Singapore-listed Chinese shipbuilding group AVIC International Maritime Holdings and its subsidiary Deltamarin are venturing into engineering, procurement and construction (EPC).
Their joint venture, called Deltamarin Floating Construction, has three core business areas -environmental products including scrubbers, floating power barges and modular offshore solutions.
Speaking at a press conference in Singapore on 28 April, AVIC International executive chairman Diao Weicheng said, “We want to be a leading shipbuilding and design company, especially in environment-friendly vessels. We’ve designed a series of container ships and we’ve also started designing ro-ro passenger ships based on Deltamarin’s 20 years of experience.”
In 2013, AVIC acquired Deltamarin, a Finnish ship design company, to strengthen its shipbuilding business.
AVIC International CEO Sun Yan said, “EPC is a new trend and we hope that starting this new business will help ship owners in cost management and quality control in project management. We believe this is a service needed by the market, riding on Deltamarin’s overall capabilities in specialist vessels and offshore structure design.”
Aside from discussing the EPC venture, Diao also touched on the Chinese shipbuilding industry, which is currently going through a process of consolidation as a result of excess capacity and the sluggish dry bulk market.
From over 3,000 shipyards in 2010, there are just 1,600 of these left in China. By end-2015, it is estimated that just half of these will survive.
AVIC’s own yards in Weihai and Dingheng have yet to turn a profit.
Because of this, AVIC says that it wants to focus on helping the yards to make money, rather than acquisitions.
Diao said, “In future, when the yards start making money and come up to a standard that meets the Singapore Exchange’s requirements, our parent company will transfer the yards into the listed entity.”