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Renjian Group: Heading overseas

Quanzhou: Renjian Group from China’s Fujian province is an integrated logistics service provider with businesses in ground logistics, shipping, warehousing, cold chain, and trading. It operates the largest container fleet in terms of capacity in the private domestic coastal container shipping sector and is now dipping its bows overseas with the first of potentially a number of international routes. It currently runs more than 70 container vessels totaling 850,000dwt.

Born in a fishing village in Fujian, the 36-year-old Guo Dongsheng, the president of Renjian Group as well as the president of Quanzhou Container Association, started Ansheng Shipping with his brother in 2002, using one old vessel left by their father, a shipping veteran in Fujian. The next year, the brothers established Antong Logistics and in 2005, they registered Renjian Group, which was named after their father, in Hong Kong and integrated Ansheng Shipping and Antong Logistics into the group.

“Ansheng Shipping and Antong Logistics are the cornerstones of the group,” says Guo.

With the integration of its shipping and logistics units which operate more than 4,500 vehicles and 350,000 sq m of warehousing space, Renjian is now able to offer customers door-to-door services.

“The intermodal transport is very competitive. We will expand our cooperations with trucking, warehousing and railway in the future, and greatly extend our coverage in China,” Guo says. In the meantime, the company is expanding its reach in project consultation and capital investment with the goal of becoming the best domestic logistics provider.

Despite his relatively young age for a shipping boss, Guo is a shrewd decision maker who believes cost structure is key to a company’s operations. “To change the cost structure, primarily the transport mode needs to be changed,” Guo says.

He and his brother made a vital decision in 2004 when they sold all of their bulk carriers and bought container vessels instead which has led to the success of the company today.

“The impact of the shipping crisis is still not over, if we just simply wait for the market to get better, the network we have built might be eroded slowly but turning crisis into opportunities is our right choice in this environment. We have been expanding our domestic network and opening new route services. It’s very difficult to be a leader in prosperous times,” Guo says, adding that the return on investment might be doubled in recession times.

Under a new round of fleet expansion, Renjian has made an order for ten 2400 teu vessels at Taizhou Sanfu Shipbuilding in the fourth quarter of 2013. Total investment on the vessels is RMB2bn. “The order is based on our discreet analysis of statistics on the domestic shipping market, and these high-tech vessels will lower the fuel consumption by 30% and will better serve the demands from ports and our operations,” Guo maintains.

In December, Renjian also commenced operation of its first international shipping route from Haikou to Ho Chi Minh City in Vietnam. Renjian plans to invest RMB3bn in the next five years in Haikou to expand its presence in the city including spending RMB860m to build a regional operations headquarters. Antong Logistics completed a volume of 450,000t eu at Haikou Port last year, which accounts for about 44% of the port’s annual container throughput.

“Haikou is a gateway port to both Beibu Gulf and ASEAN, we will increase our total throughput at Haikou Port by 30% each year, and a lot of our new vessels will be registered at the port,” Guo says.  [27/01/14]

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