Ex-Chinese shipbuilder Jiangsu Rongsheng Heavy Industries is apparently making a comeback, inking a letter of intent for 10 bulker newbuildings with Greek shipowner George Economou’s Cardiff Marine.
The Nantong-based Rongsheng was once China’s largest privately owned shipyard but the debt-laden yard exited the shipbuilding business in 2014 following the global financial crash.
Shipbuilding sources said former Rongsheng’s chief executive David Luan has been rehired by his former boss, Chinese businessman Zhang Zhirong, to restart Rongsheng.
They added that Rongsheng is returning to the shipbuilding sector as major shipyards in China are sitting on packed orderbooks and have sold out early delivery slots.
Sources said Cardiff Marine’s provisional newbuilding contract at Rongsheng consists of four capesize bulker carriers and six kamsarmax ships. The newbuilding price and delivery schedule for the 10 newbuildings were not known.
Luan was not contactable, while Cardiff Marine did not reply to emails seeking confirmation.
Cardiff Marine was one of the shipping companies that had ships built by Rongsheng. The yard delivered three suezmax tankers to the owner in 2014 and 2015.
Economou-led DryShips also ordered four ice-class 75,800-dwt bulker newbuildings with Rongheng in 2010. But the contract for the quartet was cancelled in 2014 because of financial difficulties at the shipyard.
News of Rongsheng plotting a comeback was first reported in May this year. Then, the shipyard was said to have been approached by Brazilian mining giant Vale for VLOC newbuildings. The Brazilian mining company was reported to be seeking 14 dual-fuel 300,000-dwt ore carrier newbuildings.
At that time, several shipbuilding observers were doubtful of Rongsheng’s revival as the yard has not been in operation for several years and restarting its facilities and hiring workers would require substantial funding.
However, online VesselsValue and IHS Markit show Rongsheng has launched one 75,800-dwt panamax bulk carrier (Hull No 1145) for Minsheng Financial Leasing. The panamax bulker to be delivered in April 2023 as part of a four-ship order that the leasing company inked in 2010. The other three ships were delivered between 2012 and 2014.
Rongsheng was established in 2006 during the shipbuilding market boom. The shipyard has four dry docks and was able to produce 5m dwt of vessels per year.
According to Clarksons’ Shipping Intelligence Network, Rongsheng delivered 94 ships between 2008 and 2017, of which 16 were VLOCs of 400,000 dwt.
The Chinese shipyard was also reputed for building suezmax tankers. Shipping companies that ordered newbuildings there include John Fredriksen’s Frontline, Golden Ocean, Sinokor Merchant Marine, Teekay, CMA CGM, and Dynacom, among others.
