China's third largest shipbuilder by output makes this move as the company's latest effort to cut overcapacity, since the global market is unlikely to see a notable upturn anytime soon, MANA correspondent reported.
Under the plan, its shipyards in Nantong, Zhoushan and Dongguan will be shut down. The company will keep manufacturing bases in Qidong and Dalian as they are capable of producing high-end offshore engineering products such as polar ships, oil drilling platforms and cattle carriers.
A few months ago, China Cosco Shipping Group has integrated all of its shipbuilding assets into one unit – Cosco Shipping Heavy Industry (CSHI).
The move to close down the shipyards will effectively optimize valuable resources to cut overcapacity and avoid defaulting orders made by unstable foreign shipowners, as well as prevent price competition between its subsidiaries.
The Shanghai-based company will also cut delivery capacity of offshore engineering products from 18 to 9 by the end of 2020, as the demand for these types of products has notably dropped in the past three years.