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China to have 20-30 active yards after consolidation

China to have 20-30 active yards after consolidation
At a time when many are expecting China to enter the cruise shipbuilding scene an interesting observation by Ren Yuanlin, executive chairman of privately-owned Yangzijiang Shipbuilding who says China will be left with only 20 to 30 shipbuilding companies with active operations when the severe, ongoing consolidation period of the industry is complete over the next few years.

There are now a little more than 100 shipyards with active day-to-day operations in China, a figure that has dwindled from about 300 during the second half of last year, and dramatically down from more than 3,000 big and small yards across China at the start of 2010.

‘A lot more shipyards are expected to go out of business over the next two to three years as consolidation continues, leaving growth for only the stronger yards and the smaller, weaker yards will not have a chance to expand,’ Ren said. He pointed out that even state-owned yards will not be spared from the consolidation.

Guangzhou Shipyard International, for example, has  acquired 100% equity interest in its sister yards Longxue Shipbuilding and Huangpu Wenchong Shipbuilding Company as part of a restructuring process.

The yards are subsidiaries of state-owned China State Shipbuilding Corporation (CSSC).

'By the time when the consolidation phase is complete, there will be only 20 to 30 yards left. This is in line with what the Chinese government would like to see, but market forces will eventually determine this outcome,’ Ren said.