China shipbuilders' profit margin trebles over 3 years to 10%
China's shipbuilding industry, the world's second-biggest by tonnage, has tripled profit margins over the past three years as yards boosted output to leapfrog South Korea for the No 1 spot.
Profitability at China's largest yards, including China State Shipbuilding Corp, the biggest, widened to 10 per cent of sales last year from about 3 per cent in 2003, said a statistics compiler for the China Association of the National Shipbuilding Industry.
South Korean yards such as Hyundai Heavy Industries Co grabbed almost half of last year's orders for new vessels in a global market that rose to a record US$105.5 billion, according to Clarkson plc, the world's biggest ship broker.
China, which produced about a fifth of global tonnage last year, overtaking Japan after nine months, plan to double output through 2015 and develop technology to take the lead.
'They've achieved more efficiency gains over the years because of R&D and efforts to upgrade technology, and they're now reaping the benefits,' said Stephen Zhou, a Hong Kong-based analyst at BNP Paribas Peregrine Securities.
China's shipbuilding industry produced 172 billion yuan (S$34 billion) of ships last year and made 9.6 billion yuan in profit, Xinhua News Agency reported on Jan 31. Exports by the Chinese yards jumped 74 per cent to US$8.1 billion, the agency said.
At government-controlled China State Shipbuilding, which accounted for 40 per cent of the country's output, profit last year exceeded five billion yuan, Xinhua reported on Jan 25. The yard took 100 billion yuan of new orders last year, or more than half of China's total, the company said on Dec 31.
At Guangzhou Shipyard International Co, a unit of China State, profit more than doubled from 98.2 million yuan a year earlier amid a 'consistently bullish' market, the company said on Jan 25. Profit margin for the first nine months of 2006 was 7.2 per cent, up from 2005's 4.9 per cent, 2004's 2.6 per cent and 2003's 1.1 per cent.
Compensated gross tons is a measure of ship size, and the time required and materials used for production.
Profitability at China's largest yards, including China State Shipbuilding Corp, the biggest, widened to 10 per cent of sales last year from about 3 per cent in 2003, said a statistics compiler for the China Association of the National Shipbuilding Industry.
South Korean yards such as Hyundai Heavy Industries Co grabbed almost half of last year's orders for new vessels in a global market that rose to a record US$105.5 billion, according to Clarkson plc, the world's biggest ship broker.
China, which produced about a fifth of global tonnage last year, overtaking Japan after nine months, plan to double output through 2015 and develop technology to take the lead.
'They've achieved more efficiency gains over the years because of R&D and efforts to upgrade technology, and they're now reaping the benefits,' said Stephen Zhou, a Hong Kong-based analyst at BNP Paribas Peregrine Securities.
China's shipbuilding industry produced 172 billion yuan (S$34 billion) of ships last year and made 9.6 billion yuan in profit, Xinhua News Agency reported on Jan 31. Exports by the Chinese yards jumped 74 per cent to US$8.1 billion, the agency said.
At government-controlled China State Shipbuilding, which accounted for 40 per cent of the country's output, profit last year exceeded five billion yuan, Xinhua reported on Jan 25. The yard took 100 billion yuan of new orders last year, or more than half of China's total, the company said on Dec 31.
At Guangzhou Shipyard International Co, a unit of China State, profit more than doubled from 98.2 million yuan a year earlier amid a 'consistently bullish' market, the company said on Jan 25. Profit margin for the first nine months of 2006 was 7.2 per cent, up from 2005's 4.9 per cent, 2004's 2.6 per cent and 2003's 1.1 per cent.
Compensated gross tons is a measure of ship size, and the time required and materials used for production.
