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Wah Kwong Shipping Holdings has placed its latest US$42 million newbuilding under the Hong Kong shipping registry to reflect its confidence in the territory's flag and its future after the handover.

 Wah Kwong managing director George Chao Sze-kwong sealed the deal with Kim Jung-kook, director-president of Hyundai Heavy Industries, on Friday.

 The 172,000 deadweight tonne (dwt) bulk carrier is to be built by South Korea's Hyundai Corp & Hyundai Heavy Industries at the Hyundai Ulsan Shipyard.

 'The Hong Kong flag in the post-1997 era, after the change of sovereignty, will be good for shipowners,' Mr Chao said.

 He said that during recent visits to China, Ministry of Communications officials had given assurances of support to shipowners, based on Hong Kong's Basic Law.

 These officials also had distributed copies of the Basic Law to all Chinese embassies and consulates worldwide, asking them to provide assistance to Hong Kong-registered vessels, he said.

 Mr Kim said Hyundai had had a relationship with Wah Kwong since the delivery of the vessel Friendship Venture to the company more than 10 years ago.

 Mr Chao, who is chairman of the Hong Kong Shipowners Association, said the newbuilding would be on a two-year time charter to German steel giant Krupp.

 The vessel will be named Yangtze Ore. All ships on charter to the Krupp group bear the name of a river and end with the word ore.

 The Yangtze Ore, to be delivered in March 1999, will be 289 metres long and have a breadth of 45 metres and a depth of 24 metres. It will be powered by a B&W 6S70MC engine.

 Chung Ik-young, senior vice-president of the shipbuilding division of Hyundai Heavy Industries, said his shipyard had signed 14 building contracts, including the Yangtze Ore, this year and had 15 more confirmed ship orders to be signed soon.

 'We have orders in hand until the end of 1999, except for three to four more bulk carriers which can easily be filled up,' he said.

 More orders are being negotiated with European shipowners.

 Hyundai has 83 vessels on order - including the Yangtze Ore - which total four million gross tonnes.

 Of that figure, 55 vessels of 2.2 million gross tonnes will be completed this year, including five which were deferred from the end of last year.

 Shipbuilding activities contribute to 40 per cent of Hyundai's turnover, which this year is expected to be $6 billion.

 Mr Chung said Hong Kong shipowners had not been active in ordering vessels, but he expected them to be back in the market soon as demand for ships rose.

 The Samsung shipyard orders for vessels are similar to Hyundai's, while Daewoo and Halla have spare capacity for 1999.

 Japanese shipyards were also filling up and soon there would not be any acceptance for ship building for 1999, Mr Chung said.

 Comparing Hyundai shipyard's productivity with that of Japanese shipyards, Mr Chung said the Japanese were 1.6 times more productive than the Koreans.

 While Hyundai had recorded a 20 per cent productivity lift last year over 1995, there was plenty of room for improvement, he said.

 Hyundai had cut its 76,000 workforce at its peak in the 1970s to the present 12,000, a number which the company would like to maintain.



Newbuilding move reflects post-handover confidence in maritime sector