rongsheng heavy industries supplier

Last October, the company entered into an agreementto sell 98.5% equity interest of Rongsheng Heavy Industries, the entire interest in Rongsheng Engineering Machinery, Rongsheng Power Machinery and Rongsheng Marine Engineering Petroleum Services, to Unique Orient, an investment holding company owned by Wang Mingqing, a creditor of Huarong Energy, for a nominal price of HK$1.

Once the largest private shipyard in China, Rongsheng ceased shipbuilding operations in 2014 after it was hit by a major financial crisis and the shipyard rebranded into Huarong Energy in 2015.

RUGAO, China/SINGAPORE (Reuters) - Deserted flats and boarded-up shops in the Yangtze river town of Changqingcun serve as a blunt reminder of the area"s reliance on China Rongsheng Heavy Industries Group, the country"s biggest private shipbuilder.A view of the Rongsheng Heavy Industries shipyard is seen in Nantong, Jiangsu province December 4, 2013. REUTERS/Aly Song

The shipbuilder this week predicted a substantial annual loss, just months after appealing to the government for financial help as it reeled from industry overcapacity and shrinking orders. Rongsheng lost an annual record 572.6 million yuan ($92 million) last year, and lost 1.3 billion yuan in the first half of this year.

While Beijing seems intent to promote a shift away from an investment-heavy model, with companies reliant on government cash injections, some analysts say Rongsheng is too big for China to let fail.

Local media reported in July that Rongsheng had laid off as many as 8,000 workers as demand slowed. Three years ago, the company had about 20,000 staff and contract employees. This week, the shipbuilder said an unspecified number of workers had been made redundant this year.

“Without new orders it’s hard to see how operations can continue,” said one worker wearing oil-spattered overalls and a Rongsheng hardhat, adding he was still waiting to be paid for September. He didn’t want to give his name as he feared he could lose his job.

“Morale in the office is quite low, since we don’t know what is the plan,” said a Rongsheng executive, who declined to be named as he is not authorized to speak to the media. “We have been getting orders but can’t seem to get construction loans from banks to build these projects.”

While Rongsheng has won just two orders this year, state-backed rival Shanghai Waigaoqiao Shipbuildinghas secured 50, according to shipbroker data. Singapore-listed Yangzijiang Shipbuildinghas won more than $1 billion in new orders and is moving into offshore jack-up rig construction, noted Jon Windham, head industrials analyst at Barclays in Hong Kong.

Frontline, a shipping company controlled by Norwegian business tycoon John Fredriksen, ordered two oil tankers from Rongsheng in 2010 for delivery earlier this year. It now expects to receive both of them in 2014, Frontline CEO Jens Martin Jensen told Reuters.

Greek shipowner DryShips Inchas also questioned whether other large tankers on order will be delivered. DryShips said Rongsheng is building 43 percent of the Suezmax vessels - tankers up to 200,000 deadweight tons - in the current global order book. That"s equivalent to 23 ships, according to Rongsheng data.

Speaking at a quarterly results briefing last month, DryShips Chief Financial Officer Ziad Nakhleh said Rongsheng was “a yard that, as we stated before, is facing difficulties and, as such, we believe there is a high probability they will not be delivered.” DryShips has four dry cargo vessels on order at the Chinese firm.

Rongsheng declined to comment on the Dryships order, citing client confidentiality. “For other orders on hand, our delivery plan is still ongoing,” a spokesman said.

At least two law firms in Shanghai and Singapore are acting for shipowners seeking compensation from Rongsheng for late or cancelled orders. “I’m now dealing with several cases against Rongsheng,” said Lawrence Chen, senior partner at law firm Wintell & Co in Shanghai.

Billionaire Zhang Zhirong, who founded Rongsheng in 2005 and is the shipyard"s biggest shareholder, last month announced plans to privatize Hong Kong-listed Glorious Property Holdingsin a HK$4.57 billion ($589.45 million) deal - a move analysts said could raise money to plug Rongsheng"s debts.

Meanwhile, Rongsheng’s shipyard woes have already pushed many people away from nearby centers, and others said they would have to go if things don’t pick up. Some said they hoped the local government might step in with financial support.

The Rugao government did not respond to requests for comment on whether it would lend financial or other support to Rongsheng. Annual reports show Rongsheng has received state subsidies in the past three years.

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HONG KONG, June 28, 2011 - (ACN Newswire) -China Rongsheng Heavy Industries Group Holdings Limited ("China Rongsheng Heavy Industries" or the "Group"; SEHK: 1101), announced that Rongsheng Machinery Limitied ("Rongsheng Machinery")(previously Anhui Rongan Heavy Industries Machinery Company Limited), its new plant in Hefei, has commenced production today and the Group"s first-ever excavator has also been produced on the same day.

Officiating at the plant"s opening ceremony were leaders of the Hefei Municipal Government as well as top management of the Group including Mr. Deng Hui, Executive Director of China Rongsheng Heavy Industries and Mr. Yu Zheng, Chairman and President of Rongsheng Machinery Limited. Suppliers and agents of Rongsheng Machinery also attended the ceremony that day. Rongsheng Machinery also formally signed contracts with suppliers and agents at that time and completed the sale of its first dynamic compactor.

Mr. Chen Qiang, Chief Executive Officer and Executive Director of Rongsheng, said, "With the new Hefei plant, the Group is boosting its engineering machinery business, further implementing diversification of its four major business segments while enlarging its share of RMB-denominated business. Through its diversification strategy, China Rongsheng Heavy Industries has kept in step with the industrial planning policy of Anhui Province to develop Hefei into a "City of Engineering Machinery". Also, guided by its own overall strategy of "co-developing the marine and offshore businesses", the Group has entered into the engineering machinery market by acquiring a majority equity interest in Hefei Zhenyu Enginnering Machinery Company Limited ("Zhenyu Engineering Machinery") in March 2010. The Group has also established and registered Rongsheng Machinery in the same month. It has actively expanded its production base with an aim to increase production capacity."

Rongsheng Machinery"s new plant is located in Hefei Economic and Technology Development Zone. The excavator project covers an area of approximately 850 acres. The construction began in November 2010 with production commencing on 28 June 2011. The project was completed in just over than seven months, much shorter than the industry average of 18 months for constructing a general assembly workshop. It indeed has set a standard for engineering construction across the industry.

Rongsheng Machinery"s small excavator production line has commenced operation on 18 May this year, and its engineering machinery business is entering a stage of comprehensive development. The new production facility will have a production capacity of 30,000 hydraulic excavators. Every stage of the excavator production base project, from proposal, and submission for approval to preparation for construction, has enjoyed the close attention and strong support from all levels of leaders in the province and the city as well as the economic development zone. Anhui Provincial Government has designated the project as a major construction project in its "861 Action Plan". The Hefei Municipal Government has also included it as a major implementation project under the Twelfth Five-Year Plan.

Rongsheng Machinery currently produces 16 varieties of hydraulic excavators and two varieties of hydraulic crawler cranes. While constructing a new production base, Rongsheng Machinery has also shifted from direct sales outside province to distribution, increasing the number of its distributors to 10. Rongsheng Machinery has also enhanced its cooperation with financial institutions. In addition, the acquisition of Quanchai Group in April this year has enabled it to secure a stable supply of engines for the engineering machinery segment.

Development of the engineering machinery business will also facilitate China Rongsheng Heavy Industries to increase its RMB-denominated business as an effective means to combat against foreign exchange risk. Mr. Chen Qiang said, "Given the continued appreciation of the RMB compared to the US dollar, the Group will actively expand the shipbuilding and engineering machinery businesses in the PRC. The Group intends to establish a RMB settlement business, with the comprehensive development of the engineering machinery business, the Group is expected to have a more diversified income stream and achieve a more balanced mix of RMB- and US dollar-denominated income."

[Press Release]CHINARONGSHENGHEAVYINDUSTRIES’ 400,000 DWT VLOCNAMED AND LAUNCHED* * * *LOWERSCOST FORVALE ANDFORGESLONG-TERMCOOPERATIONFIRSTVLOCS TOBEDELIVERED SOON

(10 July 2011, Hong Kong) – China Rongsheng Heavy Industries Group Holdings Limited (“China Rongsheng Heavy Industries” or the “Group”; stock code: 01101.HK), a large heavy industries group in China, and Vale S.A. (“Vale”), the largest global iron ore supplier from Brazil, held a naming and launching ceremony on 9 July for the first-ever 400,000 DWT Very Large Ore Carrier (VLOC) built in China. This new VLOC, named “VALE CHINA”, is the first VLOC of a few to be delivered in the coming two years. The new vessel can significantly lower overall delivery costs of iron ore for Vale. The attendance of Vale’s new Chief Executive Officer underscored the long-term cooperation between a major shipbuilder and ship owner.

Mr. Chen Qiang, Chief Executive Officer of China Rongsheng Heavy Industries, and Mr. Murilo Ferreira, the new Chief Executive Officer of Vale, attended the ceremony. The Brazilian ambassadress was the godmother in the naming ceremony. Mr. Chen Qiang said, “The early christening of VLOC as “VALE CHINA” reflected the dedication and importance of the cooperation of both parties, as well as Vale’s strong interest in collaborating with Chinese companies.”

As the largest private shipbuilder in China, China Rongsheng Heavy Industries is one of the few shipbuilders in the world with the ability to build VLOCs of 400,000 DWT or larger. Within its shipbuilding segment, VLOCs account for the highest proportion of the contracts on hand in terms of contract value, thus the naming and launching of “VALE CHINA” has special significance for the Group’s future development.

The 400,000 DWT VLOC launched is currently the world’s largest dry bulk carriers. It is a high-tech vessel self-developed by the Group, representing the world’s most advanced technology in very large bulk carriers. The vessel’s main engine was self-built by China Rongsheng Heavy Industries, which is a low-speed diesel engine with the maximum power manufactured by Chinese enterprise independently so far.

As the largest iron ore supplier and exporter in the world, Vale is not only one of China"s major iron ore suppliers, but also the largest customer of China Rongsheng Heavy Industries. This visit fully affirmed the capability of China Rongsheng Heavy Industries in constructing very large vessel. Vale is seeking to enhance production capacity to meet the increasing demand from Asia. After the delivery of the 400,000

10 July 2011 / Page 3Photo 1: Mr. Chen Qiang, Chief Executive Officer of China Rongsheng HeavyIndustries, giving a speech in the naming and launching ceremonyPhoto 2: The naming and launching ceremony ofChina’s first-ever 400,000 DWT VLOC “VALE CHINA”

Established in 2005, China Rongsheng Heavy Industries advanced to become a market leader in the Chinese shipbuilding industry within five years. According to Clarkson Research, China Rongsheng Heavy Industries was the second largest shipbuilder and the largest privately-owned shipbuilder in the PRC in terms of total order book measured by DWT as of end of 2010, and had the largest shipyard in the PRC. China Rongsheng Heavy Industries was also a global leader in manufacture of VLOCs of over 400,000 DWT. Headquartered in Hong Kong and Shanghai, China Rongsheng Heavy Industries has production facilities in Nantong of Jiangsu Province and Hefei of Anhui Province. Currently, China Rongsheng Heavy Industries’ business spans four segments: shipbuilding, offshore engineering, marine engine building and engineering machinery. Rongsheng products include bulk carriers, crude oil tankers, containerships, offshore engineering products, low-speed marine diesel engines and small to mid-size excavators for construction and mining uses. It has established strategic cooperations with renowned international classification societies including DNV, ABS, LR, GL and CCS, and has built a customer base including enterprises such as CNOOC, Vale, Geden Line, Cardiff Marine Inc., MSFL and Frontline Ltd. The Group’s products have been sold to 11 countries and regions including Turkey, Norway, Germany, Brazil, Singapore and China.For press enquiries:China Rongsheng Heavy Industries Group Holdings Limited

One of China"s biggest yards is investigating a number of ways to get out of the company"s economic troubles of a billion dollar deficit. Rongsheng Heavy Industries now has plans to sell the company"s shipping yard business and focus on the energy business instead, according to several media sources.