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Failure to secure refund guarantees sees new Chinese yard quit building

Failure to secure refund guarantees sees new Chinese yard quit building

Shanghai: A new private Chinese shipbuilder has confirmed to Seatrade Asia Online it has exited the newbuild sector having failed to secure refund guarantees. Jiangsu Xiangshui Suncia Shipbuilding Industry general manager Sun Jianmin told this website, 'We do not build ships anymore.' The yard which was founded last year aimed to build private yachts as well as handysize and handymaxes and had German KG Konig and Cie on its books for four 57,000 dwt bulkers. Construction of the drydock, already a contentious issue among Jiangsu locals who had been forcibly removed from their homes, has now stopped. Ambitious plans to expand into containerships and chemical tankers now look over.
This is the second yard Sunica Group has pulled away from. Back in 2004 it invested in Liaoning province in the north of China. After three years at Liaoning Hongguan Shipyard it had managed to produce just two 16,800 dwt tankers and it moved its investment south to Jiangsu.  
This is the first report of a failed Chinese shipyard amid the global financial fallout. With an incredible 200 odd shipyards either just started or still under construction in China many are likely to go to the wall. Speaking at the Marine Money Asia conference last week in Singapore Mark Pankhurst from Deutsche Bank said during a lively, controversial roundtable discussion: 'The reality is there is a lot of owners who will walk away from their orders. Shipbuilders will go Mused Harold Malone from Jeffries in New York at the same event, "What will the national governments of shipbuilders do, especially China, to protect these industries?" [24/10/08]


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