19 October 2018
Lim Kok Thay expects Genting Dream (inset) and the coming World Dream cruises to attract a lot of Chinese tourists. Photo: EJ Insight
Lim Kok Thay expects Genting Dream (inset) and the coming World Dream cruises to attract a lot of Chinese tourists. Photo: EJ Insight

Genting Hong Kong planning cruise port in Shanghai

Genting Hong Kong (00678.HK), a shipbuilder and operator of cruises, is interested in building a cruise terminal in Shanghai to tap rising demand from Chinese holidaymakers.

“China’s major cruise hub is in Shanghai and others may include Tianjian, Guangzhou’s Nansha and Shenzhen’s Shekou,” Tan Sri Lim Kok Thay (林國泰), chairman and chief executive of Genting Hong Kong, said in an interview in Bremerhaven in Germany last week.

We originally wanted to develop Shanghai ports but they are now all full.” 

Tan said if there is any opportunity to invest in cruise infrastructure in Shanghai such as ports, Genting “will be very interested in it”.

At the moment, the company is focused on its port development project in Nansha for the south China market.

He said the Guangzhou government has been supportive of Genting’s development plans for Nansha and has set up a temporary port for the company.

As there will be a permanent cruise terminal in Nansha, more and more cruise operators will follow in Genting’s footsteps and set up home ports there, he said.

Work on an international cruise home port in Nansha started in August, with its completion scheduled for 2019.

The facility can handle 750,000 passengers a year.

Genting Hong Kong has a stake in the Nansha cruise terminal and a priority right to use it, said Colin Au (區福耀), founding president and chief executive of the company.

As ports are a sensitive facility in China, local governments usually hold more than 51 percent in any joint development with foreign investors, Au said.

In early 2016, the company relocated SuperStar Virgo, the flagship of its Star Cruises brand, to its home port in Nansha, aiming to test the mainland market.

Last week, it received Genting Dream, which has a capacity of 3,400 passengers and 2,000 crew members, from Meyer Werft, a German shipbuilder.

The company will base Genting Dream in Nansha and have its maiden voyage in mid-November to Hong Kong and Sanya in Hainan province.

At the same time, SuperStar Virgo, which is well known to Hong Kong people, will be relocated to Taiziwan in Shekou.

The company will receive another mega cruise ship, namely World Dream, from Meyer Werft by the end of 2017 but has not yet decided where the ship will be based.

Kai Tak Cruise Terminal

Lim said the company is interested in bidding for the right to manage Hong Kong’s Kai Tak Cruise Terminal when the current leasing contract is up.

He said the connectivity of the terminal is not ideal but it will achieve international standards in future, with plans to connect it with the MTR.

The company wants to participate in any plan to build another cruise terminal outside Kai Tak, he said.

In March 2012, a consortium led by Worldwide Flight Services won a 10-year contract to manage the Kai Tak Cruise Terminal.

Worldwide Flight Services owns 60 percent of the consortium while Royal Caribbean Cruises and a subsidiary of Shun Tak Holdings (00242.HK) have a 20 percent stake each.

Last year, the number of outbound cruise passengers in China exceeded one million, accounting for about 40 percent of all cruise passengers in Asia.

The United States market accounts for half of 23 million cruise passengers in the world; China’s market has a lot of room to grow.

At the moment, Carnival Cruise Lines and Royal Caribbean Cruises are the two largest players in the cruise industry.

Carnival’s “Costa” and “Princess Cruises” brands and Royal Caribbean’s “Quantum” brand have been operating in the Chinese markets these past few years.

Norwegian Cruise Line

In 2000, Genting Hong Kong, then Star Cruises, acquired 100 percent of Norwegian Cruise Line Holdings (NCL), which operates cruises in North America, the Mediterranean, the Baltic Sea and Central America.

After NCL went public on NASDAQ in 2013, Genting Hong Kong gradually reduced its stake in it. Last year, the company bought Crystal Cruises from Nippon Yusen Kaisha for US$550 million.

“We disposed of NCL’s shares because we are making a lot of money from this investment,” Lim said, adding that Genting Hong Kong remains a substantial shareholder of NCL.

He said resigning as NCL chairman allows him to avoid a potential conflict of interest with his role as chairman of Crystal Cruises.

He said it is time to focus on the Asian market, particularly China. He said there is insufficient supply of new cruises, so the company decided to buy some shipyards.

In September 2015, the company acquired a 70 percent stake and 50 percent land right in Lloyd Werft, a Germany shipbuilder, for 17.5 million euros (US$19.29 million).

Earlier this year, it bought the remaining 30 percent stake for 16.4 million euros.

In March, the company bought three shipyards in Germany for 230 million euros and renamed them MV Werften. It plans to upgrade the shipyards for 260 million euros over the next few years while boosting headcount to 3,500 from 1,700 in five years.

“We have no choice. If we don’t buy shipyards, we cannot compete with our rivals,” he said. “No one can operate a business without the ability to command the supply side of the equation.”

Three sons

Lim, 65, is the second son of Malaysian gaming tycoon Tan Sri Dato Seri Lim Goh Tong (林梧桐). A graduate of the University of London in 1975, he joined the Genting Group the following year. He took charge of the empire in 2007.

His eldest son, Lim Keong Hui (林拱輝) joined Genting Hong Kong in 2009 and is now chief information officer and executive director of the chairman’s office.

Prior to this, He worked in the investment department of Hongkong and Shanghai Bank.

Second son Lim Keong Han (林拱漢) represents Genting Group in a venture with 20th Century Fox Consumer Products to develop the world’s first 21st Century Fox Theme Park in Malaysia.

The theme park, part of the 10 billion ringgit (US$2.38 billion) Genting Integrated Tourism Plan, is scheduled to open at the end of next year.

Young son Lim Keong Loui (林拱銳), 28, joined Genting Hong Kong last year, taking care of the marketing of the Dream cruise brand.

After attending the handover ceremony for Genting Dream in Germany last week, he told the media that he has learned a lot from this father.

He said it is time for him to build up his career.

Their father seems to have no plan to retire. Lim said he enjoys working while he is a hands-on person, especially when talking about ship design.

When he retires, he said he might live on a cruise ship.

[Chinese version中文版1] [2]

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Lim Keong Loui will be in charge of marketing Genting Hong Kong’s Dream brand in China. Photos: EJ Insight

Chief reporter at EJ Insight

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