CSSC cap­i­tal­izes on OTC to ex­pand off­shore businesses

China Daily (Canada) - - FRONT PAGE - By MAY ZHOU in Hous­ton mayzhou@chi­nadai­lyusa.com

More than 10 sub­sidiaries of China State Ship­build­ing Cor­po­ra­tion (CSSC) will at­tend the Off­shore Tech­nol­ogy Con­fer­ence (OTC) next week from May 5-8 in Hous­ton to ex­pand the com­pany’s busi­ness in the off­shore sec­tor.

Started in 1969, OTC has be­come the world’s fore­most event for the de­vel­op­ment of off­shore re­sources in the fields of drilling, ex­plo­ration, pro­duc­tion and en­vi­ron­men­tal pro­tec­tion. OTC is held an­nu­ally in Hous­ton.

“OTC is like a club for all off­shore businesses. If you want to play in off­shore, you must at­tend OTC,” said Chen Weimin, CSSC’s off­shore busi­ness di­rec­tor in Hous­ton.

CSSC has more than 60 en­ter­prises and in­sti­tu­tions un­der its um­brella, and is a ma­jor player in ship­build­ing in the world. In re­cent years, CSSC has ex­panded into off­shore oil and gas de­vel­op­ment and trans­porta­tion sec­tor.

CSSC has been par­tic­i­pat­ing in OTC since 2005. Chen said the con­fer­ence pro­vides the best op­por­tu­nity to build a busi­ness net­work and visit key cus­tomers be­cause a ma­jor­ity of off­shore en­ter­prises world­wide at­tend the event and most com­pa­nies send their key de­ci­sion mak­ers to it.

“Al­most all ex­hi­bi­tion booths will have a vice-pres­i­dent by its side. Be­sides the ex­hi­bi­tion it­self, many more im­por­tant ac­tiv­i­ties hap­pen out­side of the OTC ex­hi­bi­tion hall with re­cep­tions and meet­ings be­tween the busi­ness people. Af­ter OTC is over, at least a month will be spent to do fol­low-up meet­ings with re­la­tions cul­ti­vated dur­ing OTC. OTC is the best time to meet most people you would other­wise have a hard time to get hold of,” Chen ex­plained.

Dur­ing the 2013 OTC, CSSC hosted the “China Arena” fo­rum with China’s ma­jor en­ergy play­ers CNPC, Sinopec and CNOOC pre­sent­ing the coun­try’s off­shore ca­pa­bil­i­ties to the world.

This year, more than 40 CSSC rep­re­sen­ta­tives will at­tend, with many of them high-level of­fi­cials and key per­son­nel in tech­nol­ogy and sales from var­i­ous com­pany en­ter­prises.

CSSC’s at­tendee list rep­re­sents the en­ter­prises do­ing off­shore busi­ness: China Ship­build­ing Trad­ing Co Ltd; Shang­hai Waigao­qiao Ship­yard; Hudong Zhonghua Ship­yard; Shang­hai Ship­yard; Jiang­Nan Ship­yard; Guangzhou Ship­yard In­ter­na­tional; Huangpu Ship­yard; Guangzhou Chengxi Ship­yard; CSSC Ma­rine Power; South China Ma­rine Ma­chin­ery; and de­sign in­sti­tutes MARIC, SDARI, STRI and GUMECO.

Chen has or­ga­nized a CSSC off­shore pro­mo­tional re­cep­tion on May 4, a day be­fore OTC opens at Hous­ton’s Re­liant Park. “By do­ing this re­cep­tion, I hope to gather CSSC’s off­shore en­ter­prises to­gether, in­te­grate our off­shore forces and pro­vide a step­ping stone for them to gain en­trance into the off­shore mar­ket,” he said.

CSSC has ben­e­fited from par­tic­i­pa­tion in OTC, Chen said.

“The break­through for CSSC’s off­shore or­ders started in 2011 with $500-600 mil­lion or­ders. In 2013, CSSC’s new book had in­creased to $2.4 bil­lion in the off­shore sec­tor,” Chen said. It’s a rel­a­tively small por­tion of 15 per­cent of CSSC’s over­all an­nual rev­enue of $15.8 bil­lion, “but it ac­counts for a sig­nif­i­cant por­tion — 30 per­cent to 50 per­cent — for some in­di­vid­ual en­ter­prises and it’s a fast grow­ing rev­enue source for CSSC.”

“One of our ma­jor fo­cuses will be pro­mot­ing the jackup drilling rig, and Waigao­qiao Ship­yard has al­ready got­ten 11 or­ders for it since 2012, and the to­tal or­der for CSSC is 13,” he said. A jackup is a mo­bile off­shore (oil) drilling unit that sits on a float­ing barge and holds the oil rig on a plat­form above the wa­ter.

To put those num­bers into per­spec­tive, Chen ex­plained that ev­ery year the to­tal or­der of jack­ups in the world is more than 100 and half of them are taken by var­i­ous Chi­nese com­pa­nies.

Other CSSC prod­ucts to be shown at the con­fer­ence in­clude float­ing pro­duc­tion stor­age of­fload­ing (FPSO) and a drill ship.

CSSC is ca­pa­ble of pro­vid­ing a com­plete off­shore pro­duc­tion line, from up­stream to down­stream, in off­shore oil and gas de­vel­op­ment, Chen said.

“From ex­plo­ration, build­ing of drill ship to pro­duc­tion and trans­porta­tion, CSSC has it all,” he said.

MAY ZHOU / CHINA DAILY

CSSC Off­shore busi­ness di­rec­tor Chen Weimin talks about the com­pany’s FPSO (model in glass case) prod­uct, which will be pro­moted at next week’s Off­shore Tech­nol­ogy Con­fer­ence in Hous­ton.

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