CSBC Corp Taiwan (台船) yesterday said it is confident that it will be able to stage a turnaround and weather a slump in the global shipbuilding industry thanks to government projects.
The company this year secured NT$17.8 billion (US$578.56 million) in government contracts to build the nation’s first homegrown submarine fleet, including its winning bid to build two amphibious transport ships for NT$4.64 billion as part of the navy’s Hung Yun project, chairman Cheng Wen-lon (鄭文隆) said in a statement.
It has also been awarded the contract to build 15 100-tonne and four 1,000-tonne vessels for the Coast Guard Administration, Cheng said.
The company expects to sign the submarine contract next year, which is valued from NT$50 billion to NT$60 billion, Cheng said, adding that these projects are key to CSBC’s plan to diversify its business and reduce its dependence on building commercial cargo ships, which accounted for about 90 percent of its revenue last year.
Apart from military contracts, the company has also been cultivating local talent as part of the government’s efforts to harness energy from offshore wind farms.
While the global cargo shipping sector last year began to show signs of recovery, it would take at least another year to see an uptick in new vessel orders from shipbuilders, Cheng said.
Cheng, a former Ministry of Transportation and Communications official who oversaw the building of Taiwan’s most important highway and tunnel projects prior to his appointment as CSBC chairman in 2016, said that he is aware of the challenges the shipbuilder faces.
A wave of reckless expansion pushed the global number of shipbuilders to 934 in 2008, but the figure has tumbled to 358 this year, of which 163 at the end of last year ran through their order backlogs, Cheng said.
Many shipyards would continue to see rising idle capacity next year, he added.
Cheng’s NT$3.02 million compensation came under fire following a Legislative Yuan Budget Center report published last month highlighting the pay of executives at loss-making state-affiliated companies, as CSBC logged losses of NT$5.8 billion at the end of last year.
Cheng said that he and 60 other CSBC top executives had agreed to pay cuts of 10 to 20 percent to prevent affecting the salaries of the company’s 3,000 front-line employees.
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