Business Overview
As a leading transportation infrastructure company in the PRC, the Company is an industry leader in each of its four core
businesses, namely Infrastructure Construction, Infrastructure Design, Dredging and Port Machinery Manufacturing. Leveraging
on its extensive operating experiences, expertise and know-how accumulated in projects undertaken across a wide range of
sectors in the past 5 decades, the Company is capable of providing integrated solutions throughout each stage of an
infrastructure project for its customers.
The Company operates its business throughout China, especially in the three most rapidly growing economic regions, namely the
Bohai Rim, the Yangtze River Delta and the Pearl River Delta. Meanwhile, the Company has established its global presence in 55
countries and regions, including Southeast Asia, Middle East, Commonwealth of Independent States, Africa and South America.
The Company honoured its promises to shareholders with outstanding performance in 2006. At the same time, the Company
continued its core strategic blueprints to seek for excellent growth opportunities in business. In 2006, total turnover of the
Company achieved RMB114,881 million, representing a year-on-year increase of RMB31,616 million or 38%. Profit attributable
to equity holders of the Company was RMB3,199 million, representing an increase of RMB1,044 million or 45.7% over 2005.
The Company maintained a smooth and rapid development in its business in 2006 with the value of new contracts amounted
to RMB153,936 million. As at 31 December 2006, the Company had a backlog of RMB154,957 million of contracts.
Market Review
China’s economy sustained its healthy pace of development in 2006 with a GDP of approximately RMB20.94 trillion,
representing an increase of 10.7% over 2005. In addition, China’s foreign trade grew steadily in 2006 with total value of imports
and exports increased by 23.82% over last year to US$1.76 trillion. Due to the unbalanced distribution in natural resources
(iron and coal mines are located primarily at the northwestern and northern part of China) coupled with different degree of
economic development among different regions driving a higher demand on resources in those relatively developed coastal
areas in eastern China, the roles of infrastructures such as ports, roads, railways and those for air and water transportation
are of great significance for domestic trade.
Ports
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China’s ports industry continued being robust in 2006. A total of 252 new berths, including 144 units of 10,000-tons deepwater
berths, were constructed in the ports along the coastal areas, adding throughput capacity of 495 million tons. China’s cargo
throughput achieved a 15.4% year-on-year growth to 5,600 million tons and the container throughput increased by 26% over
the previous year to 93 million TEUs in 2006. As at the end of 2006, China had 12 ports with annual handling capacity of
hundred million tons, ranking the first in the world. Besides, China has the largest port throughput and container throughput
in the world.
Roads and Bridges
According to statistics released by the Ministry of Communications, the total length of newly constructed or reconstructed
roads in China was 340,000 kilometers in 2006, including 4,460 kilometers of expressways. As at the end of 2006, the total
length of the roads completed in China reached 3.48 million kilometers, including 45,400 kilometers of expressways. Moreover,
a large number of bridges, including the Donghai Bridge were completed in 2006.
Railway
As the first year of the Eleventh Five-Year Plan, the year 2006 obviously marked a milestone in the railway history of China. The
PRC government made significant efforts to put forward railway construction with a total investment in construction of RMB155,000
million during 2006, which ushered the booming new constructions of PDLs (Passenger Dedicated Line) such as Beijing-Tianjin,
Wuhan-Guangzhou, Zhengzhou-Xi’an, Shijiazhuang-Taiyuan, Wuhan-Hefei-Nanjing and Wenzhou-Fuzhou, together with TaiZhongYin
(Taiyuan-Zhongwei-Yinchuan) Railway. In 2006, the track laying works of 1,040 kilometers of new lines and 997 kilometers of doubletrack lines were completed, while 1,605 kilometers of new lines and 705 kilometers of double-track lines were put into operation.
As at the end of 2006, China’s total railway network operating length was approximately 76,600 kilometers, among which 3,960
kilometers were electrified lines, representing 1.5 times that of Tenth Five-Year Plan.
Dredging
China enjoyed rapid growth in construction of deepwater and specialised terminals of new and existing ports in 2006. In order
to increase navigation capacity for large-scale container carriers and oil tankers, coastal ports were hastening in broadening
and deepening harbour basin and waterway. Meanwhile, the growing economy fostered construction of seaside industrial parks,
resulting in increasing projects of reclamation and sea coast protection. The growth in the number of port construction,
expansion and renovation projects required more capital dredging and maintenance dredging services and led to an extremely
booming dredging market of the PRC in 2006. In 2006, the total volume of dredging along Chinese coast was approximately
540 million m3 , representing approximately 30% increase from that of year 2005.
Business Overview (Continued)
Market Review (Continued)
Port Machinery
Because of the rapid growth in international trade and containerized trade, the international port machinery manufacturing
market grew moderately in 2006. According to World Cargo News Statistics, there were 11,703 large-scale container cranes
in use worldwide as of December 2006 (representing an increase by 1,314 units over 2005) which included 4,398 units of
quayside container cranes and 7,305 units of gantry container cranes. The operation of new container ports and innovation
of the equipment in use demonstrated the continuous growing demand for container machinery. The port construction in China
is in its rapid growing period, implying the growing demand for port machinery. To satisfy the handling requirement of largescale ships and improve loading and unloading efficiency, the coastal ports are aggressively purchasing and upgrading cranes.
Business Review
Infrastructure Construction Business
The Company achieved admirable results in its Infrastructure Construction Business in 2006, benefiting from the boom in
transportation infrastructure industry. The Company participated in a large number of infrastructure projects including ports,
roads and bridges, and made major breakthrough in entering railway market. The Company completed infrastructure construction
projects with RMB76,220 million of turnover. The value of new infrastructure construction contracts signed in 2006 reached
RMB105,214 million. As at 31 December 2006, the Company had a backlog of RMB102,711 million of infrastructure
construction contracts.
The Company’s infrastructure construction business consists of:
1.
Port Construction
Focused on five groups of ports located at the Bohai Rim, the Yangtze River Delta, the coastal area in the south-eastern
China, the Pearl River Delta and the coastal area in the south-western China, the Company maintained its absolute
predominance in port construction by undertaking the construction of container ports, bulk terminals and special cargo
ports for coal, ore, oil, chemicals, natural gas, iron and steel and grain. At present, the Company is engaged in projects
for all 12 ports with throughput of over hundred million tons.
Major projects completed in 2006 include:
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(1)
Phase I of of Yangshan Deepwater Port Project
The Phase I project comprises of three parts, namely Harbour
Area Project, the Donghai Bridge and the Luchao Port
Ancillary Project. The Harbour Area Project features 5
berths for ships of 70,000 to 100,000 ton, which allows
the berthing of the newest super-Panama container carriers.
The port has a quay length of 1,600 meters, land area of
1.53 square kilometer, and annual handling capacity of
about 3.5 million TEUs .
Yangshan Deepwater Port
(2)
Marina construction projects of Qingdao
International Sailing Center for the 29th Olympic
Game
Located at Fushan Bay in East New Zone of Qingdao,
Shandong Province, the Qingdao International sailing Center
will be the arena for sailing tournament of the 29th Olympic
Games and the 12th Paralympic Games. The construction
of pier barge is mainly made of precast concrete. When
necessary, the pier barge can be appropriately placed using
a tugboat to deploy berths flexibly. It is currently the most
advanced pier barge in China.
Qingdao International Sailing Centre
Annual Report 2006
Business Overview (Continued)
Business Review (Continued)
Infrastructure Construction Business (Continued)
1.
Port Construction (Continued)
(3)
Phase I of Beigangchi Container Terminal of Tianjin Port
Located at Beijiang Habour of Tianjin Port, the project is a newly built container terminal connecting to the
project of Beigangchi roll-off cargo terminal in Tianjin Port. The berth frontline is 1,100 meters long and 73
meters wide. High-piled slab and beam banking structure is adopted by the terminal.
2.
Road and Bridge Construction
In 2006, the Company completed construction of high-grade roads of 1,336 kilometers in length and 40 large bridges.
The Company’s road and bridge construction projects spread over 30 provinces (also including autonomous regions and
municipalities directly under the Central Government) nationwide.
Major projects completed in 2006 include:
(1)
Yangluo Bridge
10
(2)
Section C of Yangluo Bridge
As one of the national key construction projects during
the Tenth Five-Year Plan, Yangluo Bridge in Wuhan serves
as the key link for Wuhan Belt Highway, a part of
Jingzhu National Trunk Expressway and Hurong National
Trunk Expressway over the Yangtze River. It is also a
component of the key trunk roads between Hangzhou
and Lanzhou and of the main highway skeleton featured
“4 vertical, 2 horizontal and 1 rounding” as planned by
Hubei province. Section C includes the south tower and
south bridge approach projects consisting of the road
beds, separate interchange bridge and bridge
approaches. The south tower is 167 meters high while
the south bridge approach is 1,585 meters long.
Section V of Hangzhou Bay Sea Bridge
Hangzhou Bay Sea Bridge is a national trunk and the
most convenient 3-lane passage crossing over the
Qiantang River. Being the longest sea bridge in the
world to date, its north starts from Haiyan of Jiaxing
in Zhejiang, and ends in Cixi of Ningbo in Zhejiang
with a total length of 36 kilometers. The major body
of Hangzhou Bay Sea Bridge consist of south approach
bridge, over-sea platform, south channel bridge, central
approach bridge, north channel bridge, and south
approach bridge.
Hangzhou Bay Sea Bridge
(3)
Section II of Civil construction for Jining-Fengzhen expressway of Erhe National Trunk Expressway
The project includes a dual six-lane section with a total length of 12.4 kilometers.
Business Overview (Continued)
Business Review (Continued)
Infrastructure Construction Business (Continued)
3.
Railway
In 2006, the Company made major breakthrough in entering the railway market. The Company undertook the
construction of 9 railway projects with a total length of 290.29 kilometers and an aggregate turnover of approximately
RMB8,772 million.
Currently, major railway projects under construction include:
(1) Wuhe Railway (railway construction for Hefei-Wuhan
section of Huhanrong Passage to Huangpo station projects,
section WHZQ-1)
The total length of the railway will be 46 kilometers. The project
is scheduled to be completed by early 2008. During 2006, the
Company completed most of the road bed construction and
constructed according to the design requirements, the main body
of 17 bridges. All culvert construction was also completed.
(2) Taizhongyin Railway (railway construction for TaiyuanZhongwei (Yinchuan) station and phase I of key project)
The total length of the railway will be 166 kilometers. The
project is scheduled to be completed by September 2008. The
construction has been progressing smoothly since its
commencement in September 2006 and, 25 bridges and 6
tunnels are being constructed now.
Wuhe Railway
Infrastructure Design Business
The Company maintained the leading position in infrastructure design industry in 2006 by participating in the design of a large
number of major constructions in transportation infrastructure industry. The Company completed infrastructure design projects with
approximately RMB5,502 million of turnover for the year. The value of new infrastructure design contracts signed in 2006 reached
RMB6,868 million. As at 31 December 2006, the Company had a backlog of RMB7,740 million of infrastructure design contracts.
1.
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Port Design
In 2006, the Company provided design for most of the costal and inland terminals which were under construction
and completed port design projects with approximately RMB2,700 million of turnover. In 2006, the value of new port
design contracts amounted to approximately RMB3,000 million.
Major projects completed in 2006 include:
(1)
Phase II of Yangshan Deepwater Port Project
The project is an extension of the Phase I towards the west, with a quay
length of 1,400 kilometers. Four berths dedicated for 70,000-100,000
ton container carriers are to be built. The land area totaled 890,000
square meter, with a design throughput of 2,100,000 TEUs per year.
(2)
300,000-ton Crude Oil Terminal Project in Tianjin Port
The project mainly includes construction of terminal, 9.2 kilometers
long bridge approach, oil pipelines, port dredging, producing system
and ancillary facilities.
(3)
Yanghsan Deepwater Port
Phase II of Guangzhou Port Project
The project extending to south from the downstream of phase I project
adopts the structure of alongshore blocks. The hydraulic construction
structure of the main body terminal can meet the berthing requirement
of 100,000-ton container carriers. The hydraulic constructions primarily
comprise terminal structure, downstream transition section and
cofferdam, where 6 container berths will be built.
Annual Report 2006
Business Overview (Continued)
Business Review (Continued)
Infrastructure Design Business (Continued)
2.
Road and Bridge Design
In 2006, the Company completed Road and bridge design projects with approximately RMB2,000 million of turnover.
Completed projects primarily including Nanjing Belt Highway of Hurong National Trunk Expressway, Shaxi section
(Sunde-Zhongshan) of Tai’ao Expressway, Ningbo Xiangshan Port Bridge and Xiamen Jimei Bridge.
In 2006, the value of new road and bridge design contracts amounted to approximately RMB3,200 million.
3.
Railway Design
The Company successfully set its footprint in the railway design market in 2006. The Company undertook the design
for railway projects such as the feasibility study on Xi’an Baoji PDL, the feasibility study and two-stage design for Pinyi
Railway in Shandong and the construction project for the Lujiang-Tongling Railway.
Dredging Business
The Company maintained the leading position in coastal Dredging Business in 2006. The Company completed dredging volume
of 428 million cubic meters, accounting for 80% of the total domestic coastal dredging volume, of which, 72 million cubic
meters for maintenance dredging and 356 million cubic meters for capital and reclamation dredging.
In 2006, the Company successfully completed a large number of dredging projects with RMB10,450 million of turnover. The
value of new dredging contracts signed in 2006 reached RMB11,392 million. As at 31 December 2006, the Company had
a backlog of RMB11,321 million of dredging contracts.
Major projects completed in 2006 include:
(1)
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Caofeidian Port
(2)
Phase I Tangshan
Caofeidian Steel
Reclamation Project
The Project covers the land
lot used for new steel plants
of Shougang Group and
Tangshan Iron and Steel
Group, including the
reclaimed land formed by
hydraulic fill and the box dam
structures, with a reclamation
volume of approximately
32.39 million cubic meters
and a land area of 3.45 square
kilometers.
Phase I and Phase II inland dredging projects for the
harbor area in Shanghai Yangshan Deepwater Port
The total dredging volume amounted to 15.82 million cubic
meters.
(3)
Dredging project for navigation channel of Tianjin Port
The total length of the navigation channel was 37 kilometers.
The bottom elevation was datum -18.5 to datum -19.5 meters
and the width of the channel bottom amounted to 217 meters.
The dredging volume will be 24.4 million cubic meters.
Tianjin Port
Business Overview (Continued)
Business Review (Continued)
Port Machinery Manufacturing Business
As the largest provider of port machinery in the world, the
Company conducts its port machinery business and extends to
the product manufacturing business through its subsidiaries
ZPMC and SPMP. In 2006, the Company successfully completed
port machinery manufacturing projects with RMB19,028 million
of turnover. The value of new port machinery manufacturing
contracts signed in 2006 reached RMB25,868 million. As at 31
December 2006, the Company had a backlog of RMB28,585
million of port machinery manufacturing contracts.
ZPMC produced 261 units of quayside container cranes and 500
units of gantry container cranes in 2006, accounting for
approximately 70% market share of the global large quayside
container cranes. Its products were used in 55 countries and
territories around the world, adding extra 5 countries and regions
in the same year. In 2006, ZMPC entered into contracts for 28
quayside container cranes and 60 RTGs with A. P. Moller Maersk
Group; and 42 cranes including 14 quayside container cranes
and 28 gantry container cranes with Dubai Port International in
the United Arab Emirates.
Dual hoist quayside container crane
that handles twin 40 feet containers,
and double trolley quayside container cranes
In 2006, the extended operation of ZPMC from port machinery and
other newly developed operations based on the port machinery
manufacturing business enjoyed rapid growth. ZPMC gained the
steel structure contract for the New Bay Bridge in USA, which is
recognised as a super project by the global bridge community,
marking the opening of the world’s bridge market to China.
Furthermore, ZPMC successfully completed the manufacturing of a
4,000-ton 360 degree revolving floating crane, whereby it entered
the offshore oil drilling platform segment of the heavy marine
equipment market.
ZPMC produced steel work for the construction
of highways and bridges in Canada
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SPMP produced 138 units of products including quayside container
cranes and gantry container cranes in 2006. It also had breakthrough
on rail transit projects and obtained a contract for manufacturing
tunnel boring machine with a diameter of 14.88 meters. Meanwhile,
the 900-ton gantry cranes for railway construction produced by
SPMP were put into operation.
900 - ton gantry cranes
for railway construction
Annual Report 2006
Business Overview (Continued)
Technological Innovation
The Company achieved outstanding performance on technological development and innovation in 2006. The Company had
102 patents registered in China during that year. By integrating the internal technical research and development resources,
the Company established a research and development framework consisting of two state-level research and development
centers, five key laboratories and twelve research institutes. A three-tier interactive system (namely, the Company — Subsidiaries
— Project Managing Department) was created for scientific and technological innovations. Furthermore, the Company
established the scientific and technological committee and an expert panel.
Capitalising on comprehensive technical strengths, the Company obtained a number of research achievements and ensured
smooth running of national key projects. The Company proactively undertook research and development projects for the state
and the industry, and therefore facilitated turning research achievements into proprietary capital. The key breakthrough project
of the Ministry of Communication “Key Technology Research for Off-shore Deepwater Port” undertaken by the Company was
included into the State’s long-term technology development compendium for 2005-2020. A range of core proprietary
technologies developed by the Company including complete technologies for high-grade road construction, long-span bridges
and deepwater port-building technologies had met global advanced standard. The new hydraulic-lift cross-cable crane
developed by the Company was employed in construction of super-long span cable-stayed bridges. The short-cable matching
approach and high-precision overhang jointing technology applied in Sutong Bridge came into the spotlight of the bridge
community. The first RTG crane using commercial power in the world marked a revolution in the global container lifting
equipment industry.
14
The Company won the National Prize for Technical Progress for three projects, including the proprietary study of “Key
Technology R&D and Application for New Generation Container Crane in Port”, the cooperative R&D projects of “Key
Technology Study for the Cable-stayed Bridge Coupled with Long-Span Steel Box Girder” and “Key Technology for Predication
and Comprehensive Control of Frost Damage to Roads and Tunnels in Cold Region”. “China Zhantianyou Prize for Civil
Engineering” was awarded to five project undertaken by the Company including the Runyang Bridge, Hangzhou Fuxing Bridge,
Yanmenguan Tunnel of Shanxi Xinyuan Highway, Yixing-Lishui Highway in Hurui National Trunk Expressway and the project
in relation to the construction of six berths under the Post-Phase 1 Dayaowan Harbor Area Project of Dalian Port. The Lock
Chamber project of Huai’an No. 3 Shiplock in the Beijing-Hangzhou Grand Canal and the Donghai Bridge which were
undertaken and participated by the Company respectively were granted “China Construction Project Luban Award”. The
Mupian Terminal Project in Rizhao Port, the hydraulic and stacking project at Shekou Container Terminal Phase 2, the hydraulic
project at Majishan Port of Baosteel Group Corporation, Wuhan Junshan Yangtze River Highway Bridge of Jingzhu National
Trunk, Ehuang Yangtze Highway Bridge all won ”National Quality Construction Silver Awards”.The construction projects of
Donghai Bridge and Runyang Bridge, which the Company had participated in, were selected as the “National Top 10
Achievements of Construction Technology”.
Yangluo Bridge
Annual Report 2006