The Straits Times / The Business Times News on Cosco

Cosco Shipyard wins US$185m contracts

MAINBOARD-LISTED Cosco Corp Singapore, the shipyard and bulk carrier unit of China's biggest shipping line, said yesterday its China-based shipyard subsidiary has won a four-vessel order worth US$185.2 million from Chinese-Polish Joint Stock Co.

The Cosco Shipyard Group - 51 per cent owned by Cosco Singapore - will build the 30,000 deadweight ton vessels at its Dalian shipyard from mid-2007 onwards, with delivery dates between March 2009 and April 2010.

The Chinese-Polish joint venture has an option for two additional heavy-lift vessels that must be exercised by March 31, 2008.

Cosco Singapore, through its shipyard unit, has been winning more orders to repair and convert vessels that give higher profit margins.

A new focus on newbuilds, including a contract announced last month for six supramax bulk carriers and one semi-submersible oil rig - its first foray into the lucrative offshore rig market - signalled the group's intent on growing its shipyard business. Ji Hai Sheng, president of the Singapore-based company, said he expects more high-yielding orders, driven by rising energy demand and new shipping regulations.

'Going forward, Cosco Shipyard will continue to build new special purpose vessels designed to meet the specific needs of our customers,' he added.

Shares of Cosco Singapore fell 0.7 per cent to close at $2.95 before the announcement. The stock has gained 28 per cent this year - the third-best performer in the Straits Times Index.