exceeding one million dwt in China last year, compared to 19 enterprises in 2010. The top 10 shipbuilding companies completed shipbuilding production of 36.54 million dwt, making up 47.7% of the total production volume in China.


Market restructuring shows effects In 2011, shipbuilding companies have speeded up fine-tuning their structures and methods to adapt to changes of the market. Firstly, shipbuilding companies have


focused on the development of high end ship types. Tese major shipyards have received orders and delivered several series of new ship types. Hudong-Zhonghua Shipbuilding (Group) Co Ltd has signed contracts to build four 172,000m3


LNG tankers and four plus


two ships of 10,000TEU or more; while Jiangsu’s Yangzijiang Shipbuilding (Holdings) Ltd and Dalian Shipbuilding Industry Co Ltd have been awarded contracts to build 25 10,000TEU boxships and four plus two ships of more than 10,000TEU separately. Secondly, sizeable enterprises with


technical know-how have put extra effort into developing offshore engineering equipment manufacturing. Thirdly, a number of mid-sized companies that are well positioned via accurate market segmentation and specialisation have emerged. Te key products of these mid-sized companies are more competitive in the market. Tey include Zhejiang Shipbuilding Co Ltd’s offshore support vessels; Guangzhou Shipyard International Co Ltd’s product oil and chemical tankers; and Huanghai Shipbuilding Co Ltd’s passenger ro/ro. Fourthly, in order to avoid the cyclical risk of the industry, shipbuilding companies in China have diversified their businesses, expanding into and raising their market shares in non-marine-related fields, such as installation of wind power equipment, coal mining machinery, railway vehicles, underground equipment and automatic logistic equipment etc.


Progress on technology research and development China State Shipbuilding Corp (CSSC) has achieved breakthroughs in the design and development of high-tech vessels. Hudong- Zhonghua Shipbuilding has developed four models of LNG carriers. Among the


The Naval Architect May 2012


four models is a 172,000m3


LNG tanker


equipped with a low-velocity diesel engine and re-liquefaction device which helped the shipyard win an order for four tankers from an LNG project between Exxon Mobil and MOL – the first LNG vessel export order won by a Chinese yard. Te shipbuilding subsidiaries and research centres under CSSC has finished the design and development of a series of 10,000TEU boxships, offshore support vessels and specialised vessels; and enhanced their capability over the design and development of offshore equipment such as 3000ſt drillship and geophysical survey ship with 16 cables. China Shipbuilding Industry Corp (CSIC)


has also achieved important progress over a series of national technology research projects. Jiaolong, a manned deep-water submersible, has successfully completed its 5000m ocean test. Te new generation of CSSC’s own brand 6CS21/32 marine medium-velocity diesel engines has been awarded a certificate by the China Classification Society (CCS) and launched into the market. The most advanced integrated science survey ship in China has been launched. Te group’s self-developed large-scale rotary vane steering gear has received certificate from the CCS. The group has also developed the largest offshore pedestal crane in China. Jiangsu’s Yangzijiang Shipbuilding together


with Marine Design and Research Institute of China have developed the new generation energy-saving 10,000TEU container vessel with their own intellectual property rights over it and have already won orders for the vessel – this was also the largest shipbuilding order ever in China.


Market mechanisms prove effective In 2011, a number of sizeable enterprises have seized the opportunity brought by the changes in the international ship market to improve their business structures via merger and acquisition and restructuring. Among them, Yangzijiang Shipbuilding has acquired 100% of Jiangsu Zhongzhou Marine Equipment Co Ltd and a 40% stake in Jiangsu Xinfu Shipbuilding Co Ltd. Zhejiang Ouhua Shipbuilding Co Ltd has taken over Dexing Shipping Co. Aviation Industry Corporation of China (AVIC) has acquired 70% shares of Shangdong Weihai Shipyard. Rongsheng


Heavy Industries Co Ltd has taken over Anhui Quanchai Group. CSR Corporation Limited and Guangxi’s Yuchai Group had made a joint investment to establish CSR Yuchai Sichuan Engine Co Ltd. China’s shipbuilding enterprises have


also enhanced their innovation, research and development capability via acquiring overseas brands and design companies. Weichai Group has taken over Europe’s


largest luxury yacht manufacturer Ferretti. Yangzijiang Shipbuilding has acquired Singapore marine technology and ship design consultancy CS Marine Technology (CSMT). China Communications Construction Co Ltd has acquired marine design firm Friede Goldman United Ltd (F&G). Hantong Heavy Industry has taken over a German design company, while Wison Heavy Industry has acquired Horton Deepwater. In reaction to the crisis in the shipbuilding


market, merger and acquisition, industry transfer and elimination have become the main contents of business fine-tuning of shipbuilding enterprises in 2011. A number of small- to mid-sized shipbuilding companies that could not adapt to the latest development of the shipping market have gradually faded away from the field.


Strengthening basic management Falling ship prices have brought new challenges to shipyards. Major shipyards and regional key shipbuilding enterprises have actively adjusted their business strategies and kept close contacts with ship owners in order to promote strategic cooperation, look for opportunities in the market downturn, and in particular win orders for high-tech vessels and offshore equipment. Tese companies have analysed various potential risks and seriously reviewed their existing orders, while at the same time ensured the quality of their products and raised production efficiency, in order to mitigate the effect of the market downturn and guarantee timely deliveries. Facing declining ship prices and rising


costs, shipbuilding enterprises have strengthened their management to lower costs and increase efficiency. Companies have started doing in-depth cost analyses and improved their controlling methods. They have also standardised their debt management through strengthening their capital and internal management


25


In-depth


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