The Straits Times / The Business Times News on Cosco

Cosco Shipyard in 6b yuan yard expansion

(SINGAPORE) The Cosco Shipyard Group (CSG), in which listed SembCorp Marine owns 30 per cent, plans to spend six billion yuan (S$1.2 billion) to expand capacity, including the building of a new shipyard in Dalian.

It secured state approval for a two billion yuan plan last month for its Nantong facility and is now seeking the nod for a four billion yuan project in the northern port city of Dalian, reported Hong Kong's The Standard newspaper.

'We hope the Dalian project can get the approval from the National Development and Reform Commission (NDRC) next year,' said CSG managing director Song Dawei in the report.

The new shipyard will have a capacity of about 2.5 million deadweight tons (dwt) and will supplement the group's existing facilities at the Cosco (Dalian) Shipyard Co Ltd.

Cosco Dalian will inaugurate a new VLCC (very large crude carrier) floating dock in late October. With a 300,000 dwt capacity and a lifting capacity of 65,000 tonnes, it will be the largest floating dock in the world.

CSG, a subsidiary of the China Ocean Shipping Group, is China's largest shipyard group.

Over at Nantong, the two million yuan investment cleared by the NDRC last month will yield a new facility with capacity of 1.54 million dwt when it is completed by 2008.

The combined Nantong yards are aiming to build container ships, bulk carriers, car carriers, oil tankers and ultimately LNG (liquefied natural gas) carriers.

'We have secured orders worth more than US$1 billion and are fully booked until 2008,' said Mr Song.

Last year, the Nantong yard built more than 700,000 dwt of vessels, generating a net profit of nearly 200 million yuan, according to Mr Song.

Further expansion already on CSG's books includes a 500,000 dwt drydock at the group's Zhoushan shipyard, slated for completion by 2006/2007.

CSG also has shipyard facilities in Guangzhou and Shanghai.

China is aiming to be among the world's largest shipbuilders. Last year, its share of global newbuilding orders rose two percentage points to 17 per cent, amounting to nearly 8.5 million dwt.

In November 2004, Cosco Investment (Singapore) acquired a 51 per cent stake in the enlarged CSG, adding to its 40 per cent stake in Cosco Dalian and its 50 per cent stake in Cosco Nantong then.