chinese shipbuilding
Hot Keywords
2012-05-17 13:27:32

Chinese shipbuilders are in the throes of change into high-value sectors, such as LNG carrier, offshore-related vessels, etc.
According to Economic Research Center of China Shipbuilding Industry Corporation (CSIC), in Q1, only 3.8m-cgt newbuildings were contracted in the world, down by 58.9% year-on-year.
Also, International Bank for Reconstruction and Development reported that the amount of global shipbuilders' damages would reach $50bn in 2012.
In the present, China's shipbuilding industry specialists said that global shipbuilding industry will go through the most difficult time this year. And China is no exception.
Meanwhile, South Korean shipyards contracted 1.93m cgt and keep its global top with over 50% of market share. However, China only contracted 1.05m cgt.
Korean shipbuilders booked orders for high-value vessels, including product carrier, LNG carrier, etc., and offshore facilities, such as FPSO, drillship, etc., as well as bulker, tanker. On the other hand, China mainly inked orders for bulker, small sized tanker, etc.
Chinese shipyards should make a change into high-value sectors and diversify portfolios by developing new ships, high-end technology, etc.

2012-05-07 09:44:53

Chinese shipbuilding companies saw sharp declines in output and new orders in the first quarter, as the industry rolled on the choppy seas of global and domestic slowdowns.
Chinese shipbuilding companies saw sharp declines in output and new orders in the first quarter, as the industry rolled on the choppy seas of global and domestic slowdowns.
New shipbuilding orders fell 48.7 percent year on year to 5.59 million deadweight tonnes (DWT) during the first three months, according to a report released Monday by the National Development and Reform Commission (NDRC), China's top economic planner.
Ship owners around the world tend not to expand their fleets when global demand for goods and services remains sluggish.
For China's ship manufacturers, completed shipbuilding volume also fell 22.5 percent year on year to 11.21 million DWT in the first quarter, with incomplete orders declining 25.3 percent year on year to 141.94 million DWT by the end of March, according to NDRC data.
In the January-March period, the industrial output of China's large shipbuilders totaled 181.3 billion yuan (28.87 billion U.S. dollars), up 7.3 percent from a year ago, marking the fifth consecutive month of deceleration.
Due to slack external demand, ships delivered overseas tumbled 22.3 percent annually to 9.47 million DWT, with the export shipment falling 8.3 percent annually to 64.3 billion yuan.
The NDRC said severe challenges for the country's shipbuilding industry loom ahead, as insufficient external demand, shrinking orders and increasing defaults on contracts will continue to squeeze the sector's profitability.
According to the NDRC, combined profits of shipbuilding companies stood at 4.45 billion yuan in the first two months, up a meager 0.8 percent from a year ago.

2012-04-17 14:29:18

Chinese shipbuilding industry's profits and new order results during January-February period in 2012 have plunged by 15% and 40% each, year-on-year.
IHS Global Insight pointed out that China's 57 of large-sized yards' profits, in the first two months, have dropped by 26%, on average.
Moreover, about a third of China's overall yards have faced with deficits.
Therefore, the Chinese government has taken action to save yards, such as tax reduction, funding, etc. Governmental support has been helpful to some degree, however, it does not seem to have taken care of fundamental problems.
Amid over-tonnage in shipping industry and over-capacity in shipbuilding industry, M&As between Chinese shipbuilders look increasingly indispensable.

2012-04-12 10:25:02

Future of China's offshore business is getting attentions, while Chinese shipbuilding companies and government all are interested in entries into offshore market.
According to an official from Jiangnan Shipyard, it is hard to get a foot on offshore arena and huge amount of funds are needed for the business.
Added that securement of ship financing and working capital as well as high-end technical skills play important part in offshore sector.
Moreover, large-size dock, quay, etc. for offshore platform are needed to enter offshore business, costing huge investment, which is difficult for one yard to handle.
Lastly, he pointed out that winning orders for offshore plant is by no means easy and previous experience, at least offshore repairing track record, is a key to decide whether to secure contracts or not.

2012-03-29 13:20:14

South Korean shipbuilders should actively keep up with global trend to maintain its leading place in market share, especially when Chinese shipbuilding industry is looking for holding various new competitiveness as well as low labor cost, such as technology, quality, efficiency, cost reduction, etc.
Shanghai branch of the Korea International Trade Association reported, "China's major ship-related indices would drop, while export for high-value ship would grow."
China's proportional of export for high-value vessel, marine equipment and offshore facility would increase afterwards.
Amid depressed newbuilding ordering in the world, China's newbuilding delivery, new order and orderbook would decline due to strong Yenminbi and hike in labor costs.
On the other hand, Chinese shipbuilders threaten as they expand into high-value market, with strong support from the government.
China's world largest capacity, restructuring, M&As, governmental support for offshore facility, etc., would be threatening enough to South Korean yards.
Some Chinese shipbuilders have diversified their business into wind power, coal mine machinery, railroad/subway facility, automization logistics equipment, etc., in order to minimize shipbuilding industry's cyclical risks.
Also, they promote strategized cooperation with shipowners, look for a new way to make development in offshore plant and high-end vessel, etc, as well as work hard to build a firm managerial environment by standardizing debt/capital management, etc.
Recently, with support from the government, China's trading of offshore facilities increased to $5bn, taking 10% of global market.
Head of Shanghai branch Kim Kyong-Yong emphasized, "Korean shipbuilders should keep working hard to enhance production efficiency, cut cost, develop IT, etc.,"

2012-03-28 10:27:53

Under troubled market, Chinese shipbuilding industry appears to make alterations according to changing times and circumstances.
Chinese shipbuilders are active in up-grading commercial ship, as well as winning orders for offshore facilities, high-value vessels, green ship, etc, according to the China Association of the National Shipbuilding Industry (CANSI).
For instance, Shanghai Waigaoqiao Shipbuilding (SWS) inked four 180,000-dwt eco-friendly bulkers from U-Ming Marine Transport, which reduced fuel consumption by 15%. Also, Yantai CIMC Raffles Offshore booked an order for one semi-submersible rig last month.
This represents that Chinese marine industry takes actions against recent depression in the market, changes in demand and new environmental regulations. Moreover, Chinese government makes up and carries out policies which boost domestic demand.
Statistics reported from CANSI said, during January-February period, 57 numbers of China's major shipbuilding and shipbuilding-related companies see decreased revenue by 7.3% to CNY 33.6bn ($5.32bn) year-on-year, while net profit fell to CNY 1.88bn, down by 26.2%.
Meanwhile, faced with depressed bulker market by February this year, a cumulative 22 vessels of 1.18m dwt bulkers have been cancelled, 0.8% of orderbook as of the end of February and 61.1% of overall orders cancelled in 2011.
During the same period, China's major yards' ship repair stood at 512 vessels, down by 1% y-o-y.
Major yards have declined overall revenue and average net profit by 15% and 35% each.
CANSI analyzed that slow recovery in global economy and newbuilding price being unlikely to hike caused large-scale structuring of Chinese shipbuilding industry. Despite an estimated 70m-dwt delivery for 2012, relatively slow ordering activity would keep orderbook sliding.
Also, most of newbuildings scheduled for delivery this year had been ordered in low-margin after global financial crisis in 2008. Therefore, shipbuilders would see decrease in earnings.

2012-03-19 09:39:33

The runaway of Wenzhou shipbuilding executive Chen Tongkao has made the city’s business community buzzed with rumors about the status and future of his apparently captain-less company, Dongfang Shipbuilding.
Although Chen's family express their confidence in the operation of the shipyard, something’s obviously wrong at Dongfang — and at other drydocks and shipyards around the country struggling these days after years of rapid expansion based on strong orders from overseas clients.
The shipbuilding industry is slumping, new orders are rare, banks are calling loans and companies are closing.
“Dongfang Shipbuilding is not the first private shipbuilding company to face difficulties, and it won’t be the last,” said an industry insider and former executive at heavy machinery manufacturer Zhenhua Heavy Industries Co. “The question is, if there is a restructuring, what is the direction of the restructuring?”
Mergers, acquisitions, business transformations and even shutdowns rattled the domestic industry last year as weak overseas economies slowed demand for new ships. A recent report by the China Shipbuilding Industry Association predicted further contraction in 2012, and said smaller companies would likely be hardest hit.
The report predicted a significant decline in this year’s deliveries of the most profitable ships, based on last year’s thin order books. It also described a testy business environment in which “ship deliveries will be difficult to be delivered and orders hard to acquire.”
For companies that manage to slog through this slow period, the report said, “making profits will be difficult.”
How long will the struggle last? Perhaps two or three years, according to industry insiders, although they add that private sector companies such as Dongfang are likely to face more serious problems than state-owned enterprises.
Private woes
True, orders have fallen off a cliff for China’s major state-owned shipbuilders as well as their private sector counterparts. But state companies have generally enjoyed relatively easy access to the kind of financing essential for the capital-intensive shipbuilding business.
“Things have been harsh for private ship companies in the past few years,” said Chen. “The U.S. dollar and euro exchange rates have been falling. Exchange rate losses have reached 20%, which has had a particularly large impact on us, as an export-oriented company.”
This domestic industry predicament reflects a global slowdown. A recent report by Shenyin & Wanguo Securities said the world’s shipyards received new orders for 1.99 million deadweight tons worth of contracts in January, down 71% from the same month 2011 and off 36% from December 2011.
January marked first month in two years that new orders fell below 2 million deadweight tons, making it the worst new year start for the global shipbuilding business in five years. Prices have likewise fallen, recently slipping to 2004 levels.
“We expect the depression to last another two or three years,” Chen said, but added an optimistic forecast that “with improvements after the economic crisis in Europe, we’ll turn for the better.”
Chen and his relatives are also pinning hopes on local government and bank financing to support his company through lean times. For example, the Leqing Prefecture government last November formed a group to help Dongfang.
“I hope that through this special period for the company, we have an opportunity for respite,” he said.
But a source with the ship financing department at China Minsheng Bank suggested Chen may be too optimistic in the face of mounting pressure for non-state shipyards.
“Private shipbuilding companies have been filing for bankruptcy for the past two years. This is nothing new,” the banker said.
Indeed, the tenuous status of publicly listed Dongfang has alarmed industry watchers and financiers. In Wenzhou, the source said, Dongfang “is a local star. That its capital chain would break only a few months after its listing has been worthy of market attention.”
Rocky seas
Back in August, when Dongfang listed, investors were attracted to its classic, family-owned business model. The 20-year-old company had grown to become the leading shipbuilder in Wenzhou and ranked among China’s 500 biggest businesses in its class. It’s biggest customers were in Europe and the United States.
The company had significantly expanded production capacity when the industry was thriving in 2007.
Chen said at the time order books were full and the Wenzhou facility had run out of production space. Company executives decided to build a new, 1.1 billion yuan ($174 million) shipyard in Anhui Province’s Congyang County, near Anqing, on the Yangtze River.
The Anhui government put the project on its list of key provincial investment projects, paving the way for a Dongfang subsidiary to acquire 86 hectares for two, 50,000-ton slipways and eight, 25,000-ton standard berths. Plans called for the Congyang yard to churn out more than 400,000 tons of vessels worth about 4 billion yuan combined, creating nearly 10,000 jobs.
Today the Congyang facility’s assets are worth 700 million yuan, against about 300 million yuan in liabilities, Chen said.
A year after the expansion started, the global financial crisis hit and the company’s U.S. orders shrank significantly. Dongfang tried shifting its focus to the European market, but the strategy flopped when the European debt crisis hit.
“After the sudden arrival of the financial crisis, return on investment for orders wasn’t what we expected,” Chen said.
During this period, the company had to delay its plan to go public several times, a process that bit into a shrinking capital pie. And at home, the Chinese government’s tight monetary policy reduced its credit options.
Dongfang reached the brink of bankruptcy in 2011 as banks started calling loans ahead of schedule, said Chen. Today, the group has about 1.2 billion yuan in liabilities.
Financiers were especially jittery because private enterprises throughout Wenzhou started faltering and defaulting on loans in mid-2011.
“After the Wenzhou economic crisis started last year, banks started random checks of major companies,” Chen said. The shipbuilder “was suddenly asked to repay loans in advance. At the time, we were forced to repay 100 million yuan in loans, cutting off our capital chain.
“We’re still facing a capital chain problem.”
For many shipbuilders including Dongfang, a public listing was considered a way around the financing crunch. At first, Chen said, the company tried to list on the Singapore exchange. When that failed, it turned to the AIM.
Dongfang issued 190 million common shares on the AIM but found no takers. Six weeks later, the company privately placed 4,767,700 ordinary shares, raising nearly 1.8 million pounds ($2.81 million). But the process cost Dongfang nearly 100 million yuan.
The company’s prospectus said operating revenues had grown to $127 million in 2010 from $30.1 million in 2008, but over the same period profits fell to $1.3 million from $2.2 million.
When the global shipbuilding business fell sharply in the second half 2011, Dongfang’s losses grew rapidly. It ended the year in the red.
Prospects may soon improve for this family of shipbuilders. Last fall “was the most difficult time for Dongfang Shipbuilding,” said a source at a bank that’s given it credit. “With support from a number of banks, we’re riding through difficulties.
“Wages at the company are now only slightly in arrears,” he said. “But if a bank risk control department is determined to recover loans in advance, Dongfang Shipbuilding will have a real crisis.”
Chen remembers that not long ago his company was welcomed by banks. China Construction Bank’s Congyang branch wrote loans worth 50 million yuan, and the local branch of Huishang Bank provided 20 million yuan worth of liquidity loans as well as a 250 million yuan line of credit.
“Now, these two banks are suing us,” Chen said, although “the local government is coming forward to help us, consulting with the banks for reconciliation.”
Against this hopeful backdrop, Chairman Chen might return to Wenzhou. His son said government officials who want to help the business “need my father to stabilize the morale of our company’s staff.”
Chen fears that if his father returns, and the government decides to restrict his ability to exit the country in the future, the company could lose confidence among international investors.
The company’s next step toward weathering the storm, Chen said, will be to gradually scale back on shipbuilding and shift focus to port machinery-making and services. The company has applied for government permission to build port equipment as part of a business transformation.

2012-03-15 16:46:14

Troubled shipbuilding industry in China count on the Chinese government's direct financial support, saying that shipbuilders are pressured by financial difficulty with diversified payment system which would attract ship owners. 
The Ministry of Industry and Information Technology of China (MIIT)'s recently reported '12th five-year economic development plan for ship engineering' notes that Chinese government would put more investment on science technology and develop mainly shipbuilding, ship repair, marine equipment and offshore facility industries with financing system.
In particular, the plan covers that the government would make shipbuilder-friendly financial product and service in cooperation with financial institutes and expand financing for shipbuilding-related companies.
Chinese shipbuilding industry player said that specific policy regarding exchange rate would be needed, such as using one currency in loan and repayment, etc.

2012-03-13 09:30:26

China aims to increase annual sales by domestic shipbuilders to CNY1.2 trillion (US$189.7 billion) by 2015 as it works toward its goal of becoming the world's leading shipbuilding country, the Ministry of Industry and Information Technology said Monday.
China also plans to raise the value of annual shipbuilding exports to more than US$80 billion by 2015, the ministry said in a five-year plan for the shipbuilding industry.
The plan provides new details regarding China's push for significant growth in domestic shipbuilding at a time when the industry already faces overcapacity. A recent report by the China Association of the National Shipbuilding Industry showed that total new orders from more than 1,500 shipbuilders in China fell more than 50% last year. Shipbuilders have said demand for commercial ships will remain poor this year amid continued global economic weakness.
A central part of the ministry's plan for developing the sector is concentration of capacity. The plan calls for China to push forward with "structural improvements" to the industry, with the goal of 70% of the country's shipbuilding capacity concentrated among its 10 largest shipbuilders by 2015. The plan also says China should aim to claim at least five of the world's 10 largest shipbuilding companies by 2015.
"That's going to take some consolidation," said Matthew Flynn, managing director of Worldyards, a research firm. "At the moment, the top 20% of shipbuilders (in China) account for 63% of national capacity."
But Flynn said the sales targets, while aggressive, appeared achievable.
"They'll have to work hard to take orders in, considering the state of the shipping market. (But) this is doable assuming that the high yen keeps the Japanese somehow out of the market," Flynn said. Worldyards estimates China's existing order book for offshore and commercial merchant shipbuilding at US$109 billion, compared with US$140 billion for South Korea and US$41 billion for Japan.
The growth target would also require Chinese shipyards to continuously work to take market share from international shipyards, particularly in Korea, Flynn said. While Chinese yards will need to improve the quality and efficiency of new ships to appeal to a "buyer's market," they also stand to benefit from any appreciation of the Korean won, he said.

2012-03-09 09:31:39

As global shipbuilding market being depressed with newbuilding price taking a downward trend, Chinese shipbuilding industry also have suffered from terribly poor order contracts.
According to statistical data for February, newbuilding price for capesize bulker is $47m, panamax $27.5m and handymax $25.5m, which all dropped month-on-month.
In case of tanker, VLCC, suezmax and aframax all declined to $97.5m, $59m and $51.5m, respectively.
Containership is not very different from other vessels. Newbuilding 6,600-teu boxship now costs around $67m, similar to the lowest mark in 2004. It is even unpredictable whether the price would keep falling or turning around afterward.
Shipbuilders would continue to have difficulty in winning new orders, since owners would still be reluctant to place newbuildings when rates keep falling by fleet over-supply, said China Fortune Securities.
China's Top 10 shipyards are going through crisis as well, having just contracted cumulative of 1.29m dwt in February.
The 10 shipbuilders are Dalian Shipbuilding Industry Corporation (DSIC), Shanghai Waigaoqiao Shipbuilding (SWS), Hudong-Zhonghua Shipbuilding, New Century Shipbuilding, Penglai Bohai Shipyard, Guangzhou Shipyard International (GSI), Jiangsu Yangzijiang Shipbuilding, Jiangnan Shipyard, Shanhaiguan Shipbuilding Industry (SHGSIC) and Qingdao Beihai Shipbuilding Heavy Industry (BSIC).

Page 9 of 10
Most Views
Home About Us Contact Us Help Center Advertising

Copyright © 2006-2017 沪公网安备 31011502004435号 All Rights Reserved