Most people's expectations are that ships are built by ship manufacturers in dockyards, and this is true in the majority of cases. However, there exists another mode of building ships in eastern
China and a
shipbuilding economy of scale has developed rapidly under this special mode in some seaside cities in Zhejiang province. The alternative way is known as the individual
shipbuilding mode.
Under this other way, all affairs - from striving for new ship orders to raising finance, from formation of temporary work teams to organization of
production - are under the control of someone with strong comprehensive capability. Without the involvement of any particular company, without any fixed working sites, the final objective of building a new ship is attained. It sounds impossible, but it's really true! Currently, the annual total carrying capacity of ships built in this fashion stands at about 500,000 tons, worth over RMB 3 billion ($380 million).
What are the features of this mode of
shipbuilding? They can be summarized as follows:
An absolute leader with outstanding comprehensive capability
Some entrepreneurs in Zhejiang have gained rich experience in
shipbuilding along with a wide public relations network. Due to their individual power, they can always get new ship orders and earn fat profits. The leader can easily gather a large group of individuals with various skills closely related to
shipbuilding and complete the building task of a new ship during a planned period. A common characteristic of these leaders is that they lack huge capital and have to hire slipways in shipyards to operate. Yet, they are able to collect lots of money in a short time for
shipbuilding purposes. In recent years, local governments have taken measures to encourage these leaders to establish their own official business. The results of such encouragement have begun to appear.
Big scale
In some seaside cities known as
shipbuilding bases in Zhejiang province - such as Zhoushan, Taizhou and Linhai - the scale of
shipbuilding under this alternative mode is remarkable. Due to complicated causes, local formal
shipbuilding mills can't always work at full capacity. This results in waste of equipment resources and decrease in productivity. Under these circumstances, some ship mills are obliged to earn money by renting coastline and shipyards. This provides good opportunities for the individual leaders. Currently, a big part of local shipyards or slipways are hired by them. In some ship mills, even over 70 percent of new ship business is not their own but belongs to the individual entrepreneurs.
Medium or small sized ships
Most new ships built under this individual
shipbuilding mode are medium and small sized. Ships with carrying capacity between 3-90,000 tons are the major types involved. Due to booming international trade market and the overseas high-level labor costs, the world
shipbuilding industry has been gradually transferring to
China from other countries. Meanwhile, local big ship mills are interested in building big ships and tend to refuse orders of medium and small sized ships. In such situations, many medium and small ship mills gain more market shares. And the individual entrepreneurs are also aiming at this market. Currently, ships with carrying capacity between 10-50 thousand tons are badly needed in the market and many orders appear for them.
According to Zhejiang's long-term
shipbuilding strategy, this seaside province has ambitions to be an important
shipbuilding base in
China in the near future. For this purpose, local government plans to invest over RMB 10 billion ($1.26 billion) in the next few years in the local
shipbuilding industry and to form about 10
shipbuilding bases. Undoubtedly, these individual business leaders will face wider opportunities and greater chances. It is possible to expect that some of them may develop into the
shipbuilding giants of the future.