• Monday 15 October 2012, 09:45
• by Jing Yang
• Finance
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ZhouWei: “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 careerU-turn, but Minsheng Financial Leasing Company’spresident Zhou Wei did, and it was not a small one.

A seasoned banker born in southern China’s Hunan Province, one of thehilliest areas in the Chinese hinterland, Mr Zhou never thought he would beinvolved in shipping one day.

“I grew up in the mountains where I hadn’t seen any ships. Now I’m doingshipping,” said Mr Zhou in his Beijing office, after detailing the company’sgrowth path to Lloyd’s List.

Mr Zhou started out in Minsheng Bank, theleading private bank in China, and had been at the helm of the bank’s variouslocal branches in coastal Guangdong and Fujian provinces before assuming thetop job in the fledging Minsheng Leasing in April2008.

That year, the company baffled regulators when it applied to beregistered as a shipowner in the Ministry of Transport and for a licence in theMaritime Safety Administration. “At that time it was unheard of that afinancial institution could be classified as a shipowner,” Mr Zhou said

But perceptions were changed in only two years. Mr Zhou was elected ontothe fifth council of China Shipowner Association, the first executive directorto represent the leasing industry in the seafarer-dominated association. Oneyear later he was also appointed a council director of China ClassificationSociety.

He led a team that struck the first offshore vessel leasing deal inChina, for six anchor handling tug supply vessels with China Oilfield Services,a subsidiary of CNOOC. He also created the first operating lease deal, foreight 76,000 panamax vessels ordered at Rongsheng Heavy Industry. Both dealscame in 2009.

Now, owning a 4.6m dwt fleet comprising 120 vessels, Mr Zhou and histeam mates have made the company a respectable and indispensable player inChina’s domestic shipping industry.

He has repeatedly addressed gatherings attended by shipowners, shipbuildersand shipbrokers, speaking of the importance of leasing as an alternativefinancing source to the industry and his willingness to help cash-strapped butcredible companies ride out the downturn.

Such promises are underpinned by Minsheng Leasing’s ability to win credit from banks. Forty-five banks have extended atotal of Yuan150bn ($23.8bn) loans to the company, of which a substantial chunkis and will be pipelined to shipping.

Perhaps it is the extensive banking experience that groomed Mr Zhou to bea qualifiedplayer in the roller-coasting shipping industry, as both shrewdbankers and ships’ masters are used to steering across ebbs and flows andstaying alert to risks.

“I feel lucky whenever I look back,” said Mr Zhou, who in 2010 wasranked 78th in Lloyd’s List 100 most influential people in shipping in 2011.

“We entered shipping when the industry was in the doldrums, the BalticDry Index was stripped to only three digits and shipowners were agonised. And Ialways ask myself, had I entered the market at the peak, would I be able tokeep a cool head in sight of industrial frenzies?”

But we can be sure that reminiscences of the current trough will be alively reminder to Mr Zhou when the next peak whirls around. In fact, someprecautionary attributes often seen in bankers are already exhibited in Minsheng Leasing’s current operation.

While maintaining a strict standard in screening clients, such ascharter-backed leasing, Minsheng Leasing hasshunned flowery concepts — including liquefied natural gas carriers, the newshipping industry favourite in China.

“As LNG carrier became the industrial buzzwords in China, we did conductsome [feasibility] research but concluded that there are still manyuncertainties,” he said.

  “Our company rests on solid business, not somedazzling concepts. It’s true that demand for LNG is on the rise, but we haveyet to reach the point where carriers are short in supply.”

Moreover, the wave ofbankruptcies sweeping across German KG funds and Norwegian K/S partnerships providesa distinct lesson to Minsheng Leasing. “There have beenmany bankruptcy stories for us to learn. Ship finance has been dominated byEuropean players for hundreds of years. I hope that one day the voice ofChinese 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 HongKong to tap offshore opportunities, such entities cannot sustain stableconsistent growth.

Nonetheless, during thetwo-hour meeting with Lloyd’s List, Mr Zhou repeatedly exuded confidence inobtaining the ities’ approval and in short-run expansions. “We have beenin hibernation, strengthening ourselves internally from early last year, butwill unveil new moves later this year.”

And this time, no one wouldever regard the man from the mountain an outsider to maritime matters.