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Port equipment manufacturer hopes to harbor profits

Updated: 2013-11-01 07:38
By Wang Ying in Shanghai ( China Daily)

Shanghai's pilot free trade zone will offer opportunities for companies seeking to tap overseas markets, expand their business, lower capital costs and currency exchange risks, and increase international competitiveness, according to Shanghai Zhenhua Heavy Industry Co, China's biggest port equipment manufacturer.

Having already set up a shipping arm in the FTZ, ZPMC has high expectations for its growth under the plan.

Port equipment manufacturer hopes to harbor profits

The company - formerly known as Shanghai Zhenhua Port Machinery Co - established a presence at Yangshan Free Trade Port in 2012, and the area was later incorporated into the FTZ.

This makes it a value-added asset in the zone, where it has access to favorable policies and greater freedom in operating there, said Wang Hexu, an industrial analyst from Huachuang Securities Brokerage Co Ltd.

Song Hailing, the company's chairman, said the FTZ will expand investment channels, speed up diversification of trade modes, deepen financial reforms and innovation, and propel the development of the city's international shipping business.

The expanded investment scope should bring more profit growth to ZPMC.

"Taking the policy about non-monetary asset investment as an example, ZPMC can now directly invest in its own machinery, which will not only diversify investment modes but will also reduce capital pressure and investment costs," said Song.

Covering 28.78 square kilometers, the Shanghai FTZ was launched at the end of September after getting final approval from the State Council, China's cabinet, in August. It will be built on the basis of existing bonded zones - Waigaoqiao Free Trade Zone, Waigaoqiao Free Trade Logistics Park, Yangshan Free Trade Port Area and Pudong Airport Comprehensive Free Trade Zone.

According to Song, the financing platform within the FTZ will allow companies to expand sales channels by providing more financing solutions to clients from their branches within the special area. Future policies should enable them to capitalize on overseas business.

"Although no detailed policies have been announced yet regarding the offshore business, it is almost certain that a trial run of international trade settlements will greatly reduce risks in currency exchanges" Song said.

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