• Tue
  • Sep 16, 2014
  • Updated: 1:21pm

Wah Kwong endorses mainland shipyards

PUBLISHED : Monday, 22 July, 1996, 12:00am
UPDATED : Monday, 22 July, 1996, 12:00am

Chinese shipyards can build good quality vessels at competitive prices with proper supervision by Chinese-speaking supervisors, Wah Kwong managing director George Chao Sze-kwong says.


He said Chinese shipyards, which had progressed a great deal over the past five years, had successfully built vessels for overseas Chinese people as they could also communicate in Chinese.


'Design is not a problem [with Chinese shipyards] but efforts had to be put into upgrading them,' Mr Chao said after the naming and launching ceremony of Wah Kwong's log and bulk carrier, the Carina Venture which was built at the Hudong shipyard in Shanghai.


Mrs Christal Riemann, wife of Gerhard Riemann, member of the executive board of German conglomerate Krupp Hoesch International, performed the launching ceremony.


Mr Chao's wife, Lily Chao, and Wah Kwong president Frank Chao Sze-bang were also present. The 27,000 tonne vessel, the last of a series of four vessels built by Wah Kwong, has a speed of 14 knots and is 18,070 gross registered tonnes.


The Spring Venture was delivered in May, the Forest Venture on June 28 and the Happy Venture will be delivered in September.


The Carina Venture, to be delivered in November, will be used for log trading between New Zealand and the United States.


The two-year charter of the vessel to Mitsui OSK Lines was arranged by Rodskog Shipbrokers.


Wah Kwong has invested about US$75 million (about HK$579.75 million) in the construction of the four vessels.


Mr George Chao said Hudong shipyard used to build only two vessels a year. They now build eight vessels annually.


'The shipyard has built four of our vessels and they have orders for 15 more, from friends whom we introduced from abroad,' he said.


Mr Chao said the Carina Venture type of carrier was popular with New Zealand cargo owners.


One of the biggest problems facing China's shipowners was the introduction of 17.5 per cent value-added tax and import duties which had made it more expensive for them to build vessels on the mainland, Mr Chao said.


As most of the components, like navigation equipment and other parts, had to be imported, taxes drove the prices up forcing them to turn to foreign shipyards to build their vessels, he said.


However, it was cheaper for foreigners to build their vessels in Chinese shipyards as they were not taxed because the vessels were exported on completion, he said.


Mr Chao said the Chinese Government had to rectify this weakness in the system.


Shanghai vice-mayor Meng Jianzhu said prior to the ceremony that the municipal Government was willing to assist investors in any way they could.


Mr Meng said Shanghai was a big economic centre with a population of 16 million people, which provided the Pudong free economic zone to industrialists to set up businesses.


'If you enter the Shanghai market, you are entering the Chinese market,' he said.


He welcomed Mr Riemann's group, which is the world's largest stainless steel producer, to set up a stainless steel plant in Shanghai.


Mr Meng said Shanghai, which had ample skilled labour and good locations suitable for industries, would become the economical and financial centre of East Asia.


Mr Chao said Shanghai had young and capable leaders in Government who were willing to provide help to create a friendly investment climate.


Wah Kwong has a fleet of about 30 vessels.


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