Merger of China Shipbuilding's two units to improve efficiency

State-owned China Shipbuilding Industry Corp or CSIC, the primary contractor for China's naval force, is transferring the assets of its subsidiary Qingdao Beihai Shipbuilding Heavy Industry Co to Wuchang Shipbuilding Industry Group Co, another of its subsidiaries, to enlarge the latter's capacity in building both military and commercial vessels.
The Hubei-based Wuchang Shipbuilding is one of China's manufacturing bases to build conventional submarines and frigates, as well as maritime defense equipment and law-enforcement vessels.


Subsequent to the asset transfer, it has restructured the management of Shandong-based Qingdao Beihai Shipbuilding, whose main business is ship maintenance and building bulk ships with an annual capacity of 3 million deadweight tons. It is also capable of repairing 212 vessels per year.


The CSIC's press office in Beijing told China Daily that Wuchang Shipbuilding specializes in building warships, law-enforcement vessels, offshore engineering ships and large-scale steel structures, but it needs to improve its ability in building large surface warships and long-distance commercial carriers.


"Even though Qingdao Beihai Shipbuilding has a strong ability in building large-scale bulk ships, it has a narrow product pipeline," said the CSIC press office. "The integration (of Qingdao and Wuchang) would have complementary advantages. The new shipyard would be capable of producing not only military ships, including the next-generation frigates and amphibious warfare ships, but a wide range of commercial ships such as chemical tankers, mega-container ships and wood-cargo vessels."


In 2015, Wuchang Shipbuilding pulled in 12 billion yuan ($1.83 billion) in sales revenue, while Qingdao Beihai Shipbuilding netted 4.05 billion yuan. With a total investment of 3.9 billion yuan, Wuchang Shipbuilding also operates a manufacturing facility to produce offshore engineering products in Qingdao.


The article transsshipment from China Daily