Evergreen’s Chang will not be seduced by mega-ships

Evergreen’s Chang will not be seduced by mega-ships Taiwan’s Evergreen Group will not join the recent rush for “mega-ships” of 10,000 TEUs-plus but is instead evaluating a new shipyard in China to build more modestly sized container vessels, founder and chairman Chang Yung-fa on Wednesday told journalists in London

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   “Operators that follow the crowd are likely to suffer once the recession sets in,” said Chang through an interpreter. “Now is not the time to build as the prices are extremely prohibitive.”
   Evergreen Line is the world’s fourth-largest container operator with a fleet capacity of just under 605,000 TEUs, giving it about 5.4 percent market share of the active worldwide fleet, according to American Shipper’s latest survey of the leading container operators.
   However, the Taipei-based carrier is likely to slide down the table soon as its newbuild program is much smaller than its closest rivals. Chang has ruled out orders above those of the group’s current largest vessels, the 8,073-TEU C-types delivered in 2005 and 2006, and its only confirmed orders are for two S-type 7,024-TEU ships. Evergreen is known to have a few other vessels under construction to third-party owners but is reluctant to give details.
   Chang is unperturbed by the group’s possible decline in market share. “Ranking is immaterial,” he said. “What is important is trying to operate a profitable business.”
   Since he established Evergreen Marine Corp. in 1968, Chang has seen many boom-and-bust cycles and as a result has developed a cautious approach. “Prepare for the bad times,” he said is his philosophy. “I've been in the business for 40 years, and have weathered a lot of storms. When the lull comes, the huge ships will suffer instability.”
   Instead of investing in the ultra-large containerships, Chang has identified a shortfall of at least 60 smaller ships ranging from 2,000 TEUs to 7,000 TEUs that he hopes to add to the Evergreen fleet in the coming years.
   To help address that shortfall, Chang revealed that the group is in discussions with the Chinese government to build a shipyard with 350,000 tons dock capacity at Quanzhou, in the Southeast of the Fujian Province.
   Chang was tight-lipped about the financial details but said the new yard wouldn’t be limited to building vessels just for Evergreen and could be ready to start construction on a wide range of ship types by 2011.
   Chang called the yard his potential “trump card” that will enable the group to continue to grow, while of course it will still have the option to dip into the charter market to satisfy its capacity requirements.
   Chang is visiting London to attend the United Kingdom debut on Aug. 30 of the Evergreen Symphony Orchestra (ESO), established by the Chang Yung-Fa Foundation in 2001.