Workers at South Korea's Samsung Heavy Industries Ningbo have taken strike action in protest over the yard’s planned closure.
Shipbuilding sources said workers downed tools on 15 September and are seeking an improved compensation package.
According to local reports, the yard’s parent company — Samsung Heavy Industries — has already lined up CNY 750m ($116.5m) in compensation for its Chinese workers.
SHI did not respond to emails from TradeWinds.
A local shipbuilding player said the proposed payout by SHI is being viewed as inadequate, with workers seeking compensation equivalent to two or three years of their annual salary.
“It would be difficult for yard workers to find new jobs especially for those above 45 years old,” the shipyard source said.
The source added that, despite an approaching typhoon and heavy rains, workers are continuing with demonstrations at the shipyard, with some moving into the city to protest.
“The closure of Samsung Ningbo is set for today, but we have not heard from the management,” said the shipbuilding source.
He added that yard operation has stopped and there are some unfinished blocks that Samsung Ningbo is building for Jiangnan Shipyard and Hudong-Zhonghua Shipbuilding.
The closure of Samsung Ningbo is part of a local government plan to develop the site — which is located near Beilun port in the district of Ningbo — into a gas and petrochemical plant and port terminal.
The South Korean shipbuilding giant wants to maintain its Chinese shipbuilding facility and has been in discussions with local Beilun government bodies over its closure for the past two years.
Shipbuilding capacity is in high demand after the newbuilding market bounced back strongly this year from the coronavirus pandemic, with containerships and bulk carrier markets leading the recovery.
Local shipbuilding sources said it does not make sense for SHI to close the Chinese facility at a time when there is strong demand for newbuildings, a shortage of capacity and prices are rising.
One Chinese shipyard manager said he thinks that the Beilun government would have given SHI a good compensation package for taking back the land lease. He added that it is likely SHI would also have been offered an alternative shipbuilding site for the yard.
“This is the standard practise in China when the state wants to take back the land,” said the yard manager.
SHI signed a 50-year land lease contract with the local government. Samsung Ningbo was registered in 1995 and started off in the construction of hull block sections, but turned to newbuildings during the market boom.
Its shipbuilding record includes 17 MRs for Maersk Tankers and Capital Maritime & Trading.
During the recent market downturn, it has returned to constructing block sections for containerships and LNG carriers. Samsung Ningbo employs close to 3,000 workers including subcontractors.
SHI’s other Chinese facility, Samsung Rongcheng, which is also involved in block construction, is currently hiring workers.