Y.K. Who?

Everyone knows who are the world's biggest, cleverest and richest shipowners. They are the Golden Greeks, led by those indefatigable headliners, Ari Onassis and Stavros Niarchos--right? Maybe, but someone is right in the same league. A scarcely known shipowner from Hong Kong named Y.K. Pao may soon become the largest of them all.

Beginning in 1955 with an aging tramp steamer, Pao has built a fleet of 3.5 million tons, most of it in ultramodern supertankers and bulk carriers. By comparison, Niarchos controls 3.4 million tons and Onassis 4.3 million. Pao's navy has the distinct advantage of being practically brand new. But by early 1975, when some $800 million in new ships that he has already ordered are delivered, the Pao armada will total about 10 million tons. With an average age of less than 3.5 years, it will be the largest and newest private fleet on the seas.

Movable Assets. Pao's surge adds greatly to the biggest shipbuilding boom since World War II. While others find it hard to get keel space in shipyards at any price, Pao continues to stagger his competitors with orders on a scale that few can match. Because he pays top dollar, places orders in such great quantity and has cultivated close ties with owners of Japanese shipyards, he usually manages to obtain space. Last week he announced his latest deal--six supertankers totaling 1.5 million tons to be built by a consortium of five Japanese shipyards. The price: $180 million. Even the Japanese, who build nearly 50% of the world's new merchant tonnage, have been blinking at such gargantuan orders.

Pao traces his interest in shipping to ] 948, when he fled the threatening Communists in Shanghai, where he worked in a local bank. Settling in Hong Kong, he opened a small import-export business. Relatives urged him to invest in real estate, but he had learned the hard way to prefer investments that were not tied down or vulnerable to government takeover. "I wanted movable assets," he explains. Without knowing port from starboard, he scraped together the down payment for a Liberty-type freighter.

The phenomenal success that has followed is due largely to Pao's ability to undercut his competitors' shipping charges. His advantage stems from the same factors that enable Japanese and Hong Kong manufacturers to push into Western markets with low-priced textiles and TV sets. Pao operates with modern equipment and has a large pool of cheap labor in Hong Kong. While his European competitors scour the Continent for anybody willing to work for seamen's wages, Pao has set up a training school for the lengthening lines of young Chinese eager to go to sea for very low pay. In addition, Pao's enormous volume of business lets him work on a profit margin much smaller than usual. As he explains it: "A thin profit from many ships will eventually produce more money than a quick killing."

Banker's Delight. Low overhead and economies of scale have made Pao's fleet attractive to investors who normally steer clear of the speculative shipping market. As a result, Pao has been able to tap, almost at will, the rich and growing capital market in Hong Kong. The Hongkong and Shanghai Banking Corp. has been a steady source of his financing. With its backing, Pao charts the course for his 63-ship fleet through a baffling array of tax-haven companies in Liberia and the Bahamas. The empire is managed through Pao's personal company, World-Wide (Shipping) Ltd.

Pao spends fewer than one-third of his working days in his Hong Kong office. More often he can be found in or en route to shipping capitals on three continents. He nonetheless finds time to keep his 5-ft. 8-in. frame down to a trim 160 Ibs. with ritualistic daily swims. Pao is also an avid golfer, keeping a set of clubs in each of the three cities he visits most frequently, Tokyo, London and New York (three of his four daughters attend school in the U.S.). His wife never travels with him on business. Indeed, she is rarely seen publicly with her husband even on those infrequent occasions when he is in Hong Kong.

At 51, Pao is, like his tycoon contemporaries, well into middle age. What distinguishes him from the other super sealords is the incredible pace at which he has expanded his fleet. With a personal fortune estimated by his business associates at anywhere from $300 million to $800 million, Pao does not ever have to go near a shipyard again. Yet he shows no sign of relaxing. After announcing his latest orders last week in New York, Pao hopped a plane for Tokyo to look for shipyards interested in another maxi-order.

This file is automatically generated by a robot program, so reader's discretion is required.