Mr Ren Yuanlin knows all too well what it means to survive the odds, having grown up amid the chaos and violence of China's Great Cultural Revolution in the 1960s and 70s.
The executive chairman of Yangzijiang Shipbuilding (Holdings), China's largest privately owned shipyard, was sent to the countryside at the age of 14 to do hard labour under Mao Zedong's rustification campaign - the infamous "Down to the Countryside" movement.
"I learnt to be very independent at an early age, and to work very hard. At that time, we had few options - we could not make our own decisions, and all we could do was to maximise every opportunity that came our way," said the youngest in a family of five brothers and a sister.
The government assigned Mr Ren to work in Jiangyin Shipbuilding Factory, a state-owned company engaged in constructing wooden vessels, in the 1970s. In the mid-1980s, the company was renamed Jiangsu Yangzijiang Shipbuilding Factory.
"Shipbuilding was not my passion or my pursuit. That was the government's decision. But as long as I was there, I would do the job well," he added in Mandarin.
And Mr Ren, 62, has done just that.
Born in Jiangyin, Jiangsu province, he proved to be a shrewd businessman, taking Yangzijiang through various milestones, including the company's privatisation via a management buyout in 1999, as well as listings on the Singapore and Taiwan stock exchanges in 2007 and 2010, respectively. In September, Yangzijiang was included a second time as a constituent in Singapore's benchmark Straits Times Index.
The diploma holder in economics from Jiangsu Television Broadcasting University also successfully steered the company through a protracted industry slump, maintaining profits in the face of a severe capacity glut.
Yangzijiang, whose diversified product portfolio includes large containerships and bulk carriers, averaged revenues of 14.8 billion yuan (about S$3.2 billion) and earnings of 3.42 billion yuan between 2010 and last year.
Now, China's third-largest yard by capacity and the nation's most profitable shipbuilder still holds a healthy order book of US$4.8 billion (S$6.8 billion) despite the downturn. This backlog of 107 vessels is expected to keep its yards busy until 2018.
BlackRock, the world's largest investment manager with US$4.5 trillion of assets under management, holds approximately 5 per cent in Yangzijiang, making it the company's biggest institutional shareholder.
A LONG WINTER
Meanwhile, the number of shipyards in China has shrunk to about 300, from 3,000 over the past five years. This number may fall below 50 in another three years, Mr Ren said.
The global commodities slump and weaker shipping demand have decimated orders for new vessels, resulting in several Chinese shipyards filing for restructuring or declaring bankruptcy this year.
One-time peer China Huarong Energy - previously called Rongsheng Heavy Industries Group Holdings - has also struggled with losses and debts. Yangzijiang was approached by the government in March to explore the possibility of acquiring a stake in Rongsheng, but no decision has been made yet.
"It's going to be a very long winter," Mr Ren said, adding that the industry may take another three to five years to recover, with 80 per cent of players likely to go bust. "The question is how do you handle the challenges and make use of the opportunities that emerge during this period."
The company plans to boost sales and marketing efforts to ensure an expanding order book, while enhancing research and development (R&D) initiatives by partnering research institutes. It will focus on the niche markets of ultra-large containerships and clean-energy vessels, as well as building better vessels that offer higher loading, lower fuel consumption and reduced emissions, Mr Ren said.
And one advantage that will ensure Yangzijiang's survival is its cost structure.
"Our cost is about 5 per cent lower than our Chinese peers', because we are a private shipyard, not a state-owned enterprise. We have a stringent planning and construction process, flat management structure and lower procurement costs."
The bottom line is that the industry's competitive dynamics need to be adjusted, he added.
"China needs to withdraw protection and support for state-owned enterprises in the sector. The same goes for Korea. If both governments continue to protect their state-owned companies, which are the most irrational players in the market, the excess capacity will never be removed."
In hindsight, Yangzijiang's switch to 10,000 twenty-foot- equivalent containerships from smaller vessels was a smart move, Mr Ren said.
"This is now our flagship product, and because it's considered a high- end, sophisticated vessel, it has enhanced our profile in the market and helped define our fortunes over the last few years," he added.
OPPORTUNITIES BECKON
Mr Ren also expects demand for liquefied natural gas carriers (LNGCs) to rise in the future. Key competitors in this segment are the South Korean yards, due to their more advanced technology, while Japanese yards manufacture mostly for the domestic market.
"Acquisition opportunities for the LNGC market are few, as China is not advanced in clean-energy vessel production, while the Japanese and Koreans are very secretive about their technology. We need to set up our own R&D teams and will partner European shipbuilders to supply vessel parts and know- how."
The ongoing restructuring in China's shipbuilding industry, however, may throw up some interesting options in the near term, Mr Ren said.
A suitable deal - whether in stock or assets - would likely carry a price tag of "several hundred million to a billion US dollars", he added.
INVESTING FOR THE FUTURE
When Mr Ren is not grappling with day-to-day yard operations, he is voraciously reading up on global financial markets and exploring investment analysis tools.
"Understanding how currency and capital markets work is my passion. It's not about how much money you make, but whether your judgment and analysis were correct," he said.
While Mr Ren enjoys delving into the volatile investment world, he has kept his only son, Letian, firmly anchored in running the yards.
The 33-year-old, who holds a master's degree in Internet and Multimedia Engineering from London South Bank University, joined Yangzijiang in 2006. He was rotated through various positions before being appointed group chief executive officer on May 1.
"I want him to be an entrepreneur and a good businessman. Financial investments and the stock market would only distract him," Mr Ren said.
And the astute leader has implemented the same principle to secure Yangzijiang's future.
"The shipbuilding business is our foundation, and that needs to be established properly. After that, you can add financial investments, which will then build on the existing foundation. Without the base, the other means nothing."
This interview is from the Singapore Exchange's "kopi-C: the Company brew" column that features C-level executives of firms listed on the SGX.
