COSCO Shipping Heavy Industry, China's third-largest shipbuilder by output, plans to reduce the number of its offshore construction shipyards from five to two by 2020.
Under the plan, shipyards in Nantong, Zhoushan and Dongguan will be closed. Shipyards in Qidong and Dalian will remain open as they also build polar ships, drilling platforms and cattle carriers, reports China Daily.
Declining international oil and shipbuilding prices, growing costs for materials and labor have become factors squeezing shipyards' earning ability globally," a COSCO spokesman said.
Established in December 2016, the company was formed out of the previous COSCO Shipyard Group, COSCO Shipbuilding Industry and China Shipping Industry. COSCO Shipyard and China Shipping Industry all reported financial losses last year.
More Yard Closures
In November, China set new requirements for its "White List" of shipyards that are likely to reduce the number of the state-approved yards to 59, down from 71 – a continuation of the trend towards consolidation in the sector.
Since then, seven Chinese shipyards have formed an alliance to share rig building resources. The China Offshore (Deepsea) Industry Alliance, was established on December 28, 2016, and includes Yantai CIMC Raffles, Shanghai Zhenhua Heavy Industries Company (ZPMC), COSCO (Qidong) Shipyard, Shanghai Waigaoqiao Shipbuilding (SWS), China Merchants Heavy Industry (Shenzhen), Dalian Shipbuilding Industry Offshore and COSCO Shipyard.
The yards are all on the Chinese government’s November 2015 White List.