Rolls-Royce taps shipbuilding boom

By Wang Zhenghua (China Daily)
Updated: 2007-11-30 10:40

Rolls-Royce Plc, the world's leading provider of power systems and services for land, sea and air, plans to expand its manufacturing site in Shanghai and partner with local players to boost its marine business in the country.

The British company has seen 10-fold growth in sales for its marine business in China from 2003 to 2007 on the back of a fast-growing shipbuilding industry and increasing market share.

The firm has secured a US$42 million order from Chinese shipbuilder Sinopacific for steering gear and deck machinery. "In China, the shipbuilding market has boomed very fast in recent years. Nobody could have guessed five to 10 years ago that this would happen," said Rami Jokela, regional director of Rolls-Royce's marine business in Northeast Asia.

The country is the world's third-largest shipbuilding nation with 18 percent of the global market in 2005, lagging behind South Korea and Japan.

Rolls-Royce is considering redeveloping the marine manufacturing site it opened in Shanghai in November 2005, and finding local partners to support its growth, possibly through acquisition.

The plan was prompted by increasing orders from Chinese shipbuilders.

"The order (from Sinopacific) takes us to a record in China this year, with contracts for more than 700 ship sets of steering gear and 300 ship sets of deck machinery," said Bjorn Johnsen, the company's vice-president for marine sales and marketing in China.

"The Chinese market is now the biggest global market for Rolls-Royce for commercial merchant ships," he said.

The government lists shipbuilding as one of its top development priorities and will spend billions of dollars over the next five years to fund the construction of three modern shipbuilding bases near Dalian, Shanghai and Guangzhou.

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