Austal JV to build ferries in China

Henderson-based Austal has formed a joint venture with a Chinese shipbuilding company to build ferries in China.

Austal will own a 40 per cent stake in the joint venture, which will be named Aulong Shipbuilding Company, while Guangdong Jianglong Shipbuilding Company will own a 60 per cent interest.

The joint venture will build and market commercial aluminium vessels designed by Austal, with manufacturing to take place at Jianglong’s existing facilities in the Guangdong province.

The high-speed passenger ferries will replace existing ferries in China, which service domestic routes in that country.

“The Chinese government mandates a maximum operating life of 25 years for commercial high-speed ferries,” Austal said in a statement.

“As a result, Austal anticipates that all of these vessels, as well as high-speed ferries built by other manufacturers, will need to be replaced progressively during the next few years.

“The Chinese passenger ferry market was Austal’s first major export market, and since 1990 the company has delivered 52 high-speed aluminium ferries to 20 customers in China, Hong Kong and Macau.”

Austal chief executive David Singleton said the company would be able to compete in the domestic Chinese market without the need to develop new shipyard facilities thanks to the joint venture arrangement.

“We are combining the strength of a current high-quality shipyard in China with Austal’s market leading designs,” he said.

“The ferry market is global and we have to position ourselves accordingly. Out decision at the start of the last decade to build ferries in the US led to our current large operational footprint in that country.

“China is a market in which we also need an established local presence.”

Austal will appoint a general manager for the joint venture.

Austal shares closed 1.1 per cent lower to $1.28 each.