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Zhoushan Jinhaiwan Shipyard backs shipbuilding ban

CHINA’s Zhoushan Jinhaiwan Shipyard and other large shipbuilders in the Zhoushan area near Shanghai have welcomed moves to suspend production of general cargo vessels for up to three years. The proposal, made by the Zhoushan government during a meeting of local shipbuilding representatives, was intended to pave the way for a restructuring of the local shipbuilding industry. Government officials want to encourage development of between three and five leading shipbuilders in the region through mergers and acquisitions involving smaller rival yards. But officials did not give a timetable for the implementation of the proposal or specify the size of vessel covered by ban. A source at Zhoushan Jinhaiwan Shipyard applauded the proposal because it would consolidate the industry. As one of the leading shipbuilder in the region, the insider said Jinhaiwan would benefit from the plan because it would eliminate small and less-competitive players. Zhoushan Jinhaiwan Shipyard, which is affiliated to Shanghai Zhouji (Group), covers about 4m sq m and has orders for 176,000 dwt capesize bulk carriers. Zhoushan Xinya Shipyard assistant manager Li Zhuo said there were many privately owned shipbuilding companies in Zhoushan but the current poor state of the market caused a serious problem of overcapacity. Mr Li said: “I’ve heard about the proposal, but I don’t know when it will take effect. I believe consolidation will be underway for the shipbuilding business in Zhoushan over the coming three years.” Shipbuilders in Zhoushan, an archipelago of islands near Hangzhou Bay, posted a 42.2% year-on-year rise in revenue to Yuan8bn ($117.6m) for the first four months this year.

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