Sumec Ocean Transportation


Singapore based Sumec Ocean Transportation, which is the parent company of Chinese shipyard New Dayang Shipbuilding, is planning to become like Japan’s trading house ship builder-owners. Sumec Ocean Transportation plots course as a new model of Chinese shipowner. Hence, Sumec Ocean Transportation has rapidly increased its fleet and operations. According to Sumec Ocean Transportation’s Managing Director Yang Lei, Sumec Ocean Transportation is planning to become the most reliable tonnage supplier of the shipping industry.

Sumec Ocean Transportation’s new time-charter based operations commenced on 1 April 2019. Sumec Ocean Transportation’s parent company is a trader Sumec Group Corporation, which is directly affiliated with state-owned China National Machinery Industry (Sinomach).

In 2018, Sumec Ocean Transportation became a sister company of Chinese shipyard New Dayang Shipbuilding. Sumec Ocean Transportation is aiming to become a Chinese answer to Japan’s Imabari Shipbuilding or Tsuneishi Shipbuilding, which has its Kambara Kisen shipowning branch. According to Sumec Ocean Transportation’s Managing Director Yang Lei, Sumec Group Corporation’s strong balance sheet gives the whole group access to better financing.

Sumec Group Corporation’s aim is to exploit this advantage to pursue synergies between shipping, shipbuilding, manufacturing, and trading within the group. Sumec Group Corporation has grown from a trader with passive exposure to shipping into a shipbuilder and now operating owner via parent company Sumec Ocean Transportation. Sumec Group Corporation has a long history of financial involvement with the Chinese shipbuilding industry, dating back to 1986 when Sumec Group Corporation began providing refund guarantees to shipyards it served as an equipment supplier.

Sumec Group Corporation held equity stakes in several yards, including the former Jiangsu Eastern, which was known for a time as Jingjiang Sumec Shipyard. In 2016, principal creditor Sumec Group Corporation was eyeing a stake in then-troubled New Dayang. Sumec Ocean Transportation’s Managing Director Yang Lei was previously working three years with Oldendorff Carriers in Shanghai and Singapore and then seven with Cargill Ocean Transportation in Singapore.

Oldendorff Carriers and Cargill Ocean Transportation are now Sumec Ocean Transportation’s time-charter customers. Cargill Ocean Transportation chartered in six (6) kamsarmax and ultramax bulk carriers from Sumec Ocean Transportation. Sumec Ocean Transportation has been working with New York-listed blue-chip companies, but also wants China’s financial leasing houses.

Sumec Ocean Transportation has been existing as a shipowner since 2010. However, Sumec Ocean Transportation has only acted as a passive asset investor until 2019. Sumec Ocean Transporation’s parent company Sumec Marine is the main shareholder in New Dayang Shipbuilding, Yangzhou, China. Sumec Group acquired New Dayang Shipbuilding and formally opened it in November 2018. Currently, New Dayang Shipbuilding controls 42 vessels, 30 vessels on the oceans, and 12 new-buildings under construction.

Sumec Group owns 25 of these outright and has 17 bareboat chartered-in from financial owners China Development Bank Financial Leasing (CDB Leasing) and AVIC International Leasing. Sumec Ocean Transportation’s Managing Director Yang Lei plans to grow over time and also to expand beyond dry cargo. MD Yang Lei hopes to build the fleet up to 70 ships in 8 years.

Sumec Ocean Transportation’s plan is to exploit New Dayang Shipbuilding’s strength as one of the most efficient shipbuilders of medium-sized ships. New Dayang Shipbuilding is able to construct four (4) kamsarmax bulk carriers simultaneously and that means New Dayang Shipbuilding could also build four (4) MR2 tankers simultaneously.

Sumec Ocean Transportation could place orders on New Dayang Shipbuilding, but currently the problem with the MR2 market is that charter rates will not support the current newbuilding prices. Currently, Sumec Ocean Transportation is chartering out ships on period charters of one to three years and has no ships trading on spot right now. Sumec Ocean Transportation’s target business model is to place ships on time charters of five (5) years. Sumec Ocean Transportation has three (3) kamsarmax and nine (9) ultramax bulk carriers set for delivery soon.