China Navigation, the shipping company privately owned by John Swire & Sons, has signed a US$300 million deal for eight 31,000 deadweight tonne multipurpose ships with Zhejiang Ouhua Shipbuilding.
The order includes options for up to eight similar vessels costing a further US$300 million.
The latest pact comes about 2 1/2 years after the company signed a US$360 million shipbuilding order with another mainland yard, Nantong Mingde Heavy Industry, for six 40,000 deadweight tonne ships. But that order collapsed at the end of 2008 after the shipbuilder was unable to obtain indemnities known as refund guarantees partly as a result of the global financial crisis.
China Navigation, which moved its headquarters from Hong Kong to Singapore at the end of last year, will help design the new fuel-efficient ships that will be delivered between January and August 2013.
Richard Kendall, China Navigation managing director, said the new ships would be financed internally within Swire. He said Nantong Mingde was considered for the latest building order along with 'several other private and state yards ... in China and South Korea'. But the shipbuilder was 'not competitive on price or delivery'.
Instead, China Navigation opted for Zhejiang Ouhua, which is located on Zhoushan Island, about 144km from Shanghai.
Kendall said the shipowner settled on 31,000 deadweight tonne ships because they were a 'better size for our intraPacific trades'. The ships will have more cargo carrying capacity than the 25,500 deadweight tonne vessels that are currently deployed on the firm's Pacific trades. These include services linking Singapore, Papua New Guinea and Australasia.