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Consolidation will sink small shipbuilders
By Richard Fu |
April 16, 2013, Tuesday
|
Online Edition
Online Edition
Many small Chinese shipbuilders will be lost over the next five years amid an industry consolidation, according to the country's largest private-sector builder.
"Top shipbuilders, say, the top 20, will fare better," predicted Chen Qiang, chairman of China Rongsheng Heavy Industries Group Holdings.
"But I doubt whether others out of 100 will still exist."
Shipyards are struggling with overcapacity and declining demand amid a weak global economy, as well as inflation and rising labor costs.
Orders tumbled 43.6 percent last year to 20.41 million deadweight tons in China, according to data from the Ministry of Industry and Information Technology.
Chen, speaking at the TradeWinds Shipping China conference today in Shanghai, said government support for high-end manufacturing and the ocean engineering industry will help shipbuilders.
"We are receiving support from the local Jiangsu Province government,"he said.
He added that Chinese companies should focus on technology to better compete with rivals in South Korea and Japan.
Rongsheng, the builder of large iron ore carriers for Brazil's Vale, has posted a net loss of 572.6 million yuan (US$92.6 million) for 2012, the worst since the Hong Kong-listed company started reporting results in 2007.
"Top shipbuilders, say, the top 20, will fare better," predicted Chen Qiang, chairman of China Rongsheng Heavy Industries Group Holdings.
"But I doubt whether others out of 100 will still exist."
Shipyards are struggling with overcapacity and declining demand amid a weak global economy, as well as inflation and rising labor costs.
Orders tumbled 43.6 percent last year to 20.41 million deadweight tons in China, according to data from the Ministry of Industry and Information Technology.
Chen, speaking at the TradeWinds Shipping China conference today in Shanghai, said government support for high-end manufacturing and the ocean engineering industry will help shipbuilders.
"We are receiving support from the local Jiangsu Province government,"he said.
He added that Chinese companies should focus on technology to better compete with rivals in South Korea and Japan.
Rongsheng, the builder of large iron ore carriers for Brazil's Vale, has posted a net loss of 572.6 million yuan (US$92.6 million) for 2012, the worst since the Hong Kong-listed company started reporting results in 2007.
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