China CSSC Holdings Limited (600150), China's biggest shipbuilder, has started constructing a large-scale manufacturing base for marine engineering equipment. This manufacturing base is invested by Waigaoqiao Shipbuilding Co. Ltd under CSSC. With a planned area of 1.03 million sq.m, facilities such as a joint workshop, a floating structure workshop, a module structure workshop and a professional dock will be constructed. After completion, the manufacturing base will be able to manufacture 2 semi-submersible drilling vessels, 2 jack-up drilling platforms, 50 marine superstructures, and approximately 1000 special modules. 255,000 tons of steel will be consumed annually on this manufacturing base.
Personnel from CSSC told reporters there's strong demand for marine engineering equipment. Such equipment are of high added value, and are by and large unaffected by the cyclical fluctuation of the ship building market. Under oil supply strain, the rent to utilization ratio of marine exploration platforms had climbed, making marine engineering equipment a new source of profit for the shipbuilding industry. Shanghai Municipal Government also attached great importance to this manufacturing base, with the ambition to build Shanghai into an R&D and manufacturing center for offshore oil and gas exploration equipment.
In addition, it has been reported that construction of a deep sea drilling platform has also started at Waigaoqiao Shipbuilding Co. Ltd. This 3000-metre semi-submersible drilling platform is the first one designed and constructed in China.

Source: China Securities Journal

Date: 7 May 2008

CN01/SW/KM/WH