FROM modest beginnings nearly 50

years ago, homegrown shipping com-

pany Pacific International Lines (PIL)

has today become a premier player in

the region and has played its part in

Singapore’s growth as an internation-

al maritime centre (IMC).

The company was founded in

1967 by YC Chang with four coastal

vessels trading in Bangkok and Jakar-

ta. Today, it has grown from a coastal

shipowner/operator in Singapore to

become one of the largest in

South-east Asia, with more than 160

modern vessels worldwide

“Singaporeandthemaritimeindus-

try enjoy a synergetic relationship,

growing in tandem with each anoth-

er. The country is also an important

transhipment hub for many shipping

lines. PIL is no exception. For many

years, Singapore has been PIL’s

Asia-Pacific key transhipment hub

and will continue to remain so,” says

Teo Choo Wee, executive director

(fleet) Pacific International Lines.

As Singapore’s maritime pioneer,

PIL’s frequent services call at Singa-

pore port at dedicated berths and it

collaborates with stakeholders such

as PSA Singapore to promote Singa-

pore as an IMC.

Besides the business element, PIL

also participates in the grooming of

future maritime pillars through col-

laborations with educational institu-

tions to reinforce the supply of mari-

time talent for Singapore to remain

relevant as an IMC, adds Mr Teo.

On PIL’s key strengths, Mr Teo

says: “Our range of business means

that we are able to offer an array of

services ranging from container man-

ufacturing, container shipping, logis-

tics services and the newly intro-

ducedtruckingservice toourcustom-

ers to complete their needs,”

PIL’sgreateststrength is its flexibil-

ity in trade and fleet deploymentsup-

portedbythedifferentsizesof itsves-

sels. This makes PIL quick in manag-

ing the demand and implementing

changes quickly, ensuring non-dis-

rupted services to its ports of call.

Recording steady growth over the

past50years, PIL’sbusiness todayen-

compassesshipping,containermanu-

facturing and other logistics related

services with liner shipping at its

core.PIL’s fleetsandvesselsareavaila-

ble at over 500 locations in 100 coun-

tries with a strong presence in China,

the Middle East, Africa, Indian

sub-continent, Far East, Americas, Eu-

rope, Black Sea, Oceania and South

East Asia.

One of PIL’s subsidiaries, Singa-

mas Container Holdings Ltd, listed on

the Hong Kong Stock Exchange, is the

world’ssecond largestcontainerman-

ufacturer with 10 container factories

and eight depots in China.

MrTeosaysthatPIL is takingsever-

al steps to manage its business in the

current global shipping downturn.

“Despite the challenging global mari-

time environment, we continue to en-

gage the region actively through the

participation in the One Belt, One

Road strategy, proposed by Chinese

President Xi Jinping.

“Our engagement is further ampli-

fied by the joint venture with PSA Sin-

gapore and Guangxi Beibu Gulf Port

Group in the cooperative manage-

ment of the new Guangxi container

terminal in September 2015.”

Internally, PIL is investing in im-

proving itscapabilities to remainrele-

vantandmaintaincompetitiveadvan-

tage by promoting greater efficiency

and higher productivity in enhancingits shipping lines’ services in the longrun. These include the renewal of ex-isting IT infrastructureandmodernis-ing its fleet to reduce ship operatingexpenses.

Says Mr Teo: “Our contracted new-buildings, expected to be delivered in2017-2018, are equipped with highlyfuel-efficient engines and optimisedhullprofileprovidingmaximumoper-atingefficiency, incorporatedwithen-vironmental friendly features thathave low carbon footprint.

“Concurrently, PIL’s internal ITframeworks are also undergoing revi-talisation for better service deploy-ment and enhanced efficiency andproductivity. Additionally, we alsowork closely with other shippers inutilising our respective assets effi-ciently while improving our positionin the global maritime arena throughcooperation in trade routes.”

As a local company committed toSingapore, PIL has its own growthplans going forward. “Leveraging ourbusiness units, PIL continues to ex-plore business opportunities, espe-cially in emerging markets. We con-stantly review our services and im-prove them to meet the demands ofour customers,” says Mr Teo.

JIANGSU Steamship, a subsidiary of

the Jiangsu Huaxi Group, one of the

largest township enterprises in Chi-na, has dropped anchor in Singapore

togrow its shipping business leverag-ingtheRepublic’sstatusasaninterna-

tional maritime centre.

Thenewshippingentrant toSinga-pore is seen as cultivating a core

group of Chinese ship operators inSingapore, thus injecting more diver-

sity and vibrancy into the country’s

maritime cluster.CaptainZhaoBaoAn,generalman-

ager of Jiangsu Steamship, says thatthe company sees Singapore as a new

growth centre and as a first step

wants to move its chartering teamhere.

“Singapore is obviously one of themain maritime, trading and financial

centres in the world. Many commodi-

ty traders, shipowners and vessel op-erators have been long established in

the city and many others like us arecoming here,” says Capt Zhao.

“We want to move our chartering

team here so that we will have betteraccess to a greater pool of potential

clients in the world’s leading mari-time hub. Besides the strategic loca-

tion, honest and open government,

flexible immigration policies,produc-tive labour forces and outstanding

tax system are all critical factors thatprompted us to set up operations

here.”

Jiangsu Steamship registered ashipping company, Jiang Su Steam-

ship Pte Ltd, here in February 2014and has recently got the Maritime and

Port Authority of Singapore’s approv-

al for theApprovedInternationalShip-ping Enterprises (AIS) incentive

scheme.CaptZhaosaysthat JiangsuSteam-

ship has several key strengths as a

shipping company. “The companyand management team have beendealing with worldwide traders likeBHP, Hyundai Glovis, Winsway Re-sources, RGL Shipping, Bunge Gene-va,SwissmarineAsiaandCargill Inter-national for many years and main-tained very good relationships.”These global traders have been usingJiangsu Steamship for carrying vari-ous types of commodities such asiron ore, coal and grains.

JiangsuSteamshipCompanyLimit-ed was established and registered inHong Kong in March 2010 with its op-eration and management in Zhangjia-gang, Jiangsu Province, China. Afterfive years of steady development, thecompany now owns 13 bulk carrierswith total tonnage of about one mil-liontons indeadweight.Besidesoper-ating its own ships, the company es-tablishedacharteringteamin2012fo-cusingonoperatingcharteredvesselson various time periods or time-char-ter trip basis.

Capt Zhao says that times are

tough for the global shipping indus-

try, especially dry bulk shipping.

Most vessels carrying coal, iron ore

and other dry commodities are earn-

ing less than their operating costs.

“As dry bulk carrier owners, we are

facing the same challenges. Luckily,

mostofourvesselshave lowercapital

costs and we have full support from

Jiangsu Huaxi Group Corporation to

tide over the downturn.

“Opportunities are often hidden in

downturns. We are replacing our old-

er fleet with younger vessels from the

second-hand market at a relatively

low cost. We have our own excellent

ship management and crew manning

team.Our fleetcangetoptimisedsup-

port from our management team, so

that we can lower our overall operat-

ing costs.”

Capt Zhao says that the company

is looking forward to contributing to

Singapore’s growth as an internation-

al maritime centre. “With our charter-

ing teammoving toSingapore,we can

contribute about 80 voyages of char-

tering business to the vessel operat-

ing sector of the maritime centre. We

are also considering registering our

fleet here, to increase the tonnage of

the Singapore-flagged fleet.”

FOR the Maersk Group, a

conglomerate of world-

wide businesses focusing

on the shipping and ener-

gy industries, Singapore is

the only place outside Denmark

where all its business units are repre-

sented. The group operates in some

130 countries and is headquartered

in Copenhagen, Denmark.

MaerskhasbeenestablishedinSin-

gapore since 1975 and has grown its

operations here substantially in tan-

dem withSingapore’s growthas an in-

ternational maritime centre. It is the

top Singapore Registry of Ships (SRS)

client with about 140 vessels and the

Singapore office operates over 100 of

its vessels.

Significantly, despite the current

gloom and doom in the global ship-

ping industry, the number of Maersk

employees in Singapore remains sta-

ble at around 650.

SaysRene Piil Pedersen,grouprep-

resentative Singapore/Asia-Pacific,

MaerskGroupandmanagingdirector,

AP Moller Singapore Pte Ltd: “With all

ofourmajorbusinesseshavingactivi-

ties in Singapore there will always be

somewhoarescalingdownwhileoth-

ers are growing their number of em-

ployees, and right now we are grow-

ing the number of staff in Maersk

Line’s commercial office based in Sin-

gapore as part of a restructuring of

the business in South-east Asia.

“Eventhoughthecompanywasfor-

mally established in 1975, our ves-

sels have been calling at Singapore

since the late 1920s.”

Mr Pedersen sees shipping compa-

nies playing a strong role in

Singapore’s growth as an internation-

al maritime centre (IMC) going for-

ward.

He says maritime Singapore is

built on three pillars: competitive-ness, that is, a globally competitivetaxation scheme, ease of doing busi-ness, etc; stability, ie, a consistent,long-term transparent governmentpolicyexecutedbycompetentgovern-ment and institutions, rule of law andstrong anti-corruption policy; and fi-nally multicultural meritocracy,whichgivesaccess totalentwithanin-ternational and competitive mindset.

“This gives a very strong funda-ment for Singapore as an IMC, andthis is also the reason why the MaerskGrouphasregisteredcloseto140ves-sels and drilling rigs with a value ofsome US$12 billion in Singapore,” hesays.

The Maersk Group in Singapore ismade up of a diversified portfolio ofbusiness units, ranging from contain-ers, tankers,offshoredrilling,port ter-minals, oil, tugs to logistics business-es. It employs around 650 people inSingapore – all white-collared jobs.

“Today, our container business,Maersk Line, in Singapore is made upof AP Moller Singapore, our ship own-ing and ship management company;Liner Operation Cluster for Asia Pacif-ic is responsible for global stowage oftheentireMaerskLine fleetandopera-tions of vessels in Asia-Pacific ports;as well as a commercial office whichoversees business activities in theSouth-east Asia market,” says Mr Ped-ersen.

“Singapore is key to us as one of

the main transhipment ports in

South-east Asia; as well as our trusted

supplier for our offshore oil and gas

businesses.For instance,MaerskDrill-

ing has around 30 years of relation-

ship with Keppel Fels in the construc-

tion of offshore rigs, of which the

most recent project was for three ul-

tra-harsh environment jack-ups

wortharoundUS$2billion.Wehaveal-

so awarded a contract to Sembcorp

Marine through Maersk Oil to build

topsides worth US$1 billion for the

Culzean Field development in the

North Sea,” he adds.

Established in 1904 the Maersk

Group employs about 89,000 people

globally today. Its 2015 revenue

stands at US$40.3 billion with an un-

derlying profit of around US$3.1 bil-

lion. It comprises five core business

units:

■ MaerskLine, theworld’s largestcon-

tainer shipping company;

■ Maersk Oil, an international oil and

gascompanywithatrackrecordspan-

ning more than 40 years.

■ MaerskDrilling,whichsupportsglo-

bal oil and gas production by provid-

ing high efficiency drilling services to

oil companies around the world;

■ APM Terminals, which provides

port and inland infrastructure to

drive global commerce;

■ APM Shipping Services comprisingMaersk Tankers, which owns and op-erates a large fleet of refined oil prod-uct tankers; Svitzer, which providestowage and related marine servicesthroughout the world; Damco, a pro-vider of freight forwarding and sup-ply chain management services; andMaersk Supply Service, a leading pro-vider of global marine services.

“AttheMaerskGroupwehaveadis-tinctive set of group core valueswhich drives the way we do business,namely: Constant Care, Humbleness,Uprightness, Our Employees and OurName. These values laid the founda-tion for success over the years. Theyremain constant despite the complexand challenging business environ-ment we are faced with today, and al-lowus tomakesounddecisions in thespirit of our Maersk founders,” saysMr Pedersen.

Asked how Maersk is handling thecurrent downturn in the global ship-ping environment, he says: “2016started on a rocky note. Containerfreight rates are extremely low and anoil price of US$30-40 per barrel haspointed to a challenging start. In spiteof the adverse market conditions andheadwinds, it is important to stressthat all Maersk core businesses wereprofitable in 2015. This is a result ofour business units having taken mea-sures to further improvecompetitive-

ness and we will continue to do sothis year while maintaining activitylevel so that we are in the best posi-tion to serve our customers.”

TheMaerskGroupalsohastheflex-ibility and financial strength to capi-talise on the downturn through itsstrong balance sheet as a conglomer-ate. It isconfident that itscurrentmar-ket leadership in the shipping and en-ergyindustrieswillallowit tomakein-vestments for future growth by build-ing on its key strengths and focusingon its customers and innovation.

Looking ahead, Mr Pedersen saysthat the global economy ischallengedby both cyclical as well as structuralchanges and at the same time he seesemergence of disruptive innovationsacross different industries.

“All this, of course, influence theMaerskGroup, whether we are talkingabout low growth rates, changes intrade flows or behavioural patternsand expectations from our custom-ers.However,ourcompanywasestab-lished in 1904 and this is not the firsttime that we haveweathered a storm.

“Our focus is on delivering a greatservice to our customers combinedwith a strong business performanceandadifferentiation through technol-ogy and innovation makes me astrong optimist on the future of theMaersk Group both in Singapore andthe rest of the world.”

Local pioneer PIL iscommitted to S’pore

Leading Chinese shipping companydecides to drop anchor here

POSITIONING FOR FUTURE GROWTH

Maersk continues to grow operations

Jiangsu wants to move itschartering team to Singapore sothat it will have better access to agreater pool of potential clients,says Captain Zhao

“Maersk Group has registered closeto 140 vessels and drilling rigs witha value of some US$12 billion inSingapore,” says Mr Pedersen

“For many years, Singapore hasbeen PIL’s Asia-Pacific keytranshipment hub and will continueto remain so,” says Mr Teo

Brought to you by

SINGAPORE MARITIME WEEK 2016

The global conglomerate has played an important part in Singapore’s growth as an international maritime centre. BY NARENDRA AGGARWAL

The Business Times | Friday, April 8, 2016 | 29