According to media reports that Jiangsu Rongsheng Heavy Industries (Rongsheng Heavy Industries) is about to restart.
According to shipbroker MB Shipbrokers (formerly Maersk Broker), Rongsheng Heavy Industries has received financial support and signed a series of orders for 12,000 TEU liquefied natural gas (LNG) dual-fuel powered containerships with the world’s largest container shipping company, Mediterranean Shipping Company (MSC). As once China’s largest private shipbuilding enterprise, Rongsheng Heavy Industries may usher in the “resurrection”.
MB Shipbrokers said the restart of Rongsheng Heavy Industries could boost global shipbuilding capacity by 1%. It also said that in addition to containerships, Rongsheng Heavy Industries is expected to start delivering large tankers and bulk carriers by the end of 2026.
Once China’s largest private shipbuilder, it announced its exit due to high debts
According to public information, Rongsheng Heavy Industries was founded in 2005 and started to build its shipyard in Nantong in October of the same year. Only 4 months after the construction of the shipyard started, Rongsheng Heavy Industries announced in February 2006 that it had taken orders for six 75,500 dwt ice-strengthened bulk carriers, and took orders for a total of 19 bulk carriers and 30 Suezmax tankers in 2006, which made Rongsheng Heavy Industries become the private shipbuilding enterprise with the largest amount of handheld orders in the country.
From 2006 to 2011, Rongsheng Heavy Industries enjoyed a period of rapid development, with its business expanding from shipbuilding and offshore to power engineering. In 2010, Rongsheng Heavy Industries was listed on the main board of the Hong Kong Stock Exchange, becoming the largest private enterprise listed in Hong Kong of that year. From 2010 to 2012, Rongsheng Heavy Industries ranked first in the world in terms of hand-held orders, and became the largest private shipbuilding enterprise in China.
Good times did not last long. In 2012, Rongsheng Heavy Industries had its first annual loss after listing, which amounted to RMB 573 million, and fell into the predicament of broken capital chain in 2013, and the total loans from financial institutions to Rongsheng Heavy Industries even exceeded RMB 25 billion at one time during the peak period of indebtedness.
In 2014, Rongsheng Heavy Industries was suspended for restructuring with a loss of RMB 7.75 billion and abandoned orders of up to 59 vessels, and announced the acquisition of New Continental Oil & Gas, which gained the co-operative operation rights of four oil fields in Fergana Basin of Kyrgyzstan, a country in Central Asia; In 2015, Rongsheng Heavy Industries changed its name to China Huarong Energy Company Limited (Huarong Energy) and changed its business to oil and gas market; In 2019, two 900-ton gantry cranes at the Rongsheng Heavy Industries site were dismantled and sold to other shipyards; in 2020, Rongsheng Heavy Industries site began to be leased.
Another order rumor, Rongsheng Heavy Industries restarts its shipbuilding business soon?
It is worth noting that this order with MSC for a series of 12,000 TEU LNG dual-fuel containerships is not the first order rumor since Rongsheng Heavy Industries withdrew from the shipbuilding industry. As early as 2022, there were rumors that Rongsheng Heavy Industries was in the process of receiving new ship orders and was expected to restart its shipbuilding business.
In May 2022, mining giant Vale sought to build 14 300,000 dwt dual-fuel ultra-large ore carriers (VLOCs) and said it was in the process of approaching several Chinese shipyards, including Rongsheng Heavy Industries. In November, Rongsheng Heavy Industries was rumored to change its name to SPS Shipyard and signed a letter of intent with a subsidiary of Greek shipowner George Economou for the construction of 10 bulk carriers. However, according to the news at that time, due to the amount of capital was too large, Rongsheng Heavy Industries re-launch road did not make much progress.
The last vessel built by Rongsheng Heavy Industries was delivered in 2017, Clarkson data show. From 2008 to 2017, Rongsheng Heavy Industries delivered a total of 94 vessels, about 16.43 million deadweight tons.
In its heyday, Rongsheng Heavy Industries had 4 large docks equipped with 6 sets of 900-ton gantry cranes, 1 set of 600-ton gantry crane and 1 set of 1,600-ton gantry crane, which was the largest in China at that time. It has 8 outfitting wharves and 2 material wharves, together with supporting modern facilities and equipments such as steel plate pre-treatment workshop, component factory, flat and curved section workshop, pipe manufacturing workshop, coating workshop, etc. The designed annual shipbuilding capacity is 8 million DWT. Rongsheng Heavy Industries’ No. 1 to No. 3 docks were completed between 2005 and 2009, and No. 4 dock was put into operation in 2011.