Austal's Chinese JV books first ferry order

The 42 m high speed aluminum ferry to be built for Blue Sea Jet is the first ferry contract to be won by the Austal and Jianglong joint venture company, Aulong Shipbuilding, and the fifth new commercial ferry contract announced this year by Austal The 42 m high speed aluminum ferry to be built for Blue Sea Jet is the first ferry contract to be won by the Austal and Jianglong joint venture company, Aulong Shipbuilding, and the fifth new commercial ferry contract announced this year by Austal

AUGUST 18, 2016 — Austal Limited (ASX:ASB) reports that Aulong Shipbuilding, a joint venture company between Austal and China's Guandong Jianglong Shipbuilding has won its first ferry contract.

The A$10 million (about US$7.6 million) contract is for a 42 m high speed aluminum ferryf or Chinese mainland operator, Blue Sea Jet. The contract was awarded following a competitive evaluation based on product performance, price and commercial terms.

The ferry is based on a proven Austal design developed in Australia to world class standards. The design optimizes performance, fuel efficiency and passenger comfort and will carry up to 288 passengers on the Zhuhai – Hong Kong route, at speeds in excess of 36 knots.

Construction of the vessel is anticipated to commence in October 2016, with delivery scheduled for October 2017.

Austal has appointed an Australian General Manager to oversee the delivery of this and all subsequent vessels contracted, to ensure that Austal's quality and customer satisfaction standards are maintained by the joint venture.

Announcing the contract, Austal Chief Executive Officer David Singleton remarked "To win our first vessel to be built in China within weeks of setting up the joint venture is a great testament to Austal and our joint venture partner, Jianglong Shipbuilding. This is another export win for an Australian designed vessel in a competitive market and clearly validates both the joint venture and the decision to build in China."

"Austal has previously delivered 52 vessels to 20 customers in China, Hong Kong and Macau from our Henderson, Western Australia shipyard. Now, with an in-country solution utilizing Australian design and technology and a proven local shipbuilder, we can cost effectively pursue more opportunities and expand our market share in mainland China," added Mr. Singleton. "Set up costs and general, non-recurring expenditure required to deliver this first contract mean this vessel, whilst strategically important in a huge market, will not contribute to overall group earnings and will require some modest capital expenditure by Aulong Shipbuilding."

Established in June, Aulong Shipbuilding Co. Ltd. is a joint venture between Guangdong Jianglong Shipbuilding Company (Jianglong Shipbuilding,) with a 60% stake, and Austal, with a 40% stake.

Austal has licensed a number of its proven, commercial aluminum vessel designs for marketing throughout mainland China and construction at Jianglong Shipbuilding's established facilities in Guangdong province.

Jianglong Shipbuilding, with close to 1,000 employees across two shipyards, brings local shipbuilding infrastructure, experience and expertise to the joint venture.

Want more? Subscribe now!

News from NASDAQ