The privately-owned Chinese shipbuilder has been facing cashflow issues since last year when some of its subcontracted yard workers protested at Dayang Shipyard in September 2015 over unpaid wages.
The problem at Sinopacific is not an isolated case as China’s shipbuilding industry has been struggling with a severe downturn marked by widespread bankruptcy and consolidation, and even state-backed yards are not spared.
The local media recently reported that Sinopacific’s ship design department in Shanghai will be closed down and some 50 staff would be affected. The news report said it remains unclear how the company would compensate the staff if they are asked to leave.
At the group’s Dayang Shipyard in Wuxi near Shanghai, it was also reported that a restructuring of the yard will see some 600 workers face the axe, shrinking the workforce to around 1,000.
Dayang Shipyard constructs mainly dry bulk carriers while another of Sinopacific’s facility, Zhejiang Shipyard, builds mainly OSVs. At present, both the bulk carrier and OSV markets are face challenges of low rates and muted demand.
Sinopacific could not be reached by Seatrade Maritime News for comments.
The tight cashflow problems at Sinopacific have already led to the yard selling its 29.95% stake in subsidiary Sinopacific Offshore & Engineering (SOE) to CIMC Enric Holdings.
In July 2015, Simon Liang, founder of Sinopacific, stepped down as chairman and ceo due to a reshuffling at the top management. Jiang Qiang, who took over as ceo, revealed earlier that the company was in need of financial support in order to keep yard operations going.
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