China Shipbuilding Forecasts Profit (17 Sep 2002)

Debt-ridden China Shipbuilding Corp is predicting it will report NT$200 million in pretax profit this year and hopes it could return to profitability within two years by building and repairing naval vessels.

China Shipbuilding, the country's largest builder of naval and commercial vessels, reported NT$3 billion in net losses last year.

It is scheduled to be privatized by the end of next year.To help revive the company, the shipyard secured orders to build nine vessels for both domestic and foreign clients. These orders, valued at US$250 million, will be filled by the third quarter of 2004.

The company is also seeking support from the Ministry of National Defense for the construction and maintenance of navy vessels, despite serious doubts about its ability to construct the sophisticated ships.

The US government agreed in April to sell Taiwan four Kidd-class destroyers, eight diesel-powered submarines and reconnaissance aircraft in order to maintain a military balance across the Taiwan Strait.

"As long as the US can offer the shipyard certain technological assistance and design blueprints, it believes it can build the subs.

The company has contacted potential foreign contractors for the project -- such as German shipyard Howaldswerke-Deutsche Werft and General Dynamics Corp of the US, hoping to build the first 2 submarines overseas and the remaining six in Taiwan.

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