Guangzhou Shipyard Relocation Plan Moving Forward

One of China’s leading shipbuilders, Guangzhou Shipyard International Company Limited is gathering momentum amid the industry warming-up.

Along with its much-noted move to acquire CSSC Guangzhou Longxue Shipbuilding Co., Ltd. (GLS), together with its large modern facilities, GSI reports substantial order increases to put the new facilities into full swing with a delivery schedule with 70 new vessels to be filled until the end of 2016.

Meanwhile, GSI is expected to receive government compensation as much as RMB 10 billion (approx $1.6 billion) in exchange for its downtown land asset as the city plans for industrial upgrading and property development.

GSI’s order receiving capacity may be impacted as currently the capacity of its manufacturing base in Guangzhou is unable to meet demand. After acquiring GLS, GSI not only could utilize GLS’s advanced equipment to improve production efficiency and solve capacity bottleneck as well as to obtain new manufacturing base for its relocation. Meanwhile, it’s expected that additional costs from relocation will be low as GSI’s production staff mainly consist of contract employees.

GLS is located at Nansha District in Guangzhou, the development planning of which is approved by the State Council of the PRC to build the sixth state-level new district. Development Planning of Guangzhou Nansha District intends to upgrade the development and construction of Nansha New District to national strategic level and will enjoy state-level preferential policies and get innovation & reform support in respect of fiscal taxation policy, land administration, financial innovation, industrial development, etc.

In virtue of GLS’s superior geographical location, GSI is expected to realize industrial upgrading and rapid growth as benefited from the super investment.

Due to limited resources in Guangzhou and surrounding areas, and for the reason that construction of new shipyards is not permitted under current national policy for purpose of capacity control, GSI has not a relocation plan yet. However, with the implementation of GSI’s acquisition of GLS and the progress in Bai’etan Program, GSI’s relocation plan is ready to move ahead.

[mappress]
Source: acn, November 15, 2013