founded in 2002 as a state run entity focusing on the coastal trades, primarily coal. Taken over last year by private utility firm, Zhejiang Energy. Continues to post losses, but has staunched the red ink in recent months, by slim lining the fleet, with older tonnage offloaded. Current fleet size is 19 ships equating to 913,000 dwt.

Related Posts