COSCO and Kawasaki to form second JV

COSCO Group, China’s shipping conglomerate, has signed a deal with Japan’s Kawasaki Heavy Industries Ltd. to build a shipyard in northeast China, their second such venture in the country.

COSCO will control 70% of the facility, which will cost 3.8 billion yuan ($500 million) in its first phase, and Kawasaki will hold the remainder. Construction of the facility, based in the city of Dalian, is scheduled to start before the end of the year, with an annual capacity of 2 million deadweight tonnes in the first phase while in the second phase the capacity would be ramped up to 2.5 – 3 million dwt.

The facility will produce oil tankers, bulk carriers and other vessels for the COSCO group as well as other shipping companies. COSCO and Kawasaki Heavy first teamed up eight years ago to build a shipbuilding facility in the eastern Chinese port city of Nantong, near Shanghai. Capacity at that venture will eventually rise to 5 million dwt.