Mai Boliang: Creating the Global Myth of “MADE IN CHINA”

Editor’s Note: 2006 Performance Evaluation Report on Listed Ports and Shipping Companies, jointly composed by Shippingchina.com and World Economy Research Institute of Dalian Maritime University, had come out. In this report, an overall evaluation on the performance of 24 Chinese ports and shipping companies listed in the A-stock market has been made according to the international accounting standard. These 24 listed companies display a total of four stock performance modes: Leading Stock, Blue Chip, Potential Stock and Risky Stock.
This issue of “First Dialogue” will be related to a leading stock performer: China International Marine Containers (Group) Co., Ltd (CIMC). In 2006, CIMC achieved sales revenue of RMB33.168 billion with its total profit being four times of the average profit of the whole shipping industry. Its net profit reached up to RMB2.772 billion, accounting for 8.35% of the total sales revenue and also being four times of the average net profit of the shipping industry. Its distributable profit for shareholders reached RMB2.756 billion, being 4.3 times of the average value of the whole industry, fully guaranteed shareholders’ interests. Such sound performance made CIMC being rated as Leading Stock.
　  Now the focus turns to the operator of this leading stock, who has created a global myth of “MADE IN CHINA” by holding strong wills. He is the president of CIMC, MAI Boliang.    

                         Mai Boliang: Creating the Global Myth of “MADE IN CHINA”
                                                             --Interview to Mai Boliang, President of CIMC

Mai Boliang, the creator of the “MADE IN CHINA” global myth, is the NO.1 in the international container industry, and is the leading strategist in equity reform.
By showing the concrete power of CIMC, Mai has rewritten the humiliating equation “MADE IN CHINA = Low quality + Low price.” Under his leadership, CIMC has grown to the only company covering production of the whole container series in the world and become distinguished in the global market by low cost and highly added value of its products.   
Mai has forged CIMC to be the Chinese pioneer by 16 years’ hard training. Over these years, CIMC has carried out a series of merging & acquisition activities successfully. Consequently it has occupied over 50% of the international container market and it takes the first place in the international market continually for 11 years.    
Mai has successfully manipulated the special corporate governance structure that is featured by mutual check and balance of two shareholders, COSCO Group and China Merchant Group. This “CIMC equity mode” has strongly ensured CIMC to make objective decisions and is interpreted as the new concept in China’s equity reform.
Mai is endeavored to provide equipment and service to modern transportation. CIMC has made achievements in road transport vehicles, tank equipment and airport equipment. It is preparing to develop services including trains, shipment, port equipment and shipping equipment. The future CIMC will take leadership in several products. “MADE IN CHINA” will become the pride of all the people in China and abroad.
　　
　　 Steering CIMC: Making a World-Class Enterprise

Mai is one of the first-generation engineers in the Chinese container industry. He began to work in CIMC as a technician in Group since his graduation from college. With remarkable achievement and perseverance, he made rapid progress and entered into panel of leaders. In 1992, Mai was appointed as the General Manager of his company. Under his leadership, CIMC, once a small factory closing to bankruptcy, grows to be a primarily world-class Chinese enterprise.     
Jointly established by China Merchants Hong Kong and East Asiatic Company (EAC) in Denmark in January 1980, CIMC is the first factory specialized in container production and one of the first joint ventures in China. In 1982, CIMC gave birth to its first container. However, due to insufficient managerial experience of joint venture and the stagnant market, the company was on the edge of bankruptcy. In 1986, the production was stopped and the personnel were dismissed.  
In 1980s, there were only more than 20 container producers in China. Attracted by the high profit and low threshold of the container industry, CIMC restructured itself to be a three-party joint venture with COSCO Group, EAC and China Merchants LTD in 1987. However, CIMC remained to be a small factory with its annual output less than 10000 TEU until 1990.    
In 1992, Mai began to take leadership in CIMC. Predicting that the container industry will shift its focus to China, he was determined to grasp this historical opportunity and carried out a series of merging & acquisition activities. In 1994, CIMC successfully launched its stock on Shenzhen Securities Exchange and the collected capitals were used in merging the competitors. In that period when the container industry is in its wave trough, many competitors of CIMC struggled to make a life, which provided chances for CIMC’s large-scale merging & acquisition activities.   
　　By now, CIMC has established more than 20 production bases in some Chinese economic zones including Pearle Triangle Zone, Yangtze Triangle Zone, Bohai Sea Economic Zone and so on. CIMC has formed an all-around manufacturing & supplying framework covering all the Chinese ports. It is the only company engaged in container production and service with autonomous Intellectual Property. It is the only company able to prove a whole series of container products. Now it has more than 40 wholly owned or stock-holding subsidiaries with 50 thousand employees. In the past 11 years since 1996, CIMC continuously takes the first place both in production and sales pf container products in the whole world.  
Mai is always dedicated to make CIMC to be an “International Enterprise” responsible for the society, the nation, the industry, shareholders and employees. Through his courageous innovation and persistent effort, CIMC has won recognition from all walks of life. Now CIMC has become a blue-chip stock model for Chinese listed companies. It is awarded the title “Top 50 Chinese Listed Companies” continuously for 7 years and for and is rated to be Leading stock by 2006 Performance Evaluation Report on Listed Port and Shipping Companies. In 2006, CIMC is awarded as “CCTV 2005 Most Valuable Chinese Listed Company”. It ranked NO.3 of 2005 Top 100 Competitiveness of Chinese Listed Company. It ranks NO.28 of Top 500 Most Valuable Brand in China with its brand value being RMB21.25 billion.
　 　Managing CIMC: Listed on the Domestic Market, Mutual Check and Balance of Two Main Shareholders, Leading Stock
Chinese listed company is usually invested by a large shareholder and several small shareholders. And the key decisions of a company are made by the large shareholder. Wrong decisions made by the large shareholder may result in great loss and cause adverse impact.
In recent years, some listed companied began to adopt the independent director policy to make decisions scientifically. That is, the board of directors of a company is composed of a large shareholder and several independent directors, and independent directors constitute the majority in the board of directors.
CIMC adopts a unique corporate governance structure, in which the equity is held by two state-owned shareholders (COSCO Group and China Merchants Hong Kong) equally. This mutual check and balance exerts in-depth influence on the development of CIMC. According to Mai, scientific decisions and incentives are crucial to the sustainable and healthy development of a company. The greatest benefit brought by this equal equity allocation is scientific decisions to be made. Why? Under this mechanism, the proposals made by one of the two shareholders should be agreed by over half of the directors.   
This corporate governance structure of CIMC has become the modal for Chinese listed companies and is interpreted as a new concept for Chinese equity reform.
CIMC also distinguishes itself in its practice of “Listing as a whole”. In addition to being wholly listed, it is also one of the few number of shipping companies listed in the A-stock market. Many Chinese corporate groups usually make only one of its subsidiaries listed so as to avoid the risk of the capital market or to balance the interests of all parties. Recently, Yingkou port’s “Listing as a whole” plan was opposed by many small shareholders and this plan was announced to be failure finally.
In 2006, CIMC realized distributable profit of RMB2.756 billion for shareholders, being 4.3 times of the average value of the whole industry. This achievement fully guaranteed shareholders’ interests and removed the worries of those people who doubted that “Listing as a whole” may reduce the shareholder profit.
There is one strange phenomenon in the Chinese shipping industry, that is, the shipping companies usually choose to be listed in the overseas market or H-stock market. By the end of the Year 2006, there are only 13 shipping companies being listed in the A-stock market either in Shanghai or in Shenzhen. CIMC, ranking first in the global container industry, takes lead among the 13 companies. With its solid power, CIMC achieved sales revenue of RMB33.168 billion with its total profit being four times of the average profit of the whole shipping industry.  
CIMC proves by facts that the full capitalization model with “Listing as a whole” is very feasible. Being listed in the A-stock market and taking powerful civil capital flow as the base, CIMC can realize virtuous circle and maximize its benefit. China calls for all the port and shipping companies to be listed in the domestic stock market to make more contributions to China’s reform and open-up endeavor and modernization drive.  
　　 Developing CIMC: Providing Equipment and Service to Modern Transportation
Under the leadership of Mai, CIMC is endeavored to provide equipment and service to modern transportation. CIMC has made achievements in road transport vehicles, tank equipment and airport equipment. It is preparing to develop services including trains, shipment, port equipment and shipping equipment.
The main business of CIMC is the container production. With more than 20 production bases in the Southern China, Eastern China and Northern China, its products cover dry van, reefer, and various special containers. CIMC is the largest container production group manufacturing a full series of containers in the world. Its customers include the most well-known shipping companies and container-renting companies, and its products can be found in the main international logistic systems in North America, Europe and Asia. CIMC has established its world-class status in the world container industry.   
Road transportation vehicles constitute the key business of CIMC presently. By taking its advantages in managerial expertise, technology, brand name and scale, CIMC has integrated the industry resources to achieve scale expanding by means of merging & acquisition and investment since 2002. It has built up 15 production bases covering North America, Northeast China, North China, East China, South China, Middle China, and Northwest China, and has formed CIMC’s own sales service network covering central Chinese cities including Beijing, Shanghai, Tianjin, Guangzhou, Shenzhen, Xiamen, Ningbo and Fuyang. It has formed the industry layout of Sino-American interaction, reasonable distribution and mutual support and its annual vehicle production capacity is over 120,000 units.
Tank equipment is the modern logistic equipment specialized for the industries of petrol chemical, beverages and food. Specifically, it includes tank containers, tank road vehicles and static tanks. Presently, CIMC commits to build up global operation platform of tank equipments business, fostering new ability, enriching product line, and exploring more mainstream products with global competitive advantages in this field.
The airport equipment business of CIMC mainly covers passenger boarding bridge, automatic air cargo handling system, and automatic parking system. CIMC's passenger boarding bridge has entered into over 10 international markets, including North America, Europe, Africa, Southeast Asia, and etc. CIMC has produced the passenger boarding bridge of A380 - the biggest plane in the world – for Charles de Gaulle International Airport in France. Meanwhile, CIMC is the first manufacturer of the boarding bridge for ships in China.
CIMC will make use of new technologies and skills to develop key projects on environment protection, resource conservation and intellectualization. These projects include comprehensive electricity-saving reconstruction, waste paint & gas treatment, environment-friendly wooden floor, green paint and vehicle lightening design. CIMC has participated in the R & D of SSC (Smart and Secure Container), and has made encouraging progress, which will make CIMC develop healthily in directions of environment protection, safety, energy saving, intellectualization, efficient earth utility and professional hygiene. 

　　The future CIMC will take leadership in several products and “MADE IN CHINA” will become the pride of all the people both in China and abroad.