China: Shipbuilding industry may not recover until 2020

>> Beijing: Up to July, new orders for domestic shipbuilding industry has decreased by 50 % year on year. Orders hold in shipbuilding companies has also decreased by 30 % year on year.

“Shipbuilding companies have been in a recession since the beginning of the year, to ease pressure, companies have cut their orders for new ships or delay deliveries of orders. But this may be a vicious circle, things may get worse for those companies in the next year,” said a management of a domestic shipbuilding company in a forum of international shipping.

According to local reports, in the 111 orders hold in the famous shipbuilding company China Rongsheng Heavy Industries Co., only 2 are new orders with 152,000 tons of shipload and $55.6 million, decreasing by 95 % year on year.

The lack of new orders and the delay of delivery has made cash flow problems in many companies. Interim report of Rongsheng shows that the company’s debt-ratio has increased by 12.7 % than last half interim report.

Cash flow problems have been infected by the industry chain. Some companies building equipments for Rongsheng said that their account receivables are also delayed.

Banks have been worrying the repaying ability for the industry.”Some experts expect that the industry can’t revive until the year 2020,” said a vice manager-in-general of China Construction Bank.

“Our delivery date has been scheduled to the year 2015, and we are preparing for transformation,” said Chen Wenjun, vice president of Rongsheng.

He added that Rongsheng has been preparing qualified personnels for ocean engineering projects, which was deemed to be a future trend. Chen said that Rongsheng planned to build a company in Singapore to explore the new field.

China Shipbuilding Industry Association also encouraged companies in a report to focus on opportunities of domestic fleet building, development of South China Sea and maritime rights protection, to endeavor to get orders of special purpose-dredger, coast guard vessels and other