China's largest private-sector shipbuilder, Yangzijiang Shipbuilding, is having an enviable year. The yard's order backlog has ballooned to more than $16 billion, a new record reflecting soaring global demand for tonnage. To handle all the order volume, the company has acquired more than 200 acres of extra land next to its shipyard, including nearly a mile of additional waterfront.
Yangzijiang benefits from surging global interest in buying new tonnage. With Korean and Japanese yards largely full, shipowners are looking to China for newbuild slots, and more than 60 percent of all merchant vessel orders over the year to date have gone to Chinese yards.
Yangzijiang is also securing orders for much more sophisticated tonnage, not just bulkers and tankers. This week, Japanese owner Nissen Kaiun announced that it has signed a contract to build four very large ammonia carriers (VLACs) at Yangzijiang's Yangzi Mitsui joint venture division. It is the first VLAC order at any private yard in China. (The price was highly competitive, according to Chinese industry media.) These ships will be dual-fuel powered with LPG, and will deliver by 2029. Until recently, the niche VLAC segment was dominated by South Korea's Big Three yards, which have positioned themselves to capture high-value-added projects like gas carriers.
This entry into a new high-end gas segment is a change for Yangzijiang, which just began building its first LNG carriers in 2022 and secured its first very large ethane carrier (VLEC) orders earlier this year.
All of this success requires new space, and Yangzijiang is making a brick-and-mortar investment that would have been unthinkable 10 years ago. With LNG carriers and other high-value projects in mind, it has agreed to acquire a nextdoor parcel of land and invest more than $400 million in an expansion plant, including a 300,000-tonne drydock. This should add another 800,000 dwt worth of annual capacity and - according to local party secretary Zhang Changping - "break the monopoly of Japan and South Korea in the field of high-value-added ships, and achieve industrial self-reliance."
To make the most of the new space, the company says that it is planning to set up an advanced and digitalized production plant, with a 5G industrial data network.
Yangzijiang's expansion is notable for its size, but many Chinese yards are growing. New Times Shipbuilding is working on adding a new graving dock, and many yards that shut during the financial crisis have retooled and reopened, like Hengli Heavy Industries, Weihai Samjin and SPS Shipyard, among others. According to shipbroker BRS, there will be plenty of business to go around: Chinese orderbooks are largely full through 2027, and extend out through 2029.
