One of China’s two shipbuilding titans will swallow a money-losing ship repair and conversion business as part of the government’s plans to scrape barnacles from the hull of the oversized and inefficient industry and get it shipshape.
China State Shipbuilding Corp. (CSSC) will use its Guangzhou Shipyard International Co. Ltd. (GSI) unit to acquire Guangzhou Wenchong Shipyard Co. Ltd. for 499 million yuan ($72 million), a filing with the Shanghai Stock Exchange announced on Friday.
CSSC mainly handles shipbuilding activities in China’s south and east, with subsidiary GSI largely handling construction of very large and super large-class oil and ore carriers from a base in the southern city of Guangzhou. GSI is located in the same dock area as Guangzhou Wenchong, which specializes in ship modification and repairs. The tie-up will allow both to cut costs and boost efficiency by sharing transport and docking facilities, the filing said.