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Jinhai Heavy Industry: 'Chinese Yards Lack Efficiency'
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Source:Maritime CEO

Amid the doldrums in the shipbuilding industry, Chinese yards are struggling to survive. Jinhai Heavy Industry (JHI), an affiliate shipyard of China's transport giant HNA Group, is eyeing a major transformation. The yard has been stung by many cancellations.

According to Li Weijian, president of JHI, the shipyard has been making efforts to optimise its assets through streamlining its businesses and enhancing its technical level.

JHI has spun off and integrated several departments of the shipyard in the areas of design, sales and production, to make them run as independent subsidiaries to increase operation efficiency.

"The move has made our operation network more clear," Li says.

"I think currently the major problem in the domestic shipbuilding industry is not overcapacity but lack of efficiency. It might not be obvious in the good times, but when the market got worse, the drawbacks in production have been enlarged by the capital leverage," Li says.

According to Li, JHI is transforming the shipyard from traditional heavy industry to a precision industry firm in terms of both production and technology in order to get more high-value added orders.

Currently JHI has on hand orders for 62 vessels, with high-value added vessel types – including mega containerships, VLCCs and offshore platforms – accounting for more than 90% of the orders.

The shipyard has also used some idle capacity to develop its ship repair business. JHI established a dedicated ship repair subsidiary in 2015 and is now looking to develop a ship repair base in Zhoushan.

"Zhoushan has all the conditions needed to become the world's largest ship repair base," Li said.

"In these challenging times, the shipbuilding industry needs a re-balance between supply and demand. We as a shipyard need to join the revolution in both production and technology, so we can recover fast when the next round of opportunities come," Li concludes.

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