China Shipbuilding sees higher profits

The state-run China Shipbuilding Corp (中船) announced yesterday its goal this year of increasing annual operating income to NT$24.4 billion (US$744 million) from last year's NT$19.8 billion and the total tonnage of ships built from 120,000 to 180,000.

China Shipbuilding posted sales of NT$19.8 billion last year, with a NT$1.492 billion pretax surplus -- NT$1.153 billion higher than the target set by the government, the Kaohsiung-based firm said.

The company also said it should be able to fulfill the government requirement of making a pretax surplus of not less than NT$1.203 billion this year.

China Shipbuilding chairman Frank Lu (盧峰海) thanked company staff during an internal meeting yesterday, saying that in the last year the company had managed to improve and speed up manufacturing processes, increase efficiency and bring down costs despite price hikes in raw materials and fierce international competition.

Lu said continuous growth in demand for ships was expected this year, although a vast expansion in shipbuilding capacities of developing countries had raised concerns about overproduction.

In the face of the global challenge this year, China Shipbuilding is making efforts to develop competitive ship designs, to expand its market using combined advantages in design and technology and to reduce overall costs by further shortening construction periods by one to two months, Lu said.