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Yangzijiang bags seven newbuilding orders worth $360m in Q1

Yangzijiang Shipbuilding has secured new orders for seven vessels with a total contract value of $360m during the first quarter of 2020, as the shipbuilding starts catching up on lost production time due to the coronavirus (COVID-19) outbreak.

The new orders include three 82,000-dwt bulk carriers, two 40,000-dwt bulkers, and two 14,000-teu containerships. There was a termination of one shipbuilding order of a 157,000-dwt oil tanker, for which Yangzijiang has received $12m from the original buyer, and the tanker has been resold to a new buyer earlier in April.

As at 31 March 2020, Yangzijiang sat on an orderbook of $2.9bn for 69 vessels, excluding the 157,000-dwt tanker. The orders are expected to keep the yards at a healthy utilisation rate up to late-2021 and provide a stable revenue stream for at least the next 1.5 years.

“After a short disruption due to an extended lockdown period as required by the Chinese government after the Chinese New Year, we took several proactive measures to resume the production,” said Ren Letian, ceo at Yangzijiang.

“By the end of March, almost 100% of the workers have resumed working. We also started longer shifts and hired additional workers whenever needed since March to make up for the lost time. Now, the construction of vessels is in good progress and the delivery schedule is within control.

“We also used cloud-based technologies to facilitate the exchange of paperwork for vessel deliveries, whereby solving the problem of travel restrictions. Twelve vessels were delivered in Q1 2020, accounting for about 25% of our delivery target for 2020,” he said.

Ren added that whilst the weak sentiment globally and lack of visibility make it very challenging for shipowners to plan their new orders in the near term, they will still need to upgrade and replenish their fleet, with a focus on energy efficiency and environmental protection.

“Yangzijiang has the financial strength and core capability to stand strong against major headwinds, and our long term strategy for sustainable growth will remain intact, as we strengthen our foothold in the global market for large-sized containerships and dry bulkers, and mid-sized clean energy vessels,” Ren said.