Merger, China Encouraging to Be the Largest Shipbuilding Company in Asia

INDUSTRY.co.id - Jakarta - China plans to merge its two largest shipbuilders to form one giant industrial manufacturer that will be the largest shipbuilder in Asia.

As quoted from Bloomberg, China's State Council has given preliminary approval to consolidate two state-controlled companies namely China State Shipbuilding (CSSC) and China Shipbuilding Industry (CSIC). The product portfolio of both companies produces from aircraft carriers to navy forces to ships carrying containers, oil and gas.

The combined revenue of the two industry giants is reported to reach 508 billion Yuan (USD 81 billion). Both companies have subsidiaries that trade on the stock exchanges in Shanghai and Hong Kong.

As a result of the merger, China can compete with three of the world's largest shipbuilders, South Korea's Hyundai Heavy Industries, Daewoo Shipbuilding & Marine Engineering, and Samsung Heavy Industries. Both Chinese shipbuilding companies were established nearly 20 years ago to improve competitive advantage and performance among state defense companies.

CSSC, CSIC, and their subsidiaries have 10.4 million gross tons of compensation in order to backlog as of February, according to the latest data from Clarkson, a London-based shipping service provider. The figure is reported to be equal to about 13 percent of the market. That compares with 7.72 million tons in South Korea, Hyundai Heavy