BANK OF CHINA, SICHUAN BRANCH VISIT NANTONG SHIPYARD
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As the global financial crisis triggered by the U.S sub-prime crisis, the domestics and international climate become ever complicated. What impact will it bring to our business partner-shipyards? How could the shipyards encounter the crisis? With all this questions, a team of 4 people from Bank of China, Sichuan Branch, together with managers our company came to the Nantong shipyard for site investigation and research.
Nov 19, 2008, was already “Lidong (means beginning of winter)” and about to be”xiaoxue(means light snow) in Chinese solar term. However, the shipyard in Nantong was still blessed with sunshine and warmth.
Upon arrival at shipyard, the Investigation Team visited the office buildings, workshops, slipways, and docks in progress. After that, A conference was held with shipyard leadership and related managers.
During the meeting, the CFO of the shipyards, Mr Cheng gave a detailed introduction of the operation status quo, the impact from the financial crisis and the measurements from the shipyard. Mr Cheng said, general speaking, the impact of the financial crisis to the ship-building industrial is both negative and positive. Negatively speaking, there are 3 major impacts: firstly, weakened passion and support from domestic banks, standby attitude; secondly, mounting difficulties in financing for ship owners overseas. Thirdly, ever growing wait-and-see attitude from ship owner. The ship owners aboard mainly took technical negotiations only, while business negotiations are delayed. Positively speaking, the current situation is favorable to the contracts already taking effective in 3 aspects: firstly, major raw materials like steels are price-discounted dramatically; secondly, the exchange rate for USD is generally stabilized; thirdly, the situation of worker scarcity is lessened. Come to the shipyard itself, Mr Cheng said proudly, thanks to company’s strategy of “get strong before get big”, Nantong Shipyard is well prepared for the slump market. Shipyard will take a series of measurements to live better rather than just survive from the crisis: first, strictly select ship owner and ship type of new orders with the rule of ship owner first, ship-type second, price last. Second, scientifically decrease the investment for fixed assets, purchase the need only, avoid over hypercritical; thirdly, strengthen management and inspection, make sure the production plan fulfilled punctually, in quality and in node. Up to now, the production of the shipyard is smoothly and orderly.
Though the on-the-spot investigation, the Bank of China expressed their increased confidence and appreciation for the concern from shipyard to the economical situation and responsibility in taking timely measurement.
