Shipbuilder seeks chance for overseas acquisition

China Shipbuilding Industry Corp, one of the country's two major shipbuilding conglomerates, has expressed an interest in acquiring shipbuilding companies in Europe to make itself a stronger technological competitor.

China Shipbuilding has held "advanced talks" with a European company in recent months, Sun Bo, senior executive of China Shipbuilding, said on Wednesday during a news conference in Beijing, declining to name the company.

"The talks did not bear any fruit but they did help us gain experience in negotiating with European companies," Sun said.

"We will continue pursuing the idea (of mergers and acquisitions of European shipbuilding companies)," he added.

The sluggish economic recovery seen in developed economies, which comes amid a market glutted with vessel supplies, has severely dented the demand coming from shipyards across the world.

The deepening eurozone crisis, meanwhile, has made it more difficult for shipowners to borrow from Europe's debt-ridden banking system, putting a further strain on European shipyards, analysts said.

Clarksons Plc, a leading provider of shipping services, estimated the volume of vessels ordered from the world shipbuilding industry dropped to 20.9 million deadweight tons during the first half of the year, down 59.5 percent from last year, one of the lowest figures seen in recent years.

In China, the industry has experienced widespread losses and numerous small shipyards are now teetering on the brink of bankruptcy.

According to data from the China Association of the National Shipbuilding Industry, orders for 2.58 million deadweight tons of vessels were withdrawn from the country's shipyards during the first half of this year, more than the amount for the previous year.

Official data also show the value of the country's vessel exports decreased by 2.1 percent to $16.7 billion from January to May. That was the first such decline seen after 11 years of rapid increases.

Analysts said the difficult market conditions could give big Chinese companies an opportunity to acquire European companies.

But Sun expressed concerns about the shipbuilding industry's prospects in the near future.

"The difficult market conditions are expected to continue for three to four years, and next year is likely to be the worst," he said.

To prevail over the gloomy market, China Shipping Industry announced plans last year to expand its business into manufacturing equipment for non-maritime industries such as the wind and solar energy industries.

During the first half of the year, the company made 42.8 percent of its income from its non-maritime business, surpassing for the first time what it made from its shipbuilding business, the company said.

zhousiyu@chinadaily.com.cn