SWS joins top 10 club

The Shanghai Waigaoqiao Shipbuilding Co (SWS), the country’s top shipbuilder, churned out 3.11 million DWT of ships last year, making it the world’s eighth-largest shipyard. This was the first time a Chinese shipbuilder had crossed the 3 million DWT output mark and edged into the world’s top 10 shipbuilding league table by output.

“It is a milestone in the history of China’s shipbuilding industry,” said Wu Di, the company’s chairman, at a ceremony to mark the event. “Building on our success, we are to make an even greater number of ships in 2007,” said Chen Minjun, the company’s general manager.

Despite the rising cost of raw materials such as steel, the shipbuilder still managed to make a record profit of 1 billion Yuan ($128 million) in 2006. “This is largely thanks to our increased spending on production technology and innovation, which offset the rising costs associated with high steel and other material prices,” said Chen.

The company has orders for more than 80 ships, totalling 14 million DWT, valued at about $5 billion which will keep its workforce busy until 2010. The healthy order book also makes the Shanghai-based shipyard one of the world’s top 10 shipbuilders in terms of orders received, according to London-based shipbroker Clarkson Plc.

The country’s flagship shipbuilder, jointly owned by China State Shipbuilding Corporation, Baosteel, Shanghai Electric and the China Shipbuilding Trading Corporation, delivered 2.17 million DWT in 2005, becoming the first domestic shipyard to cross the 2 million DWT mark.

China, now the world’s third-biggest shipbuilder by output after Japan and South Korea, is striving to become the world’s top shipyard by 2015, when the country is expected to build 24 million DWT of ships a year. In 2005, China built about 12 million DWT of ships, accounting for 18% of the world’s total, according to figures from the China Association of National Shipbuilding Industry. The national output is expected to have reached 14 million DWT in 2006.

Chinese shipyards filled about 20% of global orders for ships measured by cargo capacity, according to London-based shipbroker Clarkson Plc. Hyundai, the world’s biggest ship maker and other South Korean shipbuilders took 35% and Japan’s shipyards controlled about 32%, according to Clarkson.