Chinese Wheel Manufacturer Enters Shipbuilding Sector

Chinese wheel manufacturer, Xingmin Intelligent Transportation Systems Group (Xingmin ITS), has purchased a 30% stake of Zhejiang East Coast Shipbuilding from Yangfan Group.

The Shenzhen-listed company, known for its production of steel automobile wheels, will pay $50.5m (RMB360m) for the 30% stake in the subsidiary of Yangfan Group.

The shipbuilding company was founded in 1952, and was acquired by Beijing Jianlong Heavy Industry Group in August 2006. Affiliated shipyards of Yangfan Group include Zhoushan Dashenzhou Shipbuilding, and Zhejiang East Coast Shipbuilding. The annual shipbuilding capacity reaches 1.5 million deadweight tons (dwt).

The first move in an effort to expand and diversify its business portfolio, Xingmin ITS announced the investment is part of the company’s strategic development plans to expand into the shipbuilding market.

Zhejiang East Coast Shipbuilding covers an area of 790,000 square metres, and is equipped to build ships under 100,000dwt, including car carriers, container ships, bulk carriers, and tankers.

Though the yard has failed to deliver profits for the past two years, Xingmin ITS has entered into a 5-year cooperation agreement with Wuhu Shipyard to jointly construct 37 vessels between 2025 and 2029 in order to stabilise the operation and profitability.

The vessels will include eight 89K bulk carriers, one 7000PCTC, one 14600 heavy lift ship, six 38K stainless steel chemical tankers, four 49K petrochemical tankers, seven 50K petrochemical tankers, and ten 27650DWT multipurpose ships.

This move from Xingmin ITS highlights a significant shift in the shipbuilding industry. By leveraging its expertise in manufacturing and supply chain management from the automotive industry, Xingmin ITS aims to offer a different approach to design, production efficiency, and supply chain logistics.

The collaboration with Wuhu Shipyard not only secures a steady stream of shipbuilding projects for the company over their 5-year agreement, but reinforces their commitment to becoming a significant player in the industry.

The investment aligns with China’s broader industrial policy to improve its global trade presence and manufacturing capabilities by reducing dependency on vessels built outside the country.

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