Hong Kong-listed China Ocean Industry has announced that it has entered into a cooperation framework agreement with Xiamen Xiangyu Group, Nantong Wangzhe Shipbuilding, Zhu Jianhua, owner of Nantong Wangzhe and Li Ming, chairman of China Ocean Industry, to jointly set up a joint venture company.
The jv, which has yet to be named, will engage in shipbuilding, shipping logistics, leasing of ports and shipbuilding related financial leasing businesses. Total investment on the joint venture is RMB200m ($28.7m).
Xiamen Xiangyu is a state-owned investment holding company and Nantong Wangzhe is ship structure manufacturer.
According to China Ocean Industry, the company will consider diverting its shipbuilding business to Nantong, which offers a lower cost of material procurement and transportation upon establishment of the joint venture.
“The diversion can ease the sustained loss suffered by the group’s shipbuilding business, and spare extra capacities to its intelligent car-parking and automotive business and other new business opportunities the company many venture into,” the company said.