Bulk carriers help fill Rongsheng order book

PUBLISHED : Saturday, 02 July, 2011, 12:00am
UPDATED : Saturday, 02 July, 2011, 12:00am


China Rongsheng Heavy Industries Group, the mainland's largest privately owned shipyard, is set to deliver at least 35 ships this year out of a total order backlog of 111 vessels worth US$7.1 billion.

'We estimate no less than 35 vessels will be delivered this year,' said Cynthia Zhang Jin from the firm's investor relations division.

The ships are expected to include the first of a dozen 400,000 deadweight tonne (dwt) Chinamax iron ore carriers ordered by Brazilian mining company Vale. The first vessel was due to be delivered earlier this year but was postponed at least until next month. A further four 400,000 dwt ore carriers were ordered by Oman Shipping from China Rongsheng Heavy Industries in 2009.

Confirmation of this year's ship deliveries came after the shipyard said it recently secured orders from three European shipowners for 10 205,000 dwt dry cargo Capesize bulk carriers and four 6,600 teu (20-foot equivalent unit) container ships.

Zhang said the shipyard, which listed in Hong Kong at the end of last year, was in 'no position to reveal' details of the contract prices for the new ships. But ship brokers said a 205,000 dwt bulk carrier typically cost around US$65 million at a mainland yard, while a 6,600 teu container ship cost between US$65 million and US$70 million.

The shipbuilder said the deal for the Capesize ships was placed by a European ship owner and was one of the largest contracts won by a mainland shipyard this year.

'The vessels are tailor-made ship types with shallow draft and lower fuel consumption' with a daily fuel oil consumption of less than 60 tonnes, the company said.

China Rongsheng said the container ships also feature the latest fuel-efficient technology. This will see the average speed of the ships cut from 25 to 21 knots to reduce fuel consumption and exhaust emissions, while the capacity of the ballast water tanks has been reduced to achieve higher fuel efficiency.

Zhang said the latest contracts have been included in the shipyard's backlog of orders which will keep the firm busy until 2016. The orders include deals for 49 Panamax dry cargo bulk carriers of around 80,000 dwt, 16 Suezmax tankers of about 160,000 dwt and four super tankers of about 300,000 dwt.

Contracts for the 14 new ships were cemented as China Citic Bank agreed to advance up to 11 billion yuan (HK$13.24 billion) to the shipbuilding group.

The financing package comprised a 9 billion yuan credit line to Jiangsu Rongsheng Heavy Industries from the Nanjing branch of China Citic Bank to pay for the construction of shipbuilding and offshore engineering facilities.