Debt-ridden China Shipbuilding Corp (
"Since we began a restructuring program on Dec. 31, we have reduced our staff to 2,280 from 5,025 people and cut the salary of remaining employees by 35 percent," China Shipbuilding President Fan Kuang-nan (
Fan said the company has worked hard to stem losses and turn itself around.
"As of August, we recorded revenue of NT$11.23 billion with a pretax profit of NT$165 million," he said.
"Looking ahead, we are targeting more than NT$200 million in pretax profit this year, and may earn about NT$70 million in 2003 as we expect to see fewer orders amid lower prices."
China Shipbuilding, the coun-try's largest builder of naval and commercial vessels, reported NT$3 billion in net losses last year. It is scheduled to be privatized by the end of next year, according to the timetable set by the Cabinet-level Council for Economic Planning and Development.
However, China Shipbuilding still faces a shortage of NT$16 million in working capital, according to Fan.
To help revive the company, Fan said it has secured orders to build nine vessels for both domestic and foreign clients. These orders, valued at US$250 million, will be filled by the third quarter of 2004, he added.
The company is also seeking support from the Ministry of National Defense for the construction and maintenance of navy vessels, despite serious doubts about its ability to construct the sophisticated ships, Fan said.
The US government agreed in April to sell Taiwan four Kidd-class destroyers, eight diesel-powered submarines and reconnaissance aircraft in order to maintain a military balance across the Taiwan Strait.
"As long as the US can offer us certain technological assistance and design blueprints, we believe we can build the subs," Fan said. By doing that, it will also help upgrade the standard of Taiwan's defense technology and solve the country's unemployment problem, he added.
The company has contacted potential foreign contractors for the project -- such as German shipyard Howaldswerke-Deutsche Werft and General Dynamics Corp of the US -- to be included on a technical basis.
"We would suggest foreign contractors build the first two subs abroad and allow us to help build the remaining six here," Fan said.
"Once these subs are put into service, they will be used for between 20 years and 30 years, and we are expecting to earn up to NT$400 million a year through repair and maintenance work on these subs," he said.
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