China’s Leading Shipyards Merge to Form World’s Largest Builder with $17 Billion in Annual Sales

The two top shipyards in China have plans to combine, potentially forming the largest shipbuilding company in the world. By pooling their resources, they aim to establish a corporation that will generate around US$17 billion in yearly revenue.

China's two largest shipbuilding companies, both of whom have the People's Liberation Army Navy as their clientele, are preparing to combine their resources. This move complies with government directives to enhance their operational efficiency, fortify their management structures, and expedite the growth of their industry.

The two mentioned shipyards are part of China State Shipbuilding Corp, the biggest shipbuilding group worldwide, holding a third of the global market in terms of shipbuilding orders.

The forthcoming union will establish a shipyard boasting yearly sales of 122 billion yuan (US$17.1 billion/HK$133.1 billion), nearly twice as large as South Korea's Hyundai Heavy Industries. The combined entity would have the ability to construct a wide range of ships, from military vessels such as aircraft carriers to commercial vessels like container carriers, massive oil tankers, and even passenger ships.

"An amalgamation will enhance their business organization by improving their capacity to accept requests for more sophisticated ships," said Man Zaipeng, a Sinolink Securities analyst, in a message to customers. He also mentioned that China's growing portion of the international shipbuilding industry "promises positive revenue for the newly formed body."