Chapter 228 New Ship Purchase and Shipyard Construction Plan

Chapter 228 New Ship Purchase and Shipyard Construction Plan

Chapter 228 New Ship Purchase and Shipyard Construction Plan
As the boss Yang Wendong, he naturally had no idea how to run the specific operations of Carrefour supermarket, so he could only rely on Liu Huayu and his team who had relevant experience in Walmart.

Locking in the direction, investing funds, recruiting professional talents, and then appropriately understanding and guiding oneself are the basic logic behind Yang Wendong's current work in several industries.

Next, I will wait for them to build the framework of the supermarket and then go take a look myself, and offer some suggestions based on my perspective as someone who has seen a lot of retail industry experience in my previous life.

However, in this case, we cannot say that past experience is completely good. Even if the opinions are implemented, we still need to see the results. For example, the experience of Liu Huayu and others in the United States may not necessarily be in line with the market in Hong Kong.

Everything requires slow exploration, making mistakes and then correcting them.

The first person to try something new will certainly face many difficulties, but the benefit is stronger experience in the future and the reputation of the pioneer effect.

After coming down from the top floor of Geely Building, Yang Wendong arrived at the headquarters of Changxing Shipping Company on the sixth floor.

"Mr. Yang." Zheng Yuhua had known that the boss was coming, and hurried out to greet him.

"You're welcome." Yang Wendong smiled and said, "I came here to learn from you about the recent development of Changxing Shipping and some of its future plans."

"Okay, I've prepared the financial information for the first half of the year." Zheng Yuhua said, "Wait a moment, I'll bring the information over."

Afterwards, Zheng Yuhua arranged for someone to pour tea for Yang Wendong and brought him some small fruits.

About 3 minutes later, Zheng Yuhua returned again, holding a thicker document in his hand, and said, "Mr. Yang, here is the financial data file of Changxing Shipping in the first half of the year. Please take a look."

"Okay." Yang Wendong took the document and started reading it.

Zheng Yuhua also introduced: "The finance department on my side will depreciate the purchased cargo ship over a three-year period, which means that the cost of buying the ship will be spread over the first three years.

After deducting this cost, plus daily operation, labor, fuel and maintenance expenses, we made a total profit of HK$112 million in the first half of the year.”

"112 million? No wonder people say shipping is very profitable." Yang Wendong nodded and said, "This is after depreciation. It seems that in two years, the extra profit from the ship will be recovered."

Although it seems that the profit in the first half of the year is not as good as that of Changxing Real Estate, that is because the real estate has mobilized the high leverage of the bank, and knowing the future, it can move forward with its eyes closed.

If a normal person were to run the business, the huge profits from shipping would still exceed those from the general real estate industry. However, due to Yang Wendong's foresight advantage, he would not have much of an advantage when running the shipping industry.

"Yes." Zheng Yuhua said, "Otherwise there wouldn't be so many big investors thinking of entering the shipping industry.

However, our company’s profitability is still stronger than that of other peers.”

"What do you mean?" Yang Wendong asked back.

Zheng Yuhua explained: "First, the cost of seven of our eight cargo ships is very low. If the initial investment is spread evenly, it will naturally increase profits."

"Yeah, that's right." Yang Wendong nodded: "It's just that this kind of good thing may not be available in the future. Next, even if I buy a second-hand ship, I have to return to the normal price."

"Yes." Zheng Yuhua continued: "The second point is that we have a stable order from Changxing Industrial. Although we have given a big discount, it is normal for any industry to give discounts for stable orders.

Even with a discount, stable orders can still bring in a lot of profit. And because the suitcase is too empty, I also specially found a lot of heavy sea cargo to stuff the ship.

These heavy goods are not popular in normal sea freight orders and are expensive, but we can earn high profits by taking them in large quantities.”

"Haha, this is indeed our advantage." Yang Wendong nodded and said.

In fact, ships are like trucks. It is not cost-effective to transport things that are too heavy or too light. The former will easily exceed the load capacity, while the latter will take up too much space and cannot carry enough weight, resulting in losses.

Therefore, bulk carriers focus on a combination of light and heavy cargoes, while in normal cargo transportation, most ships need to consider the total weight, so cargoes that are too heavy and have small space are not very popular.

But when it comes to Changxing Shipping, the situation is the opposite.

Zheng Yuhua added: "Mr. Yang, the document in your hand, the last few pages are the operating conditions of each cargo ship."

"Hmm!" Yang Wendong also looked at them one by one. Although he didn't know much about shipping, Zheng Yuhua wrote it very clearly, especially the revenue and expenditure.

He is not worried about the falsification of these figures. Several industries under his control are audited by the headquarters office every year, and Yang Wendong himself will randomly select a third-party accounting firm to conduct the audit.

Once an abnormality is discovered, it will be a serious problem.

In addition, if the cost figures are too professional, we will also find some colleagues to confirm their rationality.

After a while, Yang Wendong said: "The various data are still normal, but the maintenance data adds up to a very high level."

"Yes." Zheng Yuhua said: "Our ships are all old ships. We have to spend a lot of money to ensure that there are no problems. Otherwise, if there is a malfunction on the road, it will be troublesome."

"Well, old ships do have this risk." Yang Wendong nodded.

For a ship that is too old, high maintenance costs, high fuel consumption, and slow speed are all acceptable, and buyers will have this in mind when purchasing a ship.

But stopping the ship halfway would be a fatal risk. You know, shipping is like airlines. When to depart, what route to take and when to arrive at the destination are all planned and need to be reported to international shipping organizations to facilitate coordination among various ports.

If the ship breaks down halfway, all of these will be wasted and will need rescue, which will cost a huge amount of money.

What’s more important is that there are a large number of contracted goods in the ship’s hold. If they cannot be delivered in time, the penalty will be a very large sum, and it will also affect the reputation of the shipping company.

Although this is a low-probability event, no one dares to bet on it. Once it happens, even a ship may not be enough to compensate.

Zheng Yuhua added: "So in order to ensure safety, we have to increase costs in maintenance. Before each trip, we will conduct a comprehensive inspection at the Hong Kong dock, which is very expensive."

"We still have to spend the money we need to spend. Second-hand ships are cheap after all. You have to give up something if you gain something." Yang Wendong paused and asked, "Last time you suggested buying a new ship, was it also because of this consideration?"

Zheng Yuhua replied: "Yes, the new ship has a 6-10 year warranty period from the shipyard, which will be much safer.

Another thing is that I can receive charter requests from some Japanese companies.”

"Rent a ship?" Yang Wendong also knew that the main profit point for Hong Kong ship owners in this era was renting out ships.

However, most of them are short-term leases, and Bao Yugang is the only one who does long-term leases. Zheng Yuhua said: "Yes, I have known many Japanese shipping companies before, and they do not buy ships themselves, but mainly rent ships."

"What's the price?" Yang Wendong asked curiously.

Zheng Yuhua said: "It depends on the type of ship. In the past few years, the cost of renting a million-dollar cargo ship to a Japanese company was generally around 60 to 70 US dollars."

"So high?" Yang Wendong asked in surprise.

Zheng Yuhua explained: "The price seems high, but all operations are the responsibility of the shipowner. The Japanese company does not care about labor costs and ship maintenance.

Even if a problem occurs on the ship on the way, delaying their delivery, they will still be heavily fined. Therefore, if Hong Kong shipowners want to take on such business, they dare not use second-hand ships that are too old.

Moreover, Japanese companies are quite picky and will not rent second-hand ships just to get a cheaper rent.”

"So that's how it is." Yang Wendong nodded: "So the huge profits of Hong Kong shipowners actually come from the control of shipping costs."

"Yes, the lower the cost control, the greater the profit." Zheng Yuhua said.

"Hmm." Yang Wendong asked again: "Isn't this market saturated yet?"

Zheng Yuhua said: "No, new ships are still very popular now, because the global economy is developing rapidly, and the speed of new shipbuilding still cannot keep up with the demand.

As long as we have a boat now, there is no way we can’t rent it out.”

"Okay then." Yang Wendong said, "Then you can contact the shipyard in Japan and we can also purchase new ships."

It is only 67 years away from 6. Once chaos breaks out in the Middle East and the Suez Canal is closed, shipping prices will skyrocket.

Mr. Ou will pay for it globally.

This opportunity was even greater than the one encountered during the Hong Kong real estate crisis, and the profits would be all in cash. At the same time, the Hong Kong real estate market had just recovered in the late 60s, and the funds earned from shipping could be used to buy buildings, which was a perfect combination.

"Okay." Zheng Yuhua asked again: "Then how many ships should we buy and what kind of ships should we buy?"

Yang Wendong replied: "As for the number of ships, it depends on the loan situation of Japanese and Hong Kong banks, as well as the communication with the shipyard.

If we want to buy a bulk carrier, we can first buy a bulk carrier. Even if we can’t rent it out, we can still ship the goods for ourselves.”

Zheng Yuhua agreed and said, "I understand. Then I will spread the news and let the Japanese shipyard contact us."

"Okay." Yang Wendong asked again, "Does Japan produce container ships?"

“Yes, but it’s not suitable for us to buy.” Zheng Yuhua explained: “Now some ports around the world have begun to load and unload containers, and everyone can see that this model is the future of shipping.

However, the prerequisite for such loading and unloading is that the port needs to have supporting large-scale equipment. In fact, many current ports cannot be changed and need to be relocated, which requires huge infrastructure investment.

The current international situation is that most ports are still in the traditional model. If we buy a container ship, we can only rent it to shipping companies in a very small number of cities, which is not conducive to our business. "

"You're right." Yang Wendong agreed, "Even Hong Kong has no intention of developing containers."

In fact, it is not just a matter of money. The old docks are dependent on millions of boatmen. If there is a major reform, what will happen to these people? Even if Western countries have money, they dare not make a big move and can only take it slowly.

Even though everyone knows that containers are the future, the workers don't care. For example, in history, the UK was one of the largest loading and unloading ports in Europe. When the trend of the times came, the British government wanted to containerize the industry, but the dock workers went on a strike. Eventually the British government was forced to compromise and temporarily suspended the container reform.

The result was that the manual mode could not compare with containers, and the UK missed the opportunity to reform containers, allowing Rotterdam to become the largest port in Europe.

Zheng Yuhua added: "But don't worry, Mr. Yang, the current shipyards and many ship owners have also seen this trend, so the cargo ships currently being built tend to be converted into container ships in the future.

Although the transport space efficiency is certainly not as good as that of a dedicated container ship, it can be used for both purposes.”

"That's good, very good." Yang Wendong nodded and said, "Then let's send a message to Japan about buying ships. However, we also need to continue to purchase second-hand cargo ships. Once Changxing Industrial's factory in Kwun Tong starts operation, the production capacity will increase significantly, and the demand for freight will also be higher."

"I understand." Zheng Yuhua continued, "In the past six months, I have collected information on five second-hand cargo ships. Once I have communicated with their current owners, I will give you the information for review."

"Okay." Yang Wendong followed up, "We must ensure good quality. Even if it is Changxing Industrial's own company, there can't be any delays in delivery. They also have customers."

"Okay, Mr. Yang, rest assured, I will definitely pay the most attention to quality." Zheng Yuhua paused, and then said, "Mr. Yang, I actually have another idea, which is that it may involve more investment."

"What investment?" Yang Wendong asked.

Zheng Yuhua said: "Mr. Yang, you once said that you would invest heavily in the shipping market, which will inevitably lead to a large number of ocean-going vessels, especially Changxing Industrial, which has a huge demand and needs to purchase a large number of second-hand cargo ships.

As a result, we have a lot of tasks to do in repairing and maintaining ships, which is not only very expensive, but also takes a long time, because there are often long queues at the several shipyards in Hong Kong.

So I think if we have our own shipyard, it will save a lot of time and cost. Even if it is a new ship, if we have our own maintenance site, our own people can take better care of it, which may have a great impact on its lifespan. "

"We build our own shipyard?" Yang Wendong thought for a moment and asked, "How much investment will it take?"

Zheng Yuhua replied: "It depends on the cost of land, because the dock must be near a deep-sea port, which is a very scarce resource, or we can reclaim land ourselves, which is also very costly.

The investment in the shipyard itself is approximately 1000 million, but a smaller investment of several million will be enough. We can expand the investment when our scale grows in the future.

However, you need to buy the land in advance.”

"So the most important thing is to find a suitable location for building a ship repair dock?" Yang Wendong said after thinking for a while.

……

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(End of this chapter)