China to create shipbuilding giant
China's cabinet has given preliminary approval to merge the country's two largest shipbuilders, China State Shipbuilding Corp with China Shipbuilding Industry Corp, the country is all set to create ship building Behemoth. A Reuters report said that the move, which will create a firm that will dwarf its South Korean rivals such as Hyundai Heavy Industries Co, could still be subject to change as many details needed to be ironed out by ministries and regulators. Further, a slew of units belonging to the two companies, such as CSSC Offshore & Marine Engineering Group Co Ltd, CSSC Science & Technology Co Ltd and China Harzone Industry Corp Ltd issued similar statements to clarify on media reports. The two companies have combined revenue of at least 508 billion yuan (S$106 billion) and have multiple shipyards across China whose products range from aircraft carriers to commercial ships which carry oil and gas. The move could be subject to change as many details need to be ironed out by ministries and regulators, the people said. Both companies have subsidiaries that trade on the stock exchanges in Shanghai and Hong Kong. According to Business Times, the two Chinese groups, including their units, had 10.4 million compensated gross tons in order backlog as of February, equivalent to about 13 per cent of the market. That compares with 7.72 million tons at South Korea's Hyundai Heavy, according to the latest report by shipping services provider Clarkson. Incidentally, CSSC faces financial difficulties due to the effects of the shipbuilding downturn.