Upcoming Events. China Day at SMM 2014 Sep. 10 th, Danish Pavilion, SMM, Hamburg. DMOG China Newsletter, August,

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1 Events Case Story Marine Dynamics Activities Our Members Upcoming Events China Day at SMM 2014 Sep. 10 th, Danish Pavilion, SMM, Hamburg On the occasion of SMM held in Hamburg as from September 9-12, in which 85 Danish companies joined Danish Pavilion, the DMOGC networking meeting and China Day will be arranged at the Danish Pavilion on the morning of Sep. 10 th. Major Chinese shipyards, ship--owners and marine related media will attend China Day, including CSSC, CSIC, COSCO Shipyard Group, Sainty Marine, SSNAOE, Fujian Shipbuilding Industry Group, Bestway, Xiamen Shipbuilding Industry and China Ship News and etc. Schedule: Time: 10:30 11:30, Wednesday, 10 Sep. Venue: Private Lounge, Hall B1, Hamburg Messe & Congress 10:30 VIP guests arrive private lounge 10:30 11:30 Round tour of Danish Pavilion 11:30 VIP lunch with board members of Danish Marine Group DMOG China Newsletter, August,

2 Danish Pavilion at Shiptec China 2014 Oct , Dalian DMOG China will organize the Danish Pavilion at Shiptec China in Dalian. The booth with the size of 90 sqm has been reserved. DMOG China members can enjoy the following two options: Option 1: Booth + Seminar + Matchmaking meeting Cost: DKK 3,000 per sqm for turn-key stand and DKK 4,800 for fixed co-ordination fee. Seminar and matchmaking meeting for free. Option 2: Seminar + Matchmaking meeting Cost: DKK 6,000 for attending Seminar and Matchmaking meeting If you are interested in it, please sign up to angela.zhang@dk-export.dk before Sep. 15. Supporting programs: Oct. International Marine Science & Technology Forum - Marine Economy vs Shipbuilding Industry Oct. Offshore Forum China Deepwater Oil & Gas Exploration and Offshore Facilities - Morning Session organized by DMOG China 23 Oct. Dalian International Shipping Forum - Opportunities & Challenges of the Shipping Industry 22 Oct. International Class Societies Conference - Technical Seminar & Networking 23 Oct. B2B Meetings with Chinese Shipyards - Incl. CSIC, CSSC, COSCO, CSC etc. 25 Oct. Visit to Local Yards in Dalian - COSCO Shipbuilding Lvshun Training Course of How to Make the Yearly Sales Plan Dec. 22 nd -23 rd, 2014, Shanghai It is about the time to make the sales plan of 2015 this December! Danish Export Association will organize a second phase of training course for Chinese sales staff from Dec. 22 to 23 when participants can apply the new skills into next year s sales plan. Second Phase of Prosales Training Course by Mr. Jeffery Tong, Mercuri International Group - Mercuri International is the world s largest sales performance consultancy Invitation and detailed arrangement will be forwarded by separate mails. Prosales 该课程将提升销售人员完成销售指标的能力, 包括能根据销售目标制定计划, 提高个人销售计划 (2 天 ) 销售执行力 销售人员将掌握必需的知识和技巧, 并通过运用简便有效的分析和工具, 将目标转化为具体的销售活动计划, 从而确保实现短期与长期销售目标 Individual Sales This program is to improve sales ability in achieving their sales target, Planning (2 days) including how to make attainable sales plan and use practical sales tools to ensure what has been planned to be realized both in short and long term. DMOG China Newsletter, August,

3 Case Story BEVI A Company for the Future Headquartered in Sweden, BEVI was founded in 1931 and is today one of Scandinavia s most important company for the supply and service of electrical drives to equipment manufacturers, process industries and power plants. In order to serve more users efficiently and conveniently, BEVI has now developed into a global company with 9 subsidiaries around the world in Sweden, Denmark, Norway, Finland, Lithuania, Estonia and China. BEVI specializes in transmission equipment including electric motors, reducers, control cabinet, transmissions, and thermostat, as well as electrical components and auxiliary materials. The products are widely used in shipbuilding, marine engineering, general machinery, water conservancy and transportation and other industries. Through the steady cooperation with DESMI, BARKER JΦRGENSEN, IRON PUMP, NORSAFE, NOVENCO and Shanghai Huikai Electric Company, BEVI has provided a great number of motors and reducers to dozens of Chinese shipyards such as COSCO Group, Yangfan Group, New Century Shipyard, Yangzijiang Shipyard, JES, DSIC, BSIC, GSI, Jiangnan Shipyard, Hudong Shipyard, Sainty Marine, Wuchang Shipyard, Wuhu Shipyard, Jinling Shipyard and Zhangzhou Shipyard, which has made due contributions to the prosperous development of Chinese shipbuilding industry. BEVI has acquired type approval from BV and DNV and is able to provide all main classification societies certificates such as CCS, ABS, BV, CR, DNV, GL, KR, LRS, NK, RINA and RS to meet customers different demands. Recently, BEVI has launched IE2 and IE3 efficiency motors for ship environment according to EU standards and China energy-saving standards. With international brands and Chinese price, BEVI s products will further improve the international competitiveness of Chinese shipbuilding industry. Sourced from Chen Jianwei, Managing Director, BEVI Trading (Shanghai) Co., Ltd. DMOG China Newsletter, August,

4 China Marine & Offshore Dynamics Special News CSSC-Wartsila Sign JV to Build Engines July 18th, 2014 China State Shipbuilding Co and Finland's Wartsila Corp, one of the world's largest ship power manufacturers by revenue, signed an agreement to establish a joint venture for manufacturing medium and large bore medium speed diesel and dual-fuel engines. The CSSC Wartsila Engine (Shanghai) Co Ltd factory will be located at Lingang, Shanghai, and is expected to have its first engine ready for delivery by the end of The company will in particular target the growing offshore and LNG markets, as well as the market for very large container vessels. The Wartsila share of the joint venture is 49 percent and the size of Wartsila's equity investment is 12 million euros ($16.24 million). Sainty Marine Signs Nine Dual Fuel Boxships August 1st, 2014 Jiangsu Sainty Marine announced that it has signed with four single-vessel companies controlled by Reederei NSB, one of the largest containership operators in Germany, for the construction of four 5,000teu dual fuel containership with five options. The price for each ship is around $70m. Construction of the ships will start in 2015 and deliveries are scheduled in Sanfu Receives Order for Six Chemical Tankers August 4th, 2014 Taizhou Sanfu Shipbuilding announced that it has signed shipbuilding contracts with Singaporean owner Nova Shipping & Logistics for two 34,500dwt chemical tankers with options to build four more. The price for each vessel is about $35m, and deliveries will start from the second half of Shanghai Bestway Lands Contracts for 200 LNG-powered River Vessels August 4th, 2014 Shanghai Bestway Marine Engineering Design Co announced that its subsidiary Shanghai Bestway Marine Technology Development has signed EPC contracts with Green Power Water Transport Co for 200 LNG-powered vessels. Deliveries are scheduled in March The contracts include one hundred 600dwt vessels, fifty 800dwt vessels and fifty 1,000dwt vessels. Total value of the contracts is about RMB650m. DMOG China Newsletter, August,

5 Green Power Water Transport was established in June this year and is dedicated to inland river shipping. Shanghai Bestway and its subsidiary Shanghai Walking LNG holds 25% and 10% respectively in the company.. Zhongchang Marine Gives up on Major Restructuring Deal August 5th, 2014 Zhongchang Marine announced that it has given up on a major restructuring deal and resumed stock trading. The company had suspended stock trading since June 3 for the potential deal. Zhongchang Marine said it planned to acquire a technology company and raise funds from investors. However, eventually the two parties didn t reach any agreements on the acquisition price and other restructuring terms. Sinotrans Shipping Eyes More Assets from Parent August 6th, 2014 Hong Kong listed Sinotrans Shipping, which has acquired a series of assets in dry bulk shipping and container shipping from its parent Sinotrans & CSC Group, is looking to acquire more in the future. Li Zhen, president of Sinotrans Shipping, said the companies it just acquired are expected to have good performances in the second half of this year, adding that the parent group plans to integrate the company as its dry bulk platform, and that the company might acquire more assets from its parent company in the future. According to Li, Sinotrans Shipping currently has 10 vessels under construction and it will keep expanding the fleet according to the market demand. Dajin Scores Bestway Contract for 200 LNG Powered Ships August 8th, 2014 Shanghai Bestway Marine Engineering Design Co has awarded the shipbuilding contracts for 200 LNG-powered ships it received from Green Power Water Transport, to its affiliated shipyard Jiangsu Dajin Heavy Industry. Shanghai Bestway acquired Dajin Heavy Industry in 2013 as part of its long term business plan, having also taken over the shipbuilding facility of the bankrupt Jiangsu Bolunbao Shipbulding in the same year. Dajin Heavy Industry said its current orderbook will keep the shipyard busy through to October Qinhuangdao Port Establishes JV with Tianjin Port August 11th, 2014 Hong-Kong listed Qinhuangdao Port Group announced that it has entered into an agreement with Tianjin Port Group to establish a joint venture Bohai Port Investment. Total registered capital of the jv is RMB2bn, with the two companies each investing RMB1bn to get 50% of the equity. The synergistic development among Beijing-Tianjin-Hebei has become a national strategy of the PRC. Under this background, the cooperation among large-scale ports enterprises with the region is in line with development trends of the port industry in China, Qinhuangdao Port said in a release. Qinhuangdao Port will make use of the advantages of Tainjin Port Group in terms of port logistics, shiping route resources and port finance, so as to speed up the container business of the port. The jv will be set up in the Tianjin Dongjiang Bonded Port Area. DMOG China Newsletter, August,

6 GSI Inks Cosco Semi-submersible Vessel August 12th, 2014 Guangzhou Shipyard International (GSI) has announced that it has signed a shipbuilding contract with Cosco Shipping for the construction of a 90,000dwt semi-submersible vessel. The vessel will be equipped with DP2 system, and will be delivered in the fourth quarter of Cosco Shipping is currently operating six semi-submersible vessels with a total capacity of 210,000dwt. CMES and Sinotrans & CSC Join Forces to Form Tanker Giant August 12th, 2014 China Merchants Energy Shipping (CMES) has signed an agreement with Sinotrans & CSC to establish a tanker joint venture overseas through their subsidiaries. The total value of the new entity will be $1.11b. CMES will provide $566m worth of assets including 9 VLCCs and 10 VLCC newbuild contracts, some equity of its subsidiary Hong Kong Haihong Shipping and some cash to get 51% equity in the joint venture, while Sinotrans & CSC will invest $543m cash to get the remaining 49%. The joint venture will purchase more vessels once it is officially established, as the two national shipping firms aim to build the leading VLCC fleet in China in order to meet the country s rising demand for oil import. CMES currently operates 17 VLCCs with a total capacity of 3.71m dwt. Sinotrans & CSC s oil shipping arm, Nanjing Tanker, delisted from the stock exchange this year and now in the process of restructuring. The deal is expected to be finalised before September 30. Yangzijiang Receives RMB1.9bn Loan from Exim Bank August 13th, 2014 China Exim Bank announced that it has granted a loan of RMB1.9bn in total to Jiangsu Yangzijiang Shipbuilding to support the construction of nine 10,000teu boxships. Yangzijiang Shipbuilding received orders for up to twenty five 10,000teu boxships including options from Seaspan in It has delivered six of them so far. Cosco Secures Four Subsea Supply Vessels from Maersk August 13th, 2014 Cosco Corporation announced that Cosco Dalian Shipyard has secured contracts valued at over $470m from Maersk Supply Service, part of A.P. Moller-Maersk Group, to build four subsea supply vessels with two options. The vessels are scheduled for delivery in the fourth quarter of 2016 and the first quarter of Yangzijiang Cuts Interest in Ship Recycler August 14th, 2014 Yangzijiang Shipbuilding continues to dispose of non-core assets. The giant Singapore-listed yard has disposed of its 50% equity interest in the registered capital of ship recycler, Jiangsu Huayuan Metal Processing (JHMPCO). In view of the weakening demand and increased costs in relation to higher requirement on environmental regulations, it is in the best interest of the company to dispose the 50% equity interest in JHMPCO at a consideration of RMB140m, the yard said in a release. DMOG China Newsletter, August,

7 Yangzijiang will still hold a 50% stake in the company, but will change its focus to include steel cutting and processing, scrap steel crushing, shearing, and general cargo warehousing, wholesale of scrap steel, non-ferrous metals and ferrous metals, and coal washing, sale, handling, import and export. The disposal is in tandem with the [Yangzijiang s] strategy to re-position its businesses activities, the yard said. Shandong Shipping Sets up JV with Twin Marine Heavylift August 14th, 2014 Shandong Shipping has reached an agreement with Norwegian marine heavy lift contractor Twin Marine Heavylift to establish a joint venture. The new company, Shandong Twin Marine, will own and operate the 34,000 tonne Twin Marine Lifter (TML) System, transportation vessels and associated equipment, for installation and removal of large offshore structures as well as offering other offshore construction services globally. Development of the first TML System is on schedule for construction to begin later this year and for the system to be fully operational by 2017 following vessel sea trials and full scale system testing. Shandong Shipping will arrange all financing for the first TML System. Honghua Awarded First Tanker Order August 18th, 2014 Hong Kong-listed Honghua Group announced that its wholly-owned subsidiary Honghua Offshore Oil & Gas Equipment (Honghua Offshore) has entered into shipbuilding contracts with Korean company UDIN Engineering for the construction of six oil tankers. It is Honghua Offshore s first tanker order since its establishment in 2009, and the total value of the contract is $200m. Entering into the shipbuilding contracts indicates that Honghua Offshore has built up the diversified operation capacbilities and helped entering into a wide range of energy related transportation equipment, said Zhang Mi, chairman of Honghua Group. Additionally, Honghua Group also announced that it has entered into a letter of award with Orion Engineering and Management for the construction of one European-designed semi-submersible drilling rig at Honghua Offshore. Total value of the LOA is $320m. Taizhou Sanfu Seals Eight Heavy-lift Vessels August 18th, 2014 Taizhou Sanfu Shipbuilding has signed contracts with Danish owner Nordana for the construction of eight 12,000dwt multi-purpose heavy lift vessels. Deliveries are schedules from the second quarter of 2015 to the second half of Nordana currently has another four multi-purpose heavy lift vessels under construction at Taizhou Sanfu. Taizhou Sanfu has received substantial heavy lift orders this year, receiving orders for six 12,500dwt MPVs plus four options from German owner Zeaborn in April. Navibulgar Orders at Hongqiang August 20th, 2014 DMOG China Newsletter, August,

8 Navibulgar has contracted four firm plus two options of Bluetech 42 designed bulk carriers at Hongqiang shipyard. Bluetech 42 is a new handysize bulk carrier developed by Finland s Foreship BlueTech. The 42,300 dwt ships are 185 m long and have a hold volume of 57,750 cu m, some 15% bigger than most of its rivals. Navibulgar is Bulgaria s leading shipowner with a fleet of almost 30 vessels. Jiangsu Hongqiang Marine Heavy Industry is a shipyard located on the Yangtze river, some 68 km from Shanghai. Zengzhou Shipbuilding Awarded Five Bulker Deal August 20th, 2014 Zhejiang Zengzhou Shipbuilding has secured shipbuilding contracts from US company Marine Capital for the contruction of five 33,200dwt handysize bulkers. The vessels will fly the Marshall Island flag and be classified by Lloyd s Register. Bermuda owner Interlink will operate the vessels upon delivery, scheduled for October, December 2015 and March, May, July Jinhai Wins up to 30 Newcastlemaxes August 21st, 2014 China s privately-run shipbuilder Jinhai Heavy Industry turned out to have scored up to 30 Newcastlemax bulkers, which includes firm 10 units, from Singapore-listed AMK Securities. TradeWinds said that recently established AMK, firstly advancing into the market, ordered 10 firm 206,000 dwt bulkers with options from Jinhai, which is valued at around $1.8bn in total. According to industry players, AMK is a newcomer backed by an institutional investor in the US and a commodity trader in Swiss. A charter contract is already signed for the lately ordered newbuildings. The 10 firm units are slated for delivery from the third quarter of 2016 with newbuilding price estimated to come at around $59m apiece. Jinhaihas reserved slots for options till early The vessels are to be classed by ABS with registered as Singaporean flagged ships. Also, they are said to be managed by Thome Ship Management upon delivery. CSSC Eyes China s First Self-built Cruiseship August 22nd, 2014 China State Shipbuilding Corporation (CSSC), one of the two major state-owned shipbuilding conglomerates, is planning to develop China s first self-built cruiseship. Hu Wenming, president of CSSC, is confident about developing China s first luxury cruiseship, and said the company has been gaining experience in the design, construction and management of cruiseships. According to Hu, the demand for cruise travelling is increasing rapidly in China and it is expected that Chinese cruise travellers will account for around half of the total global cruise travellers, so it is essential for China to build its own cruiseships. China Cools Its Interest in LNG as a Ship Fuel August 25th, 2014 China's biggest energy firm PetroChina looks like it is changing mind about pushing LNG as a fuel for both trucks and ships on the back of rising gas costs. PetroChina unit Kunlun Energy closed two major gas liquefaction plants in the past month, according to Reuters. DMOG China Newsletter, August,

9 In July, just one month after the start of trial production, Kunlun shut down a 1.2m tonne per year (tpy) liquefaction plant at Huanggang in the central province of Hubei. The plant, the largest of its kind in China, had aimed to supply LNG to vessels along the Yangtze, China's longest river. A second plant at Ansai in northern Shaanxi province was closed a month ago. Neither plant has a clear date for a restart, sources told Reuters. Shanghai Shipyard Seals Six Bulkers from Scorpio August 26th, 2014 CSSC-affiliated Shanghai Shipyard has received shipbuilding orders from Scorpio Bulkers for six 82,000dwt kamsarmax bulkers. It is the first kamsarmax order Shanghai Shipyard has received. The delivery of the vessels is scheduled to start from the second quarter of Jiangxi Ocean Shipping Quits International Shipping August 27th, 2014 Jiangxi Ocean Shipping, the joint venture between Cosco Group and Jiangxi Transport Department, has sold its last two ships to a Hong Kong company and a Jamaican company for about $2m in total. Jiangxi Ocean Shipping used to operate six vessels and it was the only international shipping company in Jiangxi, however, the company has been selling vessels since 2008 in order to get through financial difficulties. The two ships Rui Jin and Gan Shun were built in 1991 and used to transport wood and coal between China and Vietnam, Philippines, Malaysia and Papua New Guinea. According to an official from Jiangxi Ocean Shipping, the company plans to shift its focus to domestic river container shipping. CMB Provides RMB30bn Facility to Cosco August 27th, 2014 China Merchants Bank (CMB) announced that the board has agreed to provide a credit facility of RMB30bn to Cosco Group in a three-year-period. Cosco Group reported a net loss of RMB1.88bn in the first quarter of The group said it plans to retire 41 vessels this year as part of its fleet optimization plan. Shipyards Change Course to High-end Vessels August 28th, 2014 After building cheap bulk carriers and tugboats for more than a decade, Chinese shipyards have moved to upgrade their products to tankers to reach buyers in new segment of the shipping market. The new course adopted by shipyards in Jiangsu, Zhejiang and Shanghai is largely the result of many global shipping companies reporting losses in the past four years because of overcapacity, falling ship prices, surging costs in labor, energy, steel and ship parts. China, as well as industrial nations in Western Europe, are all eager to purchase natural gas from abroad under current global political and economic conditions. LNG carriers are exactly what they need to secure their energy DMOG China Newsletter, August,

10 supply from the world market. The world s LNG ship market is dominated by South Korea, Japan and China. South Korea was the world s largest LNG vessel manufacturer last year, with 68 percent of global orders, but its production capacity is said to be saturated. Emerging markets such as Brazil, South Africa, Ghana and Turkey have all upped their demand for more industrial materials and products such as chemicals, vehicles and construction machinery from developed markets and China to improve their manufacturing capability and raise people s living standards. Market Monitoring Shipping Sector Sailing toward Crisis August 18, 2014 The shipping industry may have planted the seeds of its next crisis, even as it works to finish recovering from the last one, with a rise in the number of ships now being built in Asia. Many new ships are being built, mostly at Chinese or South Korean shipyards. When these hit the water over the next year or two they will create a glut that could hurt prices and push the industry into a new crisis. Chinese shipyards have been the biggest beneficiaries of this surge in new orders, says Ralph Leszczynski, head of research at shipping services group Banchero Costa. Last year, there were a reported 968 new orders for dry bulk carriers of almost all sizes. The largest supramax vessels were in particularly high demand, amounting to 390 of those orders. While Chinese shipyards are building most of the world's dry bulk carriers, shipyards in South Korea are building the largest number of tankers. A sudden rise in the amount of available shipping capacity would hurt prices and profits at shipping companies, many of which are still struggling to recover from the last huge downturn in the industry fol-lowing the global financial crisis in Even as new ships are delivered over the next year or two, a lot of old ships that have been sidelined or operating at reduced capacity are being brought back online. European shipping companies are getting ready to deal with this extra capacity. Two of the largest shipping lines in the world, Maersk Line of Denmark and Mediterranean Shipping Company of Geneva in Switzerland, reached a deal on July 10 to share capacity in container ships. The companies expect to save a significant amount of money by sharing capacity. Banks are getting back into the business of financing ships after years of conspicuous absence. Tiger Group Investments of Hong Kong estimates that private equity funds and hedge funds have invested more than $10 billion in shipping in the past few years. Another new source of funds that emerged in the post-crisis years was the policy banks, most notably China Development Bank and the Export-Import Bank of China. Leasing companies in the Chinese mainland-often owned by well-capitalized state-owned banks but operating at arm s length-also stepped into the fray. Source from Sea Trade Asia, Sinoship, CNSS & China Ship News DMOG China Newsletter, August,

11 Statistic of Newbuilding Order in China in July, 2014 Type Number DWT Builder Ship owner Delivery Time Bulk Carrier DWT Bohai Shipbuilding Heavy Industry Berge Bulk Bulk Carrier DWT Yangzijiang Shipbuilding M. East Bulk Carrier DWT Hongqiang Heavy Industry European Bulk Carrier DWT Chengxi Shipyard COSCO 2016 Bulk Carrier DWT Chengxi Shipyard COSCO 2016 Bulk Carrier DWT Shanhaiguan Shipbuilding Industry COSCO - Container TEU Zhejiang Ouhua Shipbuilding Arkas Container TEU Yangfan Group Ningbo Ocean 2016 Chemical Carrier DWT Taizhou Sanfu Ship Engineering Singapore 2016 Chemical Carrier DWT AVIC Weihai Shipyard Nordic Tankers Source from Fearnleys A/S & China Ship News Marketing Program for DMOG China members Contact us for detailed information! Marketing for DMOG China members: DMOG China Newsletter, August,

12 DMOG China Activity List in 2014 Updated in August, 2014 Board Meeting: W10, Mar. 3, Shanghai W22, May 28, Shanghai W44, September, Shanghai Networking Meeting: W12, Mar. 21, Breakfast networking meeting W21, May 19-20, Sales training course for local staff W22, May 28, Annual General Meeting W26, Jun. 26, Selling to China in Denmark W27, Jul. 2, Networking Reception with DWEG China W37, Sep.10, China networking meeting at SMM W43, Oct. 20. Networking meeting, Dalian W48, Nov. 28, Networking meeting, MAN Diesel (TBC) W52, Dec , Sales training course, Shanghai Shipyard / Research Institute Visit: W2, Jan. 9-10, visit to Yudean, COSCO Shipping Guangzhou & China Shipping Bulker W14, Apr. 2, visit to China Shipping & COSCO Container, Shanghai W26, Jun. 24, visit to COSCO Shipyard, Shanghai W38, Sep , ship owner s visit to DK Danish Marine and Offshore Group China Contact: Angela Zhang angela.zhang@dk-export.dk Tel: Fax: Address: Rm 1703, 1277 Beijng Xi Rd, Shanghai For any group discussion, you are welcome to join our LinkedIn and Weibo group - DMOG China Group - Sina Weibo! W43, Oct. 20, visit to COSCO Dalian / China Shipping Bulker Tianjin / COSL in Tianjin (TBC) Exhibition: W12, Mar , CIOOE, Beijing (Danish Pavilion) W43, Oct , Shiptec China, Dalian (Danish Pavilion) (TBC) W50, Dec , INMEX China, Guangzhou (Danish Pavilion) (TBC) Our Members DMOG China Newsletter, August,