中遠戰(zhàn)略咨詢項目（麥肯錫）proposal：building the world’s leading ship repair company

1、This report is solely for the use of client personnel. No part of it may be circulated, quoted, or reproduced for distribution outside the client organization without prior written approval from McKinsey & Compan

2、y.CONFIDENTIALBuilding the world’s leading ship repair companyCOSCO Ship Repair GroupProposal, version 1July, 20012This memorandum, the attached horizontal exhibits, the financial contract and the confidentiality agreem

3、ent form together the formal paperwork that will govern our collaboration.Obviously, this proposal is based only on a short interaction with you. We would be delighted to revise or amend it after we have reviewed it to

4、gether.1. CONTEXT AND OBJECTIVESCOSCO Ship Repair strong starting baseIn the course of its overall restructuring, COSCO Group has integrated its different shipyards into an integrated “COSCO shipyard group” focused on s

5、hip repair. The COSCO Shipyard Group (CSG) has a strong position in China, where it is a leader in ship repair with 15% market share. It also has strong engineering capabilities that can be leveraged for further growt

6、h.It covers strategic geographic positions in China (Dalian, Nantong, Guangzhou), close to the largest shipping traffic centers of China. These core businesses are facing different starting situations and challenges :&

7、#182; Nantong, a joint venture with Hong Kong, is very successful, with 45 Mio RMB profit on 450 mio RMB turnover, and has strong capabilities in ship repair and major overhauls for bulk, oil and cargo ships. At the s

8、ame time, it has very limited potential for growth due to capacity and geographic limitation.¶ Dalian, again a JV with Hong Kong, is also doing well, with a leading position(300 mio RMB turnover and currently no p

9、rofit) in North China for dry bulk and cargo ship region. Its potential for increased capacity is large. However, skills are not as developed as in Nantong. You are exploring a JV with Singapore to increase growth.

10、82; Guangzhou, , is the smallest yard. It currently generates about 150 mio RMB revenues . It clearly is small versus the potential in South China.In addition to this strong starting position, CSG believes that being th

11、e leader in China, it has substantial structural advantages it could leverage: China has a low labor cost base and shipping in and out of China should further grow, thus increasing the revenue of ship repair (Exhibit