Chinese Shipyard Closes Due to Lack of Profitability
One of China’s mid-sized shipbuilders, Tianjin Xingang Ship Heavy Industry, announced that it will stop all operations as of the end of October. The disbanding of the company comes despite the recent resurgence in shipbuilding orders and China’s overall leadership in the industry.
The Shanghai International Maritime Information Research Center reported that the shipyard is shutting down for the second time in its history due to heavy financial debts. They reported that insufficient profits from shipyard operations in recent years led to the decision to cease operations. The shipyard announced that it has discharged its labor contracts with employees and will stop all of its operations and production by the end of the month.
Tianjin Xinjiang had relocated its operations in 2017 focusing both on new ship construction up to 500,000 tons and ship repair for ships up to 300,000 tons. It had a capacity to build ships up to about 1,000 feet in length.
In operation since 1940, the shipyard had previously been reorganized about twenty years ago. It filed for bankruptcy in 2000 but completed a restructuring of the operations the following year.
Tianjin completed construction to the 39,000 gross ton Global Mercy for Stena RoRo in June 2021. The vessel, which is the world’s largest civilian hospital ship, will begin operations in 2022 for Mercy Ships. First steel for the vessel was cut in 2015 with the floating out taking place at the beginning of 2020. Especially design for Mercy Ships, it is being billed as the most technologically advanced ship of its kind. It has six operating rooms, 200 beds, a laboratory, general outpatient clinics, and eye and dental clinics. The total area of the hospital department is more than 75,000 square feet.
The shipyard also completed the construction of two 210,000 dwt bulk carriers built for COSCO Shipping Bulk Transportation Co. The vessels, each of which measures 984 feet in length, were delivered in May and June 2021, promoted as a new generation of a large bulk carrier. The shipyard said the vessels’ design incorporated “intelligence, green, environmental protection, energy-saving, and reliable” technology.
The reports indicate that Tiajin’s operations will likely be divided up going to other parts of the Chinese state-owned China State Shipbuilding Corporation, which has also been undergoing a reorganization to improve results. Tianjin's shipbuilding business is expected to be taken over by Dalian Shipbuilding Industry while the ship repair business will become part of Shanhaiguan Shipbuilding. The reports did not include any details on the size of the shipyard’s orderbook.