Austal's new Chinese JV bags first contract for high speed ferry
Austal Limited (Austal) (ASX:ASB) is pleased to announce the award of the first ferry contract to Aulong Shipbuilding, a joint venture company by Austal and Guandong Jianglong Shipbuilding of Zhuhai, China, the Company said in a media release.
Less than two months after the announcement of the joint venture, Aulong Shipbuilding has been awarded a A$10 million (RMB49.99 million) contract to design and build a 42 metre high speed aluminium ferry for Chinese mainland operator, Blue Sea Jet. The contract was awarded following a competitive evaluation based on product performance, price and commercial terms.
The ferry is based on a proven Austal design developed in Australia to world class standards. The design optimises performance, fuel efficiency and passenger comfort and will carry up to 288 passengers on the Zhuhai – Hong Kong route, at speeds in excess of 36 knots.
Construction of the vessel is anticipated to commence in October 2016, with delivery scheduled for October 2017.
Austal has appointed an Australian General Manager to oversee the delivery of this and all subsequent vessels contracted, to ensure that Austal’s renowned quality and customer satisfaction is maintained in the joint venture.
Announcing the contract, Austal Chief Executive Officer David Singleton remarked “To win our first vessel to be built in China within weeks of setting up the joint venture is a great testament to Austal and our joint venture partner, Jianglong Shipbuilding. This is another export win for an Australian designed vessel in a competitive market and clearly validates both the joint venture and the decision to build in China.”
“Austal has previously delivered 52 vessels to 20 customers in China, Hong Kong and Macau from our Henderson, Western Australia shipyard. Now, with an in-country solution utilising Australian design and technology and a proven local shipbuilder, we can cost effectively pursue more opportunities and expand our market share in mainland China,” he added.
“Set up costs and general, non-recurring expenditure required to deliver this first contract mean this vessel, whilst strategically important in a huge market, will not contribute to overall group earnings and will require some modest capital expenditure by Aulong Shipbuilding.”
Aulong Shipbuilding Co. Ltd (Aulong) is a joint venture between Guangdong Jianglong Shipbuilding Company (Jianglong Shipbuilding) of Zhuhai, China and Austal Limited, established in June 2016 with the aim of pursuing commercial passenger and non-military vessel opportunities in mainland China. Austal (with 40% ownership) has licensed a number of its proven, commercial aluminium vessel designs for marketing throughout mainland China and construction at Jianglong Shipbuilding’s established facilities in Guangdong province. Jianglong Shipbuilding (with 60% ownership) brings local shipbuilding infrastructure, experience and expertise, with close to 1,000 employees across two shipyards supporting the joint venture.
Austal is a global defence prime contractor and a designer and manufacturer of defence and commercial ships. For more than 27 years Austal has been a leader in the design, construction and maintenance of revolutionary ships for governments, navies and ferry operators around the world. More than 255 vessels have been delivered in that time.
