“Restructuring” made Zhanjiang Port “Dancing”

Zhanjiang Port is developing by leaps and bounds. When it was at the crisis-ridden year 2008, Zhanjiang Port has achieved the goal of million tons big port successfully. A resplendent pearl is glinting in the port group of southwest China.

As the shortest voyage from Mainland China to South-Eastern Asia, Africa, Europe and Oceania, Zhanjiang Port introduced the Hong Kong Merchants International, successfully changed it into sino-foreign joint venture joint-stock enterprises by the end of 2007, and it has introduced Baosteel Group as the third largest shareholder in 2008. The introduction of “fresh blood” made Zhanjiang Port full of vigor, added enough horsepower for its internationalization.

“After the restructuring, we improved the profitability remarkably”

Journalist：The overall restructuring of Zhanjiang Port (Group) and the operating situation after the restructuring was paid close attention by the whole industry. Can you talk about that?
Zheng: In November 2007, Zhanjiang Port has finished the overall restructuring. The SASAC of Zhanjiang City funded according to the assessed net assets, buy a share at a price of 1.98 billion Yuan. The Hong Kong Merchants International funded 1.62 billion Yuan in cash. The SASAC of Zhanjiang City account for 55% share and Hong Kong Merchants International account for 45% share. By establishing a sino-foreign joint venture joint-stock port enterprise and modern enterprise system, by improving the corporate governance structure and completely stripped of the social function, the original state-owned Zhanjiang Port Group realized the diversification of the structure of property rights and the main part of investment.

Journalist：What’s the purpose of introducing Merchants International?
Zheng: Merchants International is a listed company which has mature experience in capital operation, while Zhanjiang Port just happens to be short in both talent and mechanism in this respect. We hope that the introducing of Merchants International could bring complementary advantages and innovative institutional mechanisms to Zhanjiang Port, listing as soon as possible, to accelerate the port to blend into the competition of international arena.
Last year, Zhanjiang Port Group introduced Baosteel Group by increasing capital and stock, made Baosteel Group the third largest shareholder of Zhanjiang Port Group, and further integrated the equity of the former Zhanjiang Port Group Co., Ltd, Optimized the structure of property rights and integrated inner resources.
The overall restructuring of enterprise is so successful that it has brought new advantages to our institutional mechanisms and made Zhanjiang Port Group a better shareholder structure. Not only has Zhanjiang Municipal People's Government who fully supports the development of Zhanjiang Port, but also Merchants International and Baosteel Group such shareholders worked as strategic partners. These shareholders are strong backings for group’s development, will consolidate and strengthen the leading position of Zhanjiang Port in the ports group of southwest China. Zhanjiang Port will become regional international shipping center and south huge port gradually.

Journalist：Are there any changes in Group effectiveness after restructuring?
Zheng: After restructuring, Zhanjiang Port Group deepened its internal reforms, innovated institutional mechanisms, paid attention to standardized operation of company, focused on management in company and strived for market out company, obtained significant breakthrough in reforming, operating and developing. Zhanjiang Port Group has completed the cargo throughput of 60 million tons in 2008, increased by 11.7% compared with 2007, achieved a net profit of 205 million Yuan. Profitability is improved remarkably, creating favorable conditions for company’s overall listing. Now, we have started the guidance job of listing, hoping we could become a listed port enterprise as soon as possible.

“No matter how large the vessels are, we can offer enough berth capacity.”

Journalist: Recently, the shipping industry is facing a huge challenge during the financial crisis. The competitions among ports are becoming fiercer than before. So, what is Zhanjiang port group going to do to develop core competitiveness?
Zheng: The financial crisis has brought a huge assault to the real economy. And as the reduction of the trade, the port enterprises are facing severe ordeals and challenges. For example, in the last November, our port’s throughput had reduced nearly 60%, the daily loading of freight wagons were only 300 plus, reduced 600 to 700 than before. However, after this spring festival, the loading starts to increase. At the beginning of this year during the meeting of the National People’s Congress, I said that the bulk shipping had been increased and the BDI index started to rise.
As the economy of every country has become more and more inseparable, the growing of international trade becomes persistent and the vessel are becoming lager and larger, the core competitiveness of the port has transferred gradually to be a large specialized port with deep waterway. Our Zhanjiang Port Group must carry out the strategy “larger, deeper, more specialized”. At present, we own the biggest 300-thousand-ton land-shore crude quay in China, the biggest 250-thousand-ton ore quay and the deepest 300-thousand-ton waterway in South China. Now, we have already begun to plan to build a 400-thousand-ton waterway. We are going to realize that no matter how large the vessels are, we can offer enough berth capacity. And this is the first step.
The second step, as the establishment of the China-ASEAN (association of the Southeast Asian Nations) free trade zone; the implementation of strategy of Development of Western Regions and “outlines of reforming and development of the Pearl River Delta”; the Luozhan Railway is being put into operation; the propelling of the project of Zhanjiang Steel Base and development of new project of harbor-related industries such as petrochemical industry, they brought huge space for development and gave us strong power. Zhanjiang port will take the service advantages, such as the deepest waterway in South China, the largest land-shore specialized crude quay and the large ore specialized quay, to exert the function as a area-central port and make us the hub port in South China and a main costal channel in the Southwest China.
Besides, in the process of realizing the long-term, coordinative and reasonable development，the development of economy in the backland is our important support, such as the development of the harbor-related industries, especially the bringing-in of large enterprises. Only when the local economy develops can the transiting of our port develop. We have been supporting our local government to develop the harbor-related industries and bonded logistics, and this can be a good base for us to create the core competitiveness.
Things above are only inflexible terms. To develop soft power is also important for us. Now, our port has begun to train and promote capable people, brought in the advanced idea and resource of China Merchants Group and Baoshan iron and steel plant to make our own team of talented people, to renew our system, to make the process of deciding more democratic and reasonable and to enhance our port’s competitiveness.

Journalist；Recently, many ports went to the backland to develop their dry ports intending to get more cargo. But it seems that the Zhanjiang port have not showed any big action in this field, can you tell me your idea and plan about this?
Zheng: Dry port is still a fresh idea until now. It expands the idea of door-to-door transportation and makes the factories, enterprises, the Customs, commodity inspection, the local economic administration and so on together. Its logistics function is to spread. I think dry port targets on the modern logistics, especially the container shipping, spreading the boned function from sea ports and river ports to inland. But considering the condition of Zhanjiang port, our port’s main cargo is bulk cargo. As for the container shipping market, the prospect of dry port is very good, although we are building our container terminal, we are not like Shanghai, Tianjin, Dalian, Qingdao which the container shipping is their main business. We will blend into the building of dry port after combining the condition and self-location of our port.

Factory behind harbor and harbor behind the factory

Journalist: Integration of Free Trade Zone and Port contributes to the development of the harbor and city economy harbor-related industry of Zhanjiang takes on a look of prosperity, Please talk about development of harbor-related industry and the trade and Investment promotion.
Zheng: In the recent years, Zhanjiang takes the advantage of large, deep, developing land and other resource, carry out the strategy of “Factory behind harbor and harbor behind the factory” , many domestic and overseas large powerful petroleum chemical corporation such as China National Petroleum Corporation, China petrochemical Corporation ,China National Offshore Oil Corporation, Russian Tashi Group race to invest in Zhanjiang market. one after another and Dali an Honing feeding protein Project, Leaning Fuhong soybean processing Project cargo logistics company, Sino harbor 1000tons sending coal center and transit 500000 tons Heavy traffic paving Petroleum asphalt settle in Zhanjiang, Zhanjiang gradually becomes harbor-related industry including heavy rendering, oil store, timber logistics, grain processing, coal delivery, which strongly push the harbor manufacture and city economic rapid development.
In order to fasten the development of Zhanjiang harbor construction, the government grants our corporation and Xishan Region to construct the harbor-related industrial area. The harbor-related industrial area of Zhanjiang belong to Province and administers Industrial develop zone, which total planning area is 40 square kilometers. And State Development and Reform Commission grand the initial 543 square kilometers develop area. The Industrial Park, backed by the modern logistics and emphasizing the modern logistics, is doing the best to become the center of the modern logistics. Nowadays, in industrial park, the second phase of evacuation of cargoes from port work is under construction and the railroad to industrial park is under planning construction. A lot of producing enterprises is working, processing enterprise is under planning construction many processing and logistics projects in industrial park in negotiations. Besides, Zhanjiang actively declares to construct bonded area logistics center.
　Development and environmental protection: Get both the” fish” and” bear paw”
Journalist: Nowadays, the ecological environment more and more attract the attention 
Zheng: I think the development of harbor, especially for development of modern harbor, the resource and the environment harmoniously develop, the effectiveness of operation and social benefits match each other which suit to the Strategy of sustainable Development. In the recent years, we emphasize the point of dealing with dust, elimination of noise, saving energy and reduce consumption, clearing on spot for anti-pollution and actively take part in all kinds of environmental management, in this way, we not only guarantee the rising volume of Cargo handling capacity of ports meanwhile keep the stable quality of the environment
In recent years,  project under construction, renovation or expansion strictly conform to the regulations of rate system of environmental influence　
To the much more break bulk cargo handling condition, we consistently increase the investment in environmental Protection and implement many technical renovations in order to solve the problem of the environmental protection.  For example, we invest about 23000000 to construct iron ore horizontally transportation system, over 30,000,000 in construct over 8 meters windproof wall around iron ore stock yard and implementing planting :planting  banyan around iron ore stock yard and 16000000 to renovate and expand plant of oil and water disposal
Now the country especially pays much attention to environmental protection, we have the social duty, if you have this consciousness, the contamination of the construction of port will become less endless.

Journalist: The central government has already decided to invest 4 thousand billion yuan to confront the economic crisis. What kind of role Zhanjiang Port will take in the building of the port? Moreover, what will take place in the following 3 to 5 years?
Zheng: Aiming at solving the difficulty which is brought by the economic crisis, the government came up with 4 solutions:” expanding the domestic need, keeping  the rising point, remain stable, as well as to insure the basic need of citizens”. Hence, it is a great opportunity for the development of ports. According to our plan for development, we will restart the project of rebuilding the port of Xiashan, Baoman, Donghaidao and the old port. Meanwhile, we will start the first project of container port in Baoxian, break cargo and oil port in Xiashan, general cargo port in Donghaidao. Moreover, we will reform Tianshundao to 300# berth and improve the inner passage.
Now, we’ve have a road of 90km, and we decided to expand the length. In order to catch up with the development, we will try our best to the build up the information system. No paper office will come true in the whole group by the means of OA, which will save the cost and make the work more efficient.
In the following 3-5 years, the group will invest 7 billion yuan and with an increase of 50 million tons of capability. Combining the ideas of deep harbor, port economic, modern logistics and port city, we will accomplish the division of the functions among important cargo like container, oil, coal, iron as well as port area and Logistics Park. Moreover, we will build a collecting and distributing center of a large mount of energy and materials to perfect the Bonded Area system so that the port will be more professional, bigger, and deeper. Strengthen and improve the importance of south China as the distribution and collection center as regards to oil, rice, coal, iron, chemical fertilizer and container.
What is important, we will devote to build Zhanjiang group as a well equipped, advanced managing, effective processing, civilizing, good to environment and modern harbor.