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The man who came from the mountains
- Monday 15 October 2012, 09:45
- by Jing Yang
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Zhou Wei: “Our company rests on solid business, not some dazzling concepts”.
Minsheng Leasing president Zhou Wei has changed the maritime business in China
IT IS not usual for a 40-year-old to have a career U-turn, but Minsheng Financial Leasing Company’s president Zhou Wei did, and it was not a small one.
A seasoned banker born in southern China’s Hunan Province, one of the hilliest areas in the Chinese hinterland, Mr Zhou never thought he would be involved in shipping one day.
“I grew up in the mountains where I hadn’t seen any ships. Now I’m doing shipping,” said Mr Zhou in his Beijing office, after detailing the company’s growth path to Lloyd’s List.
Mr Zhou started out in Minsheng Bank, the leading private bank in China, and had been at the helm of the bank’s various local branches in coastal Guangdong and Fujian provinces before assuming the top job in the fledging Minsheng Leasing in April 2008.
That year, the company baffled regulators when it applied to be registered as a shipowner in the Ministry of Transport and for a licence in the Maritime Safety Administration. “At that time it was unheard of that a financial institution could be classified as a shipowner,” Mr Zhou said
But perceptions were changed in only two years. Mr Zhou was elected onto the fifth council of China Shipowner Association, the first executive director to represent the leasing industry in the seafarer-dominated association. One year later he was also appointed a council director of China Classification Society.
He led a team that struck the first offshore vessel leasing deal in China, for six anchor handling tug supply vessels with China Oilfield Services, a subsidiary of CNOOC. He also created the first operating lease deal, for eight 76,000 panamax vessels ordered at Rongsheng Heavy Industry. Both deals came in 2009.
Now, owning a 4.6m dwt fleet comprising 120 vessels, Mr Zhou and his team mates have made the company a respectable and indispensable player in China’s domestic shipping industry.
He has repeatedly addressed gatherings attended by shipowners, shipbuilders and shipbrokers, speaking of the importance of leasing as an alternative financing source to the industry and his willingness to help cash-strapped but credible companies ride out the downturn.
Such promises are underpinned by Minsheng Leasing’s ability to win credit from banks. Forty-five banks have extended a total of Yuan150bn ($23.8bn) loans to the company, of which a substantial chunk is and will be pipelined to shipping.
Perhaps it is the extensive banking experience that groomed Mr Zhou to be a qualifiedplayer in the roller-coasting shipping industry, as both shrewd bankers and ships’ masters are used to steering across ebbs and flows and staying alert to risks.
“I feel lucky whenever I look back,” said Mr Zhou, who in 2010 was ranked 78th in Lloyd’s List 100 most influential people in shipping in 2011.
“We entered shipping when the industry was in the doldrums, the Baltic Dry Index was stripped to only three digits and shipowners were agonised. And I always ask myself, had I entered the market at the peak, would I be able to keep a cool head in sight of industrial frenzies?”
But we can be sure that reminiscences of the current trough will be a lively reminder to Mr Zhou when the next peak whirls around. In fact, some precautionary attributes often seen in bankers are already exhibited in Minsheng Leasing’s current operation.
While maintaining a strict standard in screening clients, such as charter-backed leasing, Minsheng Leasing has shunned flowery concepts — including liquefied natural gas carriers, the new shipping industry favourite in China.
“As LNG carrier became the industrial buzzwords in China, we did conduct some [feasibility] research but concluded that there are still many uncertainties,” he said.
“Our company rests on solid business, not some dazzling concepts. It’s true that demand for LNG is on the rise, but we have yet to reach the point where carriers are short in supply.”
Moreover, the wave of bankruptcies sweeping across German KG funds and Norwegian K/S partnerships provides a distinct lesson to Minsheng Leasing. “There have been many bankruptcy stories for us to learn. Ship finance has been dominated by European players for hundreds of years. I hope that one day the voice of Chinese financiers would be heard as well.”
For that to happen, regulatory hurdles have to be cleared first. Although Minsheng Leasing has set up special vehicle companies in Hong Kong to tap offshore opportunities, such entities cannot sustain stable consistent growth.
Nonetheless, during the two-hour meeting with Lloyd’s List, Mr Zhou repeatedly exuded confidence in obtaining the authorities’ approval and in short-run expansions. “We have been in hibernation, strengthening ourselves internally from early last year, but will unveil new moves later this year.”
And this time, no one would ever regard the man from the mountain an outsider to maritime matters.