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July 21, 2009

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Home » Business » Manufacturing

Zhenhua clinches US$2.2b deal

SHANGHAI Zhenhua Heavy Industry Co yesterday said it has signed a contract for marine engineering products worth US$2.2 billion with Spain's ADHK.

The Spanish company will buy 10 offshore drilling platforms, seven land rigs and two cranes from the port machinery maker.

This is the biggest export contract for a domestic company in the equipment manufacturing industry to date. It is also the first time a Shanghai firm will build an offshore platform on its own.

Zhenhua received export credit from China Development Bank and China Export and Credit Insurance Corp.

The Shanghai-listed company changed its name from Zhenhua Port Machinery Co to Zhenhua Heavy Industry Co in May as part of its move to expand its marine engineering business. Its target is to generate 35 billion yuan (US$5.1 billion) in output value this year and marine engineering products are expected to contribute 10 billion yuan.

"Developing marine engineering products will be the focus for China to develop its shipping and manufacturing industry," said Wang Jinlian, secretary general of the China Shipbuilding Industry Association.

Zhenhua reaped 27.4 billion yuan in sales last year and 2.5 billion yuan in profit.

Its shares have been suspended from trading since last Wednesday, according to a statement sent to the Shanghai Stock Exchange.


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