AVIC International expands EPC business to revive yards

AVIC International expands EPC business to revive yards

Singapore: Singapore-listed AVIC International is looking to expand its EPC (engineering, procurement and construction) business in order to improve the profitability of two affiliate yards, AVIC Dingheng and AVIC Weihai.

Sun Yan, ceo of AVIC International, said the group hopes that starting EPC business will help shipowners in cost management and quality control in project management.

“We believe this is a service needed by the market, riding on Deltamarin’s overall capabilities in specialist vessels and offshore structure design,” Sun added.

AVIC International has also established a new joint venture Deltamarin Floating Construction with Deltamarin to handle EPC projects.

Diao Weicheng, executive chairman of AVIC International, said the two shipyards of the group are currently not making profits due to the continued depression in the shipbuilding market.

Diao said the group is working to improve and enhance the operational management of the two yards and the goal is to achieve breakeven by 2016. Both AVIC Dingheng and AVIC Weihai are on the central government’s latest shipyard “white list”, which is expected to provide prioritized support to yards on the list.

According to Sun, AVIC Dingheng is fully booked in terms of production for 2015 and almost fully booked for 2016, holding on hand orders for 17 tankers with total value of about $700m.

Diao said the parent group plans to transfer the yards into a listed entity in the future when they start making money and come up to a standard that meets the Singapore Stock Exchange’s requirements.

Jason Jiang

Jason worked for a number of logistics firms following his English degree, then switched this hands-on experience to writing and has since become one the most prolific writers on the diverse China logistics industry writing for a host of titles including Supply Chain Asia, Cargo Facts and Air Cargo Week. Jason’s access to the biggest shippers with business in China has proved an invaluable source of exclusives.

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