Thu, Aug 05, 2004 - Page 10 News List

US, UK companies vie for stake in China Shipbuilding

DPA , TAIPEI

Dozens of foreign and Taiwanese companies, including Lockheed Martin and Detyens Shipyards of the US and BAE of the UK, are vying to buy a stake in China Shipbuilding Corp (CSC, 中船), which wants to be privatized before 2009, a company official said yesterday.

Lockheed Martin, Detyens Shipyards and US banks are bidding through an agent called MPH, Chen Li-lin, chief of CSC's Planning Department, told reporters by phone.

"BAE has also shown interest in buying our stake. Domestic potential bidders include the China Steel Corp (中鋼), Evergreen Marine Corp (長榮), Yang Ming Marine Transport Corp (陽明) and Wan Hai Lines Ltd (萬海)," he said.

CSC wants to invite international tenders for the stake-release in the first quarter next year.

The state-run CSC is the country's largest shipyard. It has built container ships and bulk carriers for domestic and foreign clients and has built frigates with US design and weapons systems for the navy.

But CSC ran into the red in the 1990s due to mismanagement and too many workers.

In 2001, it laid off 2,400 workers and began its privatization process.

The government holds a 98 percent stake in the company. CPC wants to cut the government stake to between 34 percent and 49 percent of its total stake.

Local and foreign companies have shown a strong interest in buying CSC shares because the company has begun to make profits due to the recovery of the global shipbuilding market.

Last year its net profit hit NT$230 million (US$15.5 million) and is expected to reach NT$700 million.

"We have enough orders to keep us busy until the end of 2007. So we are optimistic about our future," Chen said.

While continuing to build container ships and bulk carriers, CSC hopes to also build car carriers, crude oil tankers and other products carriers, as well as small naval ships.

"We hope to have the capability to maintenance submarines," Chen said.

CSC has 2,700 workers with the main shipyard in Kaohsiung and a smaller one in Keelung.

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