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How to keep city’s ports afloat

Published on Friday, 11 Nov 2011
Simon Chung
Photo: Gary Mak
Ivor Chow
Photo: Gary Mak

As a listed company, Hongkong International Terminals (HIT) had to take precautions before agreeing to be the focus of the Citi International Case Competition (CICC) this year.

“We certainly had a couple of rounds with the Hong Kong University of Science and Technology (HKUST) to go through the case,” said Ivor Chow, managing director of HIT and one of the CICC judges. When working with the HKUST Business School – which prepared the case for the competition – Chow said HIT “edited out things that are not publicly known and kept strictly to publicly available information only.”

Looking back, Chow felt pleased they had taken the trouble to get involved. “I think it’s been great. I think that our involvement gets us thinking about who we are and what we are going to do,” he said.

This year’s CICC winners, the team from Bangkok’s Thammasat University, conceded they had initially been daunted at the prospect of having to come up with recommendations for such a well-run and successful business as HIT.

In 2010, Hong Kong was the world’s third busiest port by weight of throughput. HIT and its joint venture Cosco-HIT handled almost 65 per cent of cargo passing through Kwai Tsing, the city’s main port.

But with lower margins on its increasingly dominant transshipment business, strong competition from other ports, and lack of expansion space, HIT does have to contemplate its future.

“Most people don’t understand our industry as well as they think,” said Chow, adding he was surprised at the perceptiveness of the CICC contestants. “I thought their understanding of the problems we face – given they only have 24 hours or so to prepare – was actually quite on target and very good.”

Thammasat team member Veeranan Pipatwongkasem welcomed the extent of HIT’s involvement. “What was unique about this competition was the company visit,” she said. “Most of the teams haven’t had exposure to this industry. Having visited the company, we got a real picture of what they are doing.”

One of her teammates, Monsinee Sattayarak, agreed. “We were shown around different sections of the company, starting with the IT centre that controls the port and the ships. This was fascinating.”

Like several of the other judges, Chow felt that the CICC teams tended to be overly optimistic. “Everybody assumed steady and long-term growth and didn’t take into account alternative scenarios,” he said.

But, like all the other judges, Chow found it hard to decide on a winner this year. “The quality of the competition was very high and the debate was around whether the technical aspects of the presentation were more important than its impact,” he said. “In general, [the Thammasat team’s] presentation was the most impactful. In the end, that is the most important part.”

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