Firm eyes nuclear power gear
Shanghai Electric Group is building a 3.2 billion yuan seafront production base to handle nuclear and gas-fired power equipment, as it looks beyond the construction boom driven by coal-fired plants.
Chairman Wang Chengming yesterday said that when the plant at the mouth of the Yangtze River in Shanghai came on stream in July, it would allow the company to produce certain heavy equipment that it had been unable to make.
It has budgeted a 3.6 billion yuan capital expenditure for this year, up from 2.4 billion yuan last year. The company had obtained a contract worth 'several million yuan' to supply equipment for two 600-megawatt nuclear generators for the Qinshan Phase Two nuclear project in Zhejiang province, Mr Wang added.
As the central government is expected to set up two to three 1,000 MW nuclear plants annually until 2020, Shanghai Electric and rivals Harbin Power Equipment and Dongfang Electrical Machinery are vying for projects to plug an order gap that would be created by an expected decline in coal-fired plant construction from 2008.
Mr Wang admitted that a shortage of natural gas supply and high prices had slowed construction of gas-fired power plants and growth in equipment sales.
The firm posted a 53.5 per cent rise in net profit to 1.67 billion yuan, buoyed by the power equipment unit, whose operating profit surged 128 per cent and made up 74.4 per cent of group operating profit.
Mr Wang is confident the company will achieve power equipment sales of at least 25,000 MW worth 20 billion yuan this year.
The firm delivered 20,000 MW worth 19.49 billion yuan last year and received about 5.5 billion yuan of new orders in the first quarter. Total outstanding power equipment orders stood at 70,000 MW.