AVIC Singapore to Construct Five Service Vessels

AVIC Singapore to Construct Five Service Vessels

Shipbuilding management and consultancy services provider AVIC International Investments Limited, announced that it has secured a USS60 million contract awarded for the construction of five vessels – three units of Azimuth Stern Drive tugboats with 55 tons bollard pull each, one unit of diver boat, and a bunkering tanker with 1000 deadweight ton cargo capacity.

These service vessels, which will be built at the Group’s subcontracted shipyards in China, are scheduled for delivery in 2013. The latest contract win is expected to contribute positively to the Group’s earnings for FY2012 and FY2013.

AVIC International Holding Corporation, the majority shareholder of the AVIC Singapore, has provided the performance guarantee to the ship-owner in connection with the contract.

AVIC Singapore’s Non-Execulive Chairman Dr Diao Weicheng said, “This is our first major shipbuilding contract win since our listing on the Singapore Exchange in September last year. It is especially significant for us because our role is not only shipbuilding M&C but includes the entire new building process – signifying our gradual move into shipbuilding. We are forging ahead with our growth strategy to expand along the ship-design, shipbuilding and ship-trading related businesses value chain, in addition to further developing our existing shipbuilding M&C business.”

As announced during the Group’s listing, AVIC Singapore intends to eventually consolidate the shipbuilding and ship-trading activities of AVIC International under its wing. One of AVIC Singapore’s plans is to explore the possibility of incorporating a subsidiary in Shanghai as a platform for consolidation.

Marking the first step to integrate AVIC International’s shipping-related businesses, AVIC International has appointed Dr Diao as Vice President of AVIC International, and he will be taking the lead responsibility in the ship-trading and ship-building business as well as the EPC (engineering, procurement and construction) business within AVIC International’s group of companies (“AVIC International Group”). Dr Diao’s appointment empowers him to take charge of ship-trading and ship-building activities of the AVIC International Group, and in turn, the authority to consolidate all such activities under one roof.

In addition, Dr Diao was appointed as the non-executive Chairman of the boards of following companies within AVIC International Group:

• AVIC International Beijing Co., Ltd (“AVIC Beijing”)

• AVIC International Guangzhou Co., Ltd (“AVIC Guangzhou”)

• AVIC International Xiamen Co., Ltd (“AVIC Xiamen”)

• AVIC International Shanghai Co., Ltd (“AVIC Shanghai”)

AVIC holds 62.5% of the registered capital of AVIC International, which in turn holds 100% of the registered capital of AVIC Beijing. AVIC Beijing, AVIC Guangzhou, AVIC Xiamen and AVIC Shanghai are AVIC International’s subsidiaries which are engaged in the shipbuilding and ship-trading related businesses.

Commenting on the Group’s prospects, Dr Diao said, “With the global economy continuing to be uncertain against fears of a full-blown Eurozone crisis, the global shipping industry has been experiencing a slowdown. Nonetheless, we are heartened that the PRC government remains committed to becoming the largest shipbuilding nation in the world.”

“We are optimistic of the long-term development of the global shipbuilding industry and are positioning ourselves to ride on the growth of its recovery. Our growth strategy remains intact, which includes developing our own shipbuilding capabilities, establishing research and design capabilities especially in the areas of technologically-advanced vessels, as well as expanding our global reach,” concluded Dr Diao.

Source: AVIC, April 3, 2012

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