Leading Chinese shiprepairer Haizhou Shipyard, which has filed for bankruptcy with debts of CNY 3.3bn ($490m), has a history of fatalities that appear to have contributed to its financial troubles.
Haizhou repairs all ship types and is popular with international companies. It has grown considerably over the past decade.
In 2009, it spent CNY 580m expanding its facilities by adding a VLCC dock, a large dry dock and some berths.
The yard now has one 300,000-dwt repair dock and two that can handle 80,000-dwt ships, and it can work on more than 200 jobs per year.
It has been in operation since 1963 but it became officially established in 1998 with registered capital of CNY 225m.
Conversion cash-in
As one of China’s largest shiprepairers, it should have been looking forward to cashing in on conversion work from fitting ballast-water treatment systems and exhaust-gas cleaning systems for IMO 2020, but instead its demise has raised questions over safety levels.
It has emerged that the yard suffered a series of major accidents that appear to have hit its finances.
According to local reports, in 2014 seven died in an explosion while repairing the 46,800-dwt tanker Oaktree (built 1993) — an accident that cost the yard CNY 6.4m.
In November 2015, a crane collapsed killing two workers.
In August 2017, two employees died while repairing a Singapore-registered panamax bulker. The accident was said to have been caused by a CO2 leak and cost the yard CNY 600,000.
Last May, one worker died in a forklift truck collision.
Sources said that while newbuilding yards in China are closely monitored for safety, often by their shipowner customers, this does not always apply to the repair industry, where the turnover in work is quicker.
An investor is being sought to revive the yard and, with the prospect of IMO 2020 business and ballast-water convention work in the pipeline, there are some prospective buyers.
However, local sources suggest that tackling safety may also play an important part in bringing the yard out of bankruptcy.
