China has formally established the world's largest shipyard company.
The news comes weeks after the government sanctioned the mega-merger of state-run shipbuilders China State Shipbuilding Corp (CSSC) and China Shipbuilding Industry Co (CSIC). The new company will continue under the CSSC banner.
China Central Television (CCTV) reported that the group has 147 research institutes, business units and listed firms, as well as total assets of CNY 790bn ($112bn) and 310,000 workers.
The move has been nearly 10 years in the planning in a bid to boost operational efficiency.
The two groups have combined revenue of CNY 1trn, a source told the China Morning Post.
“This merger has been in the making since Hu Wenming, a former party leader of the state-owned aviation industry, was assigned to CSSC as party secretary in 2010,” the source added.
“The merger plan was put on the drawing board at a time when the world shipping industry had entered a golden period in 2009, and the business of CSSC and CSIC was at its peak, but [China’s] analysis indicated a decline was on the horizon, as has actually happened in recent years.”
CSIC chairman Hu, 62, retired last month ahead of the merger.
The news indicated that CSSC chairman Lei Fanpei has a strong change of taking over the merged entity.
Aged 56, the younger Lei took the helm at CSSC in 2018 after heading state-owned China Aerospace Science and Technology Corp for four years.
Biggest in the world
The company will be the world’s largest shipbuilding group, with more than 10% of the global orderbook.
The combined entity is set to control more than half of China’s shipbuilding capacity as well as multiple subsidiaries listed in Shanghai.
CSSC, also known as “the southern shipbuilding group”, and CSIC, “the northern shipbuilding group”, were separated in 1999.
The shipyards controlled by the new entity will include Hudong-Zhonghua Shipbuilding, Jiangnan Shipyard, Shanghai Waigaoqiao Shipbuilding, CSSC Offshore & Marine Engineering and Dalian Shipbuilding Industry Co, among others.
This article has been amended to reflect that the merged company will be called CSSC.
