nantong rongsheng shipyard quotation
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.
A purpose-built town near the shipyard’s main gate, with thousands of flats, supermarkets and restaurants, is largely deserted. Nine of every 10 shops are boarded up; the police station and hospital are locked.
“In this area we’re only really selling to workers from the shipyard. If they’re not here who do we sell to?” said one of the few remaining shopkeepers, surnamed Sui, playing a videogame at his work-wear store. “I know people with salaries held back and they can’t pay for things. I can’t continue if things stay the same.”
In the shadow of the shipyard gate, workers told Reuters the facility was still operating but morale was low, activity was slowing with the lack of new orders and some payments to workers had been delayed.
“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.
[Press Release]CHINARONGSHENGHEAVYINDUSTRIESAWARDEDTHESHIPBUILDINGAWARD BYSEATRADE* * * *CONSOLIDATESLEADINGPRESENCE INSHIPBUILDINGMARKETSTRIVES TOGROW INTO ALARGEHEAVYINDUSTRIESGROUP WITH ALEADINGGLOBALPRESENCE
(20 June 2011, Hong Kong) China Rongsheng Heavy Industries Group Holdings Limited (Rongsheng or the Group; stock code: 01101.HK), a large heavy industries group in China, has garnered The Shipbuilding Award in the Seatrade Asia Awards 2011. This year marks the second time the Group has been honored with this award and the third consecutive year it has received an award at the event. Mr. Chen Qiang, Chief Executive Officer and Executive Director of China Rongsheng Heavy Industries, was also honoured with the Seatrade Personality of the Year and received the award on behalf of the Group.
The presentation ceremony for the Seatrade Asia Awards 2011 organised by Seatrade was held at the Grand Hyatt Hong Kong on 17 June. The judging panel comprising authoritative professionals in the industry assessed entrants in all categories by six criteria. These criteria included their contribution to the development of sea commerce in the whole region and commitment to technology, innovation in operations or business, commitment to safety and quality, social and environmental responsibilities, business position and performance, as well as efforts in staff training and development. Apart from the above criteria, The Shipbuilding Award won by the Group also evaluates achievements in five other areas, including business profitability, reliability record, rate of loss time accidents, post-delivery service and design innovation. The Seatrade Asia Awards are the most authoritative prizes in Asias marine industry and are highly regarded in the global marine industry.Mr. Chen Qiang, Chief Executive Officer and Executive Director of China Rongsheng Heavy Industries, said, China Rongsheng Heavy Industries has been selected from among a number of shipbuilders to win this award once again. This success is not only a testament to the strong capability of the Group, but also a strong recognition by the Asian shipbuilding industry of the rapid growth in the Groups shipbuilding results and technology. China Rongsheng Heavy Industries was founded in 2005 and has rapidly grown into the second largest shipbuilder and the largest privately owned shipbuilder in China within six years. Currently, the Group owns the largest shipyard in China and is the global market leader in the manufacture of very large ore carrier (VLOCs) of 400,000 DWT. Winning this shipbuilding industry award again is solid proof of the Groups leading position in the industry.
In the past year, China Rongsheng Heavy Industries has captured market opportunities, actively expanding domestic and overseas markets while developing innovative technologies. As a result, it is the leader within China in securing new order volume for the second consecutive year, ranks first domestically and fifth globally in terms of order book, and has achieved a number of additional milestones. In May 2011, the worlds first-ever 3,000-meter deepwater pipelaying crane vessel built by the Group was christened Ocean Pec 201. Also this year, the worlds largest gantry crane with a lifting capacity of 1,600 tonnes was built by the Group, which significantly enhanced its core competitiveness. The Group has also signed new orders with shipowners in Greece and China, further consolidating its development foundation and generating new growth momentum.
Established in 2005, Rongsheng advanced to become a market leader in the Chinese shipbuilding industry within five years. According to Clarkson Research, Rongsheng 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. Rongsheng was also a global leader in manufacture of VLOCs of over 400,000 DWT. Headquartered in Hong Kong and Shanghai, Rongsheng has production facilities in Nantong of Jiangsu Province and Hefei of Anhui Province. Currently, Rongshengs 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 Groups products have been sold to 11 countries and regions including Turkey, Norway, Germany, Brazil, Singapore and China.For press enquiries:Strategic Financial Relations (China) LimitedMs. Anita CheungTel: (852) 2864 4827Email: anita.cheung@sprg.com.hk
[Press Release]China Rongsheng Heavy Industries Secures Shipbuilding Contracts from Three Ship Owners* * * *Enhances Functions of the Vessel Models and Captures the GreenTrend in the MarketStrong Capability to Secure New Orders with Immense GrowthPotential
(3 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, is pleased to announce that it has secured large orders from three renowned shipowners in Europe recently, including four
6600-TEU containerships and ten 205,000-tonne bulk carriers.Mr Chen Qiang, Chief Executive Officer and Executive Director of China Rongsheng Heavy Industries, said, We have secured the highest number of new orders in the country and the worlds fifth highest number of orders in hand since the end of 2010. Following the order[s] valued at USD400 million secured in the first quarter this year, we have secured several additional large orders which have notably increased the total amount of our orders in hand. These orders are sufficient to support our development in the coming few years, forming a solid foundation for our future growth. The signing of the contracts has increased the amount of new orders of the Group in the first half of the year to more than USD1.3 billion and further rationalised our order structure.
At the same time, China Rongsheng Heavy Industries has signed contracts with two other European ship owners to provide each with two 6600-TEU containerships [respectively]. Adopting a new generation design, the 6600TEU containerships reduce the speed from 25 kn to 21 kn as well as [ballast capacity], thus saving oil consumption and lowering transportation cost.
Despite the slowdown in the global shipbuilding industry in the first half of the year, China Rongsheng Heavy Industries has stood out among its peers in the volume of new orders it has secured. This year, the Group has signed contracts with Golden Union, a well-known international shipowner, for provision of two Panamax bulk carriers in January, and 2+2 of these carriers in May. Founded in 1977, Golden Union is well-known for operating bulk carriers. Currently, Golden Union has more than 20 ships in its fleet, thus making it the leader in the dry bulk carrier transportation [industry] in Greece.
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 Groups products have been sold to 11 countries and regions including Turkey, Norway, Germany, Brazil, Singapore and China.For press enquiries:Strategic Financial Relations (China) LimitedMs. Anita CheungTel: (852) 2864 4827Email: anita.cheung@sprg.com.hk
The workers from the Nantong shipyard owned by the troubled Rongsheng Heavy Industries have been on strike since Sunday after the company announced that they had to go on forced leave for a week.
The workers" strike comes after Rongsheng reported a loss of 49 million yuan (U.S.$8 million) in the first quarter of 2013, citing "the most difficult time yet" in the two recent quarters, shipping website SinoShip News said.
"The shipyard is in the middle of a transformation. We are confident and capable of solving issues in the process of the transformation," the official was quoted as saying.
"In recent days, some workers who failed to get an (employment) offer have organized disruptive activities to our production by surrounding the entrance of our Nantong production base," the Wall Street Journal newspaper quoted Lei as saying in the statement.
Lei Dong, secretary to Rongsheng"s president, told the paper the layoffs are not a sign of financial trouble at the shipbuilder, but were rather the result of "restructuring," saying more than half the employees who were laid off were subcontractors and the remainder full-time employees.
Troubled China Rongsheng Heavy Industries’ Nantong yard is the country’s third largest shipbuilding facility on a production basis and has been regarded as one of the more commercially progressive following its 2010 flotation in Hong Kong and its efforts in developing business with US investment houses like Goldman Sachs.
(Bloomberg) — China Rongsheng Heavy Industries Group Holdings Ltd., which hasn’t announced any 2012 ship orders, may find winning deals even harder as a company owned by its billionaire chairman faces an insider-trading probe.
Rongsheng, based in Shanghai, has tumbled 87 percent since a November 2010 initial public offering because of concerns about delivery delays and a global slump in ship orders caused by a glut of vessels. The shipbuilder, which operates facilities in Jiangsu and Anhui provinces, also said yesterday that first- half profit probably dropped “significantly” because of falling prices and slowing orders.
The demand slump has pushed new-ship prices to an eight- year low, according to shipbroker Clarkson Plc. Chinese shipyard orders plunged 49 percent in the first half.
The probe won’t affect day-to-day operations run by Chief Executive Officer Chen Qiang, as Chairman Zhang only has a non- executive role, Rongsheng said in a statement yesterday. Zhang wasn’t available for comment yesterday, according to Doris Chung, public relations manager at Glorious Property Holdings Ltd., a developer he controls.
Chen isn’t aware of Zhang’s personal business dealings and he has no plans to leave Rongsheng, he said yesterday by text message in reply to Bloomberg News questions. The CEO may help reassure potential customers as he is well-known among shipowners, said Lawrence Li, an analyst at UOB Kay Hian Holdings Ltd.
Zhang owns 46 percent of Rongsheng and 64 percent of Glorious Property, according to data compiled by Bloomberg. The developer dropped 1.7 percent to close at HK$1.16 in Hong Kong today after falling 11 percent yesterday. Zhang’s listed holdings are worth about $1.2 billion, according to data compiled by Bloomberg.
Zhang, who holds a Master’s of Business Administration degree from Asia Macau International Open University, started in building materials and construction subcontracting before getting into real estate. Construction of his first project, in Shanghai, began in 1996, according to Glorious Property’s IPO prospectus. He got into shipbuilding after discussing the idea with Chen at a Shanghai Young Entrepreneurs’ Association event in 2001, according to Rongsheng’s sale document. He formed the company that grew into Rongsheng three years later.
“People in his hometown think Zhang is a legend as he expanded two companies in different sectors so quickly,” said Ji Fenghua, chairman of Nantong Mingde Group, a shipyard located next to Rongsheng’s facility in Nantong city, Jiangsu province. The billionaire maintains a low profile, said Ji, who has never seen him at meetings organized by the local government.
Rongsheng raised HK$14 billion in its 2010 IPO, selling shares at HK$8 each. The company’s market value has fallen by about $6.1 billion to $1 billion, based on data compiled by Bloomberg.
Rongsheng, which also makes engines and excavators, had outstanding orders for 98 ships as of June 2012, according to Clarkson. It employed 7,046 people at the end of last year, according to its annual report. The shipbuilder has built a pipe-laying vessel for Cnooc and it has a strategic cooperation agreement with the energy company.
As there were more difficulties in delivering completed ships and obtaining financing, number of holding orders kept decreasing and profits declined sharply. According to incomplete statistics, 60% of shipbuilding enterprises took zero new orders in China in 2016. Large shipbuilding enterprises including Jiangsu Rongsheng, Shuntian Shipbuilding, Nantong Mingde, Zhejiang Zhenghe, and Zhejiang Shipbuilding were dramatically influenced and even encountered bankruptcy.
Oman Shipping Company celebrated the launch, delivery and naming of the biggest two carriers in the world at the port of Jiangsu Rongsheng Heavy Industries Company in Nantong in China.
He pointed out that the two vessels that were specially built for OSC will be used in transporting iron ore from Brazil to the Oman Iron Ore Palletising Plant Company at Sohar Port. These are two out of four vessels that will be built by Rongsheng Heavy Industries Company. He pointed out that the other two vessels, which are now being finalised, will be delivered in September and that when they join service, the number of multi-purpose vessels operated by Oman Shipping Company will be raised to 37.
The celebration was attended by the Governor of Nantong city of China, Salim bin Mohammed al Nu‘aimi, Under-Secretary of Transport and Communications Ministry, Abdullah bin Saleh al Sa’adi, Sultanate’s Ambassador to China, besides a number of officials from the Finance Ministry, OSC, Oman Vale International and China. On the other hand, Dr Al Futaisi met with the Governor of Nantong and discussed with him issues related to enhancing joint co-operation between the two sides.
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