A Visit to Pingsha Yacht Park, China Jianglong Shipbuilding
HONG KONG, July 31 /PRNewswire-Asia/ -- The ominous shadow of the global economic slump is far from dissipated and the global yacht industry is still suffering. In Europe and the US where yacht penetration is relatively high, the market has been hit hard due to the drastically reduced personal income of target customer groups. Many yacht companies are running deficits, while some brands were acquired or went bust due to insolvencies.
Amid the same crisis China's yacht makers are doing something different.
Jianglong Shipbuilding Company, one of the biggest fiberglass shipbuilders in China, has maintained its sales growth amid the global slump, as their orders have swelled. In order to expand production capacity and explore new product lines, Jianglong launched construction projects for plants, dormitories and office buildings in January 2009. When completed, the new compound will double their current production capacity.
So why is Jianglong Shipbuilding Company undaunted by the crisis, and how is it seizing the opportunity to expand capacities?
Fairtheworld.com visited Chief Executive of Jianglong Shipbuilding Company, Zhiqing Yan, and learned that the company enjoys a stable market share in China, which has shielded it from the impact of the recession. Jianglong's export orders are mainly in the form of business ships, with customers from strong financial backgrounds, therefore their orders are unscathed. The financial crisis is giving Jianglong a leg-up in expanding its business, absorbing talent and exploring new marketing opportunities.
Mr. Zhiqing Yan's comments have shed light on the national shipbuilder's latest developments amid the crisis, and they give foreign investors access to the latest development of China's shipbuilding industry. We have condensed the interview to provide a brief analysis of Jianglong.
Taping domestic market, selling abroad
Jianglong possesses a rich production line that ranges from passenger ships, business yachts, leisure yachts to fishing boats, covering most models of fiberglass ships. Over more than one decade's operation, it has come to occupy a stable market share in China. Jianglong ships have dotted waterways across the country, serving customers from government agencies, passenger travel agencies to tourism attractions.
The financial meltdown has had only a mild effect on Jianglong. At the end of 2008, the Chinese government initiated a 4 trillion RMB stimulus package; then in early 2009, the government launched a plan to revitalize ten key industries, including the shipbuilding industry. Old ships of various kinds are being upgraded ahead of schedule and new shipbuilding plans are rolling out. Jianglong has absorbed a large amount of orders that have help to boost their sales even amid this financial crisis.
On the other hand, even Jianglong's exports, which mainly focus on various business ships and patrol ships, as featured by the five offshore patrol yachts built for Angola Fishing, remain stable and relatively unscathed.
Jianglong has seized a stable market share in the domestic fiberglass shipbuilding arena; this is particularly important amid the global slump. Jianglong started construction on a new plant in January 2009 that will double its production capacity when completed. In some ways, the crisis has even helped Jianglong. Under the current extraordinary circumstance, Jianglong is able to enter foreign markets with strong financial resources supported by domestic sales, and exploit opportunities to develop high-tech, high value-added luxury yacht products.
Focusing on R&D, building high-tech ships
Jianglong sees technological innovation as its core competency in the company's development. Jianglong has established ties and engendered technological cooperation with many domestic universities, shipbuilding designing institutes and military research institutes, absorbing and assimilating cutting-end technology, and subsequently developing and designing the most competitive products to meet market demands.
For example, Jianglong is consulting with state authorities on a plan to join many research institutes to make technological breakthroughs in building a 360-degree self-buoyant lifeboat. The project involves high technical content; few international ship makers have access to this know-how, and no Chinese peers can match it.
Meanwhile, Jianglong also has its own internal development blueprints. It sees the cultivation of professionals as a determinant for sustained development. During its last 10+ years, Jianglong has built a highly skilled domestic R&D force. To keep pace with the company's development, Jianglong set up a research and development center in 2003, and subsequently upgraded this center in 2009, lifting it into a key enterprise R&D base in the area, and further increased spending in technological innovation. Also, Jianglong has joined hands with the local Higher Education Institutes to cultivate special technicians who will later serve the company. Graduates will be sent directly to Jianglong's new production line.
A caring environment, building "green" ships for World Expo
The "green ship" concept has revolutionized the global shipbuilding industry. Environmentally conscious practices have permeated into all levels of the development process. From design, to manufacturing, to sailing, to writing-off of ships, to reducing greenhouse gas emissions and water pollution, no level of production is immune to its effects.
Jianglong has been committed to environmental protection in its ship design and building. They developed electric-motorized middle-sized ships, and integrated solar-energy and wind-energy generating capacity into large-scale ships for navigation and illumination.
Jianglong's new environmentally friendly cruise ship was chosen in the recent 2010 Shanghai World Expo ship biddings. Jianglong's cruise ships have adopted solar-energy and wind-energy generating facilities in their design. Solar-panel and wind-power generating facilities attached to the hull can store electric power into batteries and use it at night for navigation and illumination.
Reporters saw three large cruise ships being built when visiting the company. The hull was basically finished. The lower hull is mainly made of steel and the upper hull made of fiberglass. The design captures the advantages of lightweight materials without compromising safety and stability.
Expanding product lines, advancing into high-profit yacht building
Jianglong's success in fiberglass ships has made them look towards luxury yacht building, which involves even higher technology and more complex system integration.
Jianglong's new plant, currently under construction, will be used mainly for luxury yacht building, including European speedboats that focus on below-50-feet specifications. The new plant compound will produce fiberglass yachts, aluminum yachts and compound material yachts simultaneously, the later combing advantages of two materials, offering optimal balance between wear-resistance, clash-resistance, aesthetics and lightweight properties.
Also, compared with fiberglass yachts, aluminum yachts generate far less dust, fibreglasses and other toxic pollutants. For written-off yachts, aluminum hulls are easy to recycle and are free from permanent pollutants.
Jianglong's yacht product line aims mainly at overseas markets, focusing on Europe while actively tapping new and emerging markets such as China. As for the Chinese yacht market, which is still in its infancy, Jianglong's Chief Executive sees it as having huge potential. The financial foundation for yacht consumers has already been formed, while the main obstacle is that supporting facilities and policy environment cannot yet match yacht consumption activities, which has caused many potential customers with purchasing capacities to hold off making purchases. Also, China's new wealthy class lacks understanding of yachts, but it is ripe for cultivation. It can be said that in the next 5-10 years, China's yacht market will grow with great speed. In this way, the Chinese yacht market development may follow the path of the Chinese auto market.
Fairtheworld.com points out that while the global slump is dealing a blow to the world economy, China has been relatively immune. In the yacht building industry in particular, economic conditions will dictate yacht makers' performances. After almost one year of recession, many signs show that the European and U.S. yacht industries are struggling. Middle and upper class consumers in Europe and the U.S. are suffering income cuts along with the global slump. This has greatly shaken the mainstream market. China will therefore become a new world driver for yacht makers. Cheap labor and huge market potential will shield yacht makers from the crisis and fuel their growth. China's domestic yacht building industry will take this opportunity to emerge stronger, improving yacht making technologies and prepare themselves for international competition.
For more information, please contact:
Dodona Song
Cell: +86-159-1626-1151
Email: news@fairtheworld.com
