China Shipbuilding Industry Corp (CSIC) chairman Hu Wenming has retired ahead of the formal merger of his company and China State Shipbuilding Corp (CSSC), China’s two largest state-owned shipbuilding conglomerates.
Hu, 62, is at the lower end of the general retirement age for Chinese executives at state-owned companies between 60 and 65.
The retirement news, announced on the CSIC website, indicates 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.
Having been in the works for years, the CSIC-CSSC merger is part of Beijing’s long-stated ambition to combine state-run enterprises to improve operational efficiency.
The consolidation could be finalised by the end of 2019, creating the world’s largest shipbuilding group that owns more than 10% of 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 northern shipbuilding group”, and CSIC, “the southern shipbuilding group”, were only 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.
While yard operations are not expected to be affected initially, the consolidation may mean some losses in headcounts of mid- and senior level managers in group operations.
Hu’s career
Hu is widely thought to have played an important role in the merger process, having led both CSSC and CSIC for much of the past decade.
After serving as senior executives at China North Industries Group Corp and Aviation Industry Corporation of China, Hu joined CSSC in 2010 as vice-president and leader of the company’s Communist party group.
Hu was elected as CSSC chairman before being transferred to CSIC for the same position in 2015.
