Shanghai: Zhenhua Shipping used to have it all so easy. Anyone who has hung around a developing container terminal long enough is likely to have seen one of Zhenhua’s ships over the year carrying giant cranes.
Zhenhua Shipping is the subsidiary of Shanghai Zhenhua Heavy Industries, better known as ZPMC, the world’s dominant port equipment manufacturer.
The line, established in 1996, grew in tandem with the exponential growth in container terminals across the world seen in the previous decade. However, the very best days of such growth are now in the past, which has meant Zhenhua Shipping has had to transform and offer its services to third parties.
Traditional port machinery orders have dropped sharply in the past two years, and ZPMC only just managed to claw its way back into profit in 2013 following huge losses in previous years.
Due to the fluctuation of the parent company’s business, Zhenhua Shipping, which was only focused on internal business, has been forced to make adjustments.
“For a long time in the past, we didn’t think much of the need to change, but now in this depressed market situation, we have to go to the open market and join the competition,” says Chen Bin, general manager of Zhenhua Shipping.
“In order to enter this new market and face new demands, both the structure and scale of the fleet need to be adjusted. The expansion of capacity is unavoidable, but the new capacity has to be efficiently matched with market demand. The company will spend about three years to adjust the fleet structure and further enhance operating levels,” Chen says.
“There is still profit margins for project cargo shipping, we will remain at a relatively stable developing status in the future and strengthen our advantages to add competitiveness in the market. We are now at the stage of accumulation, and what we need is to find the breakthrough point,” Chen adds.
Currently Zhenhua Shipping runs 23 vessels in its fleet. Among clients are big names such as Hutchison Whampoa, Hyundai Heavy Industries, Doosan Heavy Industries, Mitsubishi Heavy Industries and Yantai Raffles. [28/02/14]