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China’s trade boom and building frenzy of ports help home-grown producers corner the world market of containers and cranes

  • Shanghai Zhenhua Heavy Industries now exports quay cranes, gantry cranes to more than 300 ports in 100 countries, with 70 per cent of the global market
  • China International Marine Containers Group (CIMC), took a little more than a decade to become the world’s largest maker of shipping containers
Quay cranes along a berth at the Yangshan deep-water port in Shanghai on September 14, 2011. Shanghai Zhenhua Heavy Machineries, established in 1992, has grown along with the explosive development of China’s ports to control 70 per cent of the global market for cranes, loaders and lifting equipment used in ports. Photo: Xinhua
Quay cranes along a berth at the Yangshan deep-water port in Shanghai on September 14, 2011. Shanghai Zhenhua Heavy Machineries, established in 1992, has grown along with the explosive development of China’s ports to control 70 per cent of the global market for cranes, loaders and lifting equipment used in ports. Photo: Xinhua
The explosive growth of China’s container ports has turned one of the most important vendors in shipping into a best-in-class industry leader, whose cranes can now be found in 300 wharves in 100 countries, with 70 per cent of the global market share.
Shanghai Zhenhua Heavy Industries, a unit of China’s state-run construction behemoth China Communications Construction Company, makes quay cranes, gantry cranes, loaders and stackers used for loading and unloading shipping containers. It also developed the infrastructure for the automated berths in Phase IV of Shanghai’s Yangshan port, and in Qingdao.
Its net profit jumped 47.6 per cent last year to 443 million yuan, while sales was little changed at 21.8 billion yuan (US$3.25 billion).

“It is a major showcase of China’s manufacturing capability,” said Sun Can, a Chuancai Securities analyst. “The company has its own technologies and is a powerful player in the global port machinery industry.”

Why China now has six of the world’s 10 busiest container ports
Established in 1992, the company was formerly known as Zhenhua Port Machinery for its speciality in making lifting equipment on the harbourfront. Taking advantage of China’s low wages, Zhenhua quickly carved out a big chunk of the global market share by selling machines at lower prices than its competitors.
The company’s former chief executive Guan Tongxian, a confessed workaholic known for his hard-driving working ethic, retired at the age of 76 in 2009, the same year that the company renamed itself to reflect its forays into marine transport and installations, as well as the construction of special steel structures including the Las Vegas Ferris wheel, the San Francisco-Oakland Bay Bridge and Norway’s Hardangerfjord bridge.
Rows of gantry cranes standing along the Huangpu River in Shanghai on 26 June 2002. A consortium of Chinese domestic banks provided a 17 billion yuan (US$2 billion) credit line toward the construction of Shanghai's Yangshan deep-sea container port. Photo: AFP
Rows of gantry cranes standing along the Huangpu River in Shanghai on 26 June 2002. A consortium of Chinese domestic banks provided a 17 billion yuan (US$2 billion) credit line toward the construction of Shanghai’s Yangshan deep-sea container port. Photo: AFP

Listed on the Shanghai exchange in 1997, Zhenhua’s shares have risen 41 per cent in the past 12 months, ending 2.1 per cent lower at 4.46 yuan on Friday. All three analysts who cover the stock recommend their clients either “buy” or “accumulate” the stock, expecting Zhenhua to be a major winner in China’s megaplan to build infrastructure along the old Silk Road in its Belt and Road Initiative (BRI).

Another major company that has emerged with China’s rising tide was China International Marine Containers (Group), or CIMC, a unit of the state-run conglomerate China Merchants Group. Established in 1980, the company took a little more than a decade to dominate the global industry, becoming the world’s largest maker of shipping containers since 1996.

Visitors look at rows of containers at the Yangshan deep water port in Shanghai on April 6, 2006. Photo: AP
Visitors look at rows of containers at the Yangshan deep water port in Shanghai on April 6, 2006. Photo: AP

Guosen Securities said in a research report that CIMC would face lower profit margin this year amid rising raw material costs and fiercer competition from global rivals.

Its shares have risen 43.7 per cent in the past 12 months on the Shenzhen exchange to 15.20 yuan as of Friday.

Source: SCMP

Posted on 13/04/2019 at 10:27 in Belt and Road Initiative (BRI), building frenzy, Chief Executive, China alert, China International Marine Containers Group (CIMC), containers, cranes, gantry cranes, Guan Tongxian, Hardangerfjord bridge, Huangpu River, International Marine Containers (Group), Las Vegas Ferris wheel, Norway, ports, Qingdao, quay cranes, San Francisco-Oakland Bay Bridge, Shanghai, Shanghai Zhenhua Heavy Industries, Shenzhen exchange, shipping containers, Silk Road, trade boom, Uncategorized, wharves, workaholic, world market, Yangshan deep-water port, Yangshan port, Zhenhua Port Machinery   |  RSS feed |   Reply   |   Trackback URL

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