Shipbuilding Industry Cluster

Shipbuilding industry is a large-scale equipment manufacturing industry with characteristics of highly advanced technologies, highly associated relationship among industries, and dense combination of capital and labor force. Speeding up development of shipbuilding industry will be of great significance for Yangzhou City to bring the regional advantage of locating along Yangtze River into full play.

1. Analysis of existing circumstance for shipbuilding industry cluster in Yangzhou City

Our city is an ideal place to develop shipbuilding industry because of long history of shipbuilding and perfect resources along Yangtze River . There are more than 200 various ship repairing and building enterprises with annual shipbuilding output of over 700,000 deadweight ton. In 2003, it reached gross industrial output at current price of 2 billion Yuan. It has built various kinds of ships such as bulk carrier, container ship, special chemical cargo ship, oil tanker, push boat and so on. Shipbuilding industry in our city centralizes in three parts of Hanjiang Xinba, Jiangdu Sanjiangying and Yizheng Twelfth Dyke, which have about 15 km coastlines and about 150,000 employees. There are one dry dock of 80,000 tonner, three slideway building berth of 20,000 tonner, one shipyard of 10,000 tonner, two building berth of 10,000 tonner and other large-scale shipbuilding facilities. The relatively large shipbuilding enterprises include Yangzhou Ocean Shipbuilding Co. Ltd., Jiangdu Ship Group Corporation and Jiangsu Jinling Ship Co. Ltd..

1). Yangzhou Ocean Shipbuilding Company. In November 2003, China Chunhe Group and French Bobang Group regroup Jiangyang Group and established Yangzhou Ocean Shipbuilding Company. Until now, the company has received orders for shipbuilding with the agenda pushed back to 2006. In May 2004, the company invested 200 million Yuan at the first stage to reconstructed Xinba base. Contents of reconstruction includes steel dock, storage yard, preprocessing field, blanking and processing field, sub assembling and subsection construction field, hull painting and outfitting field and so on. After completion of reconstruction, the base can annually build six ships with 20,000 to 50,000 deadweight ton. The company is planned to invest 700 million Yuan in the second stage in order to reconstruct and enlarge its original 150,000 tonner shipyard into a shipbuilding field with annual output of 8 ships with 50,000 deadweight ton. After completion of this project, Xinba shipbuilding base will have capacity of building bulk carrier, container ship and other ships with 50,000 deadweight ton. Wantou shipbuilding base will become a “double-height” ship base for building oil platform supply ship.

2). Jiangsu Jiangdu Ship Group Corporation. The company has one 80,000 tonner dry dock, one 100,000 ton building berth especially for floating dock with grain-shor direction, one 20,000 tonner longitudinal building berth and one 10,000 tonner longitudinal building berth. In June 2004, Chinese Chunhe Group and French Bobang Group jointly purchased total assets of the company in Sanjiangying and set up Dadong Shipbuilding Co. Ltd. Currently, they are constructing one building berth with more than 70,000 tonner and its relative facilities. It is planned to build a large-scale dry dock with 150,000 tonner in the second stage. The company mainly engages in construction of various container ships, bulk carrier, oil tanker with not more than 80,000 deadweight ton. Capability of shipbuilding now reaches 150,000 complex ton.

3). Jiangsu Jinling Ship Co. Ltd. The company is a medium and large-scale ship base with capability of building more than 50,000 deadweight ton of ships, which belongs to Chinese Yangtze River Shipping Group. The company has relatively strong technical force and advanced production equipments such as large-scale lifting rig, calendering, welding equipment, advanced numerical control cutting machine and wide steel plate preprocessing assembly line. The company has a deep-water bridge type dock, which can moor 30,000 to 50,000 deadweight ton of ship. The company has already formed a complete ship subsection construction system with annual steel consumption of more than 40,000 ton.

4). Yangzhou Shipbuilding Company of Jiangsu Shuntian Ship Company. Jiangsu Shuntian Ship Company builds Yizheng Shuntian Shipbuilding Company and Yangzhou Shuntian Longchuan Ship Company on the Yangtze River coast of Puxi Town in Yizheng City and riverside of Mangdao River in Jiangdu City respectively. After construction of both companies, the group will have one building berth with 30,000 tonner, five building berth with 10,000 tonner and supplementary subsection construction platforms, steel pretreatment production line, outfitting dock and so on. The company mainly engages in bulk carrier, steel-made oil tanker, special ships and so on with annual steel consumption of about 50,000 ton.

In addition, these backbone enterprises of special ship building industry represented by Jiangdu Kejin Ship Co. Ltd, and Yangzhou Wuyang Shipbuilding Co. Ltd have possessed a certain foundation in aspects of production ability, technical equipment, grade of products and technical level of employees. After reorganization by China Classification Society, these enterprises can build oceangoing vessel, barge, cargo ship, oil tanker, ferry boat, steam liner, chemical tanker and engineering ship with not more than 20,000 deadweight ton and 200 meters. These enterprises have advanced quality detection equipments and enjoy certain credibility. They also have the right of self-management of export. Some parts of their products have been sold to Japan , Korea , Southeast Asia , Europe and other countries and regions.

2. Analysis of advantageous conditions for developing shipbuilding industry

1). Advantageous geographic location. Yangzhou lies in the Yangtze Delta region and overlaying area of Nanjing and Shanghai metropolitan circles, therefore, it enjoys a unique regional advantage. Construction of Runyang Yangtze River Bridge and high-class highways along the river provides the development of shipbuilding industry with more favorable transportation conditions. The advantage of water front resources in Yangzhou is obvious. The coastline along Yangtze River in Yangzhou City is 74.9 km and extends smoothly and straightly. The thalweg is near to the bank. The soil of riverbank is clay bed which is one of the finest quality of soil. The bottom of river is rock structure so that the flow of water is calm and drop height between upsurge and ebb is small. Climate in the area is mild and rainfall is moderate. Therefore, this area is one of the golden parts for ship building in the middle and lower reach of Yangtze River .

2). Well-constructed infrastructures. After many years' development and construction, electric power, water supply, sewage disposal, telegraphic communication, port and other infrastructures in Yangzhou have been perfectly constructed. Therefore, Yangzhou possesses a good industrial base and infrastructure supporting system for developing shipbuilding industry. Now the industry has one dry dock of 80,000 tonner, three slideway building berth of 20,000 tonner, one shipyard of 10,000 tonner, two building berth of 10,000 tonner and other large-scale shipbuilding facilities. The capability of annual shipbuilding reaches more than 500,000 deadweight ton.

3). Advantages of joint venture cooperation and system. China Yangtze River Shipping Group (Changhang Group) is the largest backbone shipping enterprise of inland water in China . Jiangsu jinling Ship Co. Ltd. whose stocks are mostly held by Nanjing Jinling Ship Factory of Changhang Group has abundant technical force. The company locates in a stable waterfront. It has become the first choice for Changhang Group to build medium and large-scale ships with more than 50,000 deadweight ton. From the end of 2003 to the beginning of 2004, French Bobang Group and Zhejiang Chunhe Group invested large sum of money to successively regroup partial assets of Jiangyang Group and Jiangdu Ship Group and set up Ocean Shipbuilding Co. Ltd. and Dadong Shipbuilding Co. Ltd. Jiangsu Shuntian Shipbuilding Corporation is a backbone enterprise which took the lead to engage in ship exporting in Jiangsu Province. In recent years, by virtue of introducing foreign and private capitals, Yangzhou Shuntian Longchuan Ship Co. Ltd. and Yizheng Shuntian Shipbuilding Co. Ltd have been set up. With entry of large-scale enterprises and groups at home and abroad, the operation mechanism of shipbuilding enterprises in our city has been thoroughly changed. Therefore, shipbuilding industry in our city gradually steps into a new era of development.

4). Advantage of industrial accessory. Jiangsu is a big shipbuilding province. There are more than 200 shipbuilding accessory enterprises along Yangtze River . The production levels of power plant, marine deck machinery, accommodation equipment, propelling device, outfit of deck and accommodation and so on are all in leading positions. Because shipbuilding industry needs plenty of steel, iron and other raw materials, Nanjing and Maanshan in the upper stream of Yangzhou, Zhangjiagang in the down stream of Yangzhou, and Shanghai, which are all important iron and steel industry bases, can become raw materials bases for developing shipbuilding industry in Yangzhou.

5). Advantage of human resource. The shipbuilding industry in the whole city has about 15,000 employees, among which there are nearly 2000 professional technicians. On the opposite side of the river, there is Zhenjiang City , where Jiangsu University of Science and Technology (the former East China Shipbuilding Institution) locates. This university is a talents cultivation base for shipbuilding industry. It has strong research and development capability in the areas of ship design and manufacture technology, marine engineering, shipbuilding automatization and control technology, welding technique, new materials and so on. It provides shipbuilding industry with more than 3000 professional talents annually. The opening to traffic of Runyang Yangtze River Bridge will facilitate communication between the two cities and talents exchanging will be more frequent. In addition, there is abundant labor force in Yangzhou City . This industry possesses not only relatively high-level managers of science and technology and administration, but also a group of advanced technicians and skillful workers with special skills. Moreover, the cost of labor force is relatively low.

3. Thoughts for developing textile and clothing industry cluster

1). Guiding ideology

Rely on regional and resources advantages in Yangzhou, guided by market at home and abroad, regard promoting international competitiveness of shipbuilding industry as its core task, regard advance of science and technology and system innovation as drives, pay equal attention to ship repairing and building, strengthen supplementary construction, cultivate distinctive features, adopt strategies of introducing foreign capital and establishing domestic connections, higher starting point, more input, faster output and income, promote shipbuilding enterprises to develop into large-scale ones and industrial centralization development, and realize structural adjustment and industrial upgrade of shipbuilding industry in Yangzhou City.

2). Goals of development

Through five to ten years' struggles, construct three to five modernized medium and large-scale shipbuilding general factories with distinctive features in Yangzhou City, which are in line with modern shipbuilding patterns and can build serialization of ships with high-tech and high value added, form a group of shipbuilding accessory products with enterprise centralization effect and characteristics of “profession, specialty, elaboration and new”, and set up a comprehensive shipbuilding industry system with trading market.

Till 2005, form shipbuilding capability of 1 million deadweight ton, shipbuilding output of 700,000 deadweight ton, and realize gross industrial output at current price of 4 billion Yuan. Till 2010, shipbuilding capability will reach 2 million deadweight ton, output of shipbuilding will exceed 1.4 million deadweight ton, and gross industrial output at current price will reach 8 billion Yuan.

Set up one 150,000 tonner shipyard and two 100,000 tonner shipyards and accessory facilities, complete the construction of four 50,000 tonner building berths and 6 30,000 tonner building berths, and build two shipbuilding fitting bays with more than 10,000 tonner.

3). Arrangements of layout

According to developing layout along Yangtze River of Yangzhou Government, make out about 18 km coastline along the River in Hanjiang Xinba, Jiangdu Sanjiangying and Yizheng Twelfth Dyke, among which there is newly developed deep water coastline of about 3 km long. Rely on Ocean Shipbuilding Company, Dadong Shipbuilding Company, and Jiangsu Jinling Shipbuilding Co. Ltd. to set up shipbuilding industrial park, attract small and medium shipbuilding enterprises, equipments for marine type and supplementary enterprises to enter the park, and form three large shipbuilding and components production bases in the middle, eastern and western parts long the River in Yangzhou City.

1). Hanjiang Xinba Shipbuilding industrial park. Regard Ocean Shipbuilding Company as core enterprise, integrate production materials of shipbuilding and repairing in Yangzhou , and concentrate on developing ships with huge tonnage and special ships with high-tech and high value added.

2). Yizheng Twelfth Dyke shipbuilding industrial park. Regard Jiangsu Jinling Shipbuilding Co. Ltd. as core enterprise, integrate production material of shipbuilding and repairing in Yizheng City, and concentrate on developing special ships with high-tech and high value added and ship outfitting.

3). Jiangdu Sanjiangying shipbuilding industrial park. Regard Dadong Shipbuilding Company as core enterprise, integrate enterprise resources of small and medium enterprises in Jiangdu City, and concentrate on developing ships with huge tonnage, accessory products for ship, and ship repairing.

4. Development highlights of shipbuilding industry in Yangzhou City

Supported by backbone enterprises, regard strategies of introducing foreign capital and establishing domestic connections as cut-in point, actively support China Chunhe Group, Changhang Group and Jiangsu Shuntian Group to invest in Yangzhou, fully and reasonably use the limited resources along the sides of Yangtze River, and form shipbuilding industrial system with complement between general ships and special ships, coordination between monolithic ships and ship accessories, and joint development between key enterprises and normal enterprises as soon as possible.

1). Container ship and bulk carrier with huge tonnage. Traditionally, container ship and bulk carrier with huge tonnage are always the most competitive products of shipbuilding industry in our city. After many years' development, we have accumulated abundant manufacturing experiences. Recently, projects of dry dock with 100,000 tonner of Ocean Shipbuilding Company, building berth with more than 70,000 tonner and dry dock with 150,000 tonner of Dadong Shipbuilding Company, dry dock with 100,000 tonner and 500 meters outfitting dock of Jiangsu Jinling Shipbuilding Company, have provided a platform for Yangzhou to easily participate in international competition in the aspect of general production output and technical level, consolidated and promoted the position of shipbuilding industry in Yangzhou City among the entire shipbuilding profession at home and abroad, and strengthened the competitiveness of Yangzhou in the field of shipbuilding products with more than 50,000 tonner.

2). Special ships with high contents of high-tech and high value added. Give priority to develop steam liner, chemical tanker, container ship, bulk carrier, oil platform supply vessel, oil tanker and other products with a certain foundation of shipbuilding industry in our city, further optimize structure of shipbuilding industry in our city, form leading ship types with seriation, standardization and clear arrangement, improve the fundamental strength of shipbuilding industry in our city, and enhance competitiveness of small and medium shipbuilding enterprises.

3). Shipbuilding accessory industry. Actively introduce engineering, electronic, metallurgical, instruments and meters industry to participate in development of shipbuilding accessory industry, attract shipbuilding accessory production enterprises at home and abroad to invest and set up factories in Yangzhou, concentrate on building steel processing and delivery center and foundry processing center, invest and build production enterprises engaging in anchor winch, auxiliary engine, vessel sinker wheel machine, accident boat, radio navigation system and other products, and promote production level of specialization. Support introducing, digesting, absorption and self-innovation of technologies of key equipments for marine type, enhance technical level and grade of key accessory products. Meanwhile, build markets for steel for marine type, decoration building materials and auxiliary accessory product, and actively drive the multiple industrial cluster development of ship repairing, shipbreaking, marine engineering, marine electric and electronic, steel structure and so on.

4). Ship repairing industry. Currently, the average gross profit of shipbuilding enterprises in China is about 4% to 5%, while the average gross profit of ship repairing can reach about 20%. There are about 20 billion to 30 billion US dollars market annually of ship repairing industry in the world. The market is now mainly centralized in Taiwan and Singapore . Meanwhile, the business of ship repairing is an incidental one, which has close relationships with development of port trade and shipping industry. Therefore, firmly grasp the chance to build one deep-water berth with 30,000 tonner in Jiangdu Port and one universal berth with 20,000 tonner in Yizheng Port, seize opportunities of cooperative construction between Yangzhou Port Affairs Co. Ltd and Cosco Pacific Ltd. and rapid development of port trade, promote the proportions of foreign ships and high-tech ships repairing, and further develop the business of ship alterations.

5. Countermeasures for developing shipbuilding industry in Yangzhou City

1). Strengthen industrial coordination and guidance, and do well in industrial layout. Administrative department in charge of the industry should strengthen industrial coordination, guidance, supervision and management in order to prevent low-level redundant construction and disordered development of shipbuilding industry. From now on, it is forbidden , in principle, to newly add small shipbuilding enterprises with rough conditions, small-scale, low contents of technical level and insufficient investment. Those shipbuilding enterprises with backward technologies, resources wasting, low-grade quality and environmental pollution, which are not in line with safety requirements in production, should be closed according to lows and regulations. The key areas for developing shipbuilding industry of Hanjiang Xinba, Jiangdu Sanjiangying and Yizheng Twelfth Dyke should, in accordance with layout of shipbuilding industry in Yangzhou , stipulate development layout of local shipbuilding industry and relative policies. On the request of higher start-point, large-scale, and complete function accessory, simultaneously take ecological protection and reasonable usage of waterfront into full consideration, make long-term layout, implement step by step, introduce centralization development of shipbuilding enterprises, strictly restrict projects which are beyond the layout or not in line with the overall requirements of the layout. Establish shipbuilding industry association, organize external business, and reasonably distribute resources and information.

2). Actively carry out introducing foreign capital and establishing domestic connections, enlarge and strengthen backbone enterprises, and realize large-scale production of shipbuilding industry. Enlarge and strengthen enterprises through combination, merger, purchase and so on. Cultivate Yangzhou Ocean Shipbuilding Co. Ltd., Dadong Shipbuilding Company and Jiangsu Jinling Shipbuilding Co. Ltd. and other backbone enterprises by means of market mechanism and measures, speed up development towards shipbuilding general factory with modern shipbuilding pattern, introduce small and medium enterprises to develop in the direction of subsection and module production, and professional factory of accessory products. The three shipbuilding industrial parks should strive to create good investment environment, through guidance of policy, speed up paces of introducing foreign capital and establishing domestic connections, and attract large-scale shipping and shipbuilding enterprises (groups) at home and abroad and private capital to invest and develop shipbuilding industry n Yangzhou .

3). Carry forward technical advance, speed up construction of informatization, and realize digitalized shipbuilding. Actively introduce advanced and applicable design and manufacturing technologies at home and abroad, carry forward combination of production, study and research, carry forward modern shipbuilding pattern, speed up popularizing and application of new technology and craftwork, shorten the difference with advanced technologies at home and abroad. Efficiency is the core element of enterprise competitiveness. Informatization is one of the most effective measures to promote production efficiency. Therefore, speed up the pace of informatization construction of shipbuilding enterprises, comprehensively apply information technology, promote industrialization with informationlization, strive to enhance production efficiency, realize digitalized shipbuilding as soon as possible, and realize new stride of shipbuilding industry.

4). Develop shipbuilding accessory products, extend industrial chains, and actively cultivate shipbuilding accessory market. Rely on the current shipbuilding and repairing industry and market, encourage and support enterprises to produce shipbuilding accessory products, and enhance the rate of embarkment of equipments in mainland. On the basis of self-development, seek combination with technical advanced and famous manufacturers, such as developing and producing machinery, electric machine and apparatus, decorating material, high performance paint and so on for marine type, concentrate on encouraging the development of marine main engine, ship service power unit, crankshaft for marine type, auxiliary engine, electronic instrument and so on. Actively cultivate shipbuilding accessory market, gradually form important materials circulation and products information center for shipbuilding industry along Yangtze River , through development of shipbuilding and its accessory products transaction, bring about development of a group of relative industrie.

5). Attach importance to talent cultivation and introduction, and reinforce scientific investment. Concentrate on talent cultivation and introduction, encourage talents with high-tech to become a shareholder with their scientific and technological achievements, attach importance to training of professional skilled workers. Through joint trusted cultivation, recruiting students in a fixed position, on-the-job training and other forms carried out by enterprises with combination of professional universities and technical schools, resolve problem of lacking of talents in shipbuilding enterprises. Raise money through multiple channels, actively ask for supporting policies for developing shipbuilding industry from the State and provincial government, reinforce scientific research investment, organize people to tackle key problems of “production, study and research” step by step, and enhance technical innovation capability of marine equipments.