Taifu Heavy Industry ventures into shipbuilding and offshore engineering

China's shipbuilding and marine engineering equipment manufacturing industry is about to welcome a new partner. Taifu Heavy Industry Group, headquartered in Hunan and with no prior experience in shipbuilding, has officially announced its entry into the marine engineering market. This inland equipment manufacturing enterprise has an ambitious goal: to become a leading marine equipment manufacturer in China and the world.

On November 19, Taifu Heavy Industry Group Co., Ltd. and GALAXIA of Brazil signed an agreement in Xiangtan, Hunan, for the cooperative construction of marine engineering equipment exceeding US\$400 million.

It is understood that the agreement signed that day stipulates that both parties will carry out marine engineering equipment construction projects, jointly serving the Brazilian oil company's offshore drilling platforms ( ship types   shipyards   sales ) providing marine engineering vessels ( ship types   shipyards   sales ) and other services, building 8 ocean engineering vessels, and signing a 16-year long-term lease agreement with Petrobras. Among the 8 engineering vessels, 40% of the raw materials and accessories will be exported from Taifu Heavy Industry to Brazil.

“This is Taifu Heavy Industry Group's first project in the Brazilian marine engineering market, and it is also Taifu's largest overseas project so far,” said Wu Chao, senior president of Taifu Heavy Industry Group, in an interview with reporters. “In the next 5-10 years, the Brazilian marine engineering equipment market will reach US\$100 billion. Taifu Heavy Industry's successful cooperation with GALAXIA has laid the foundation for Taifu's entry into the Brazilian marine engineering market, marking a milestone and showcasing Hunan's manufacturing capabilities.”

Wu Chao, senior president of Taifu Heavy Industry Group, said that Taifu has always attached great importance to the Latin American market and has increased its cooperation with Latin American companies in recent years. Currently, Taifu has established a dedicated office in Brazil to develop related businesses. In May this year, Taifu's senior management team led several delegations to Brazil for inspections and exchanges, ultimately reaching a cooperation agreement with GALAXIA, a well-known Brazilian ship leasing service company, to jointly develop the local marine engineering equipment market.

To this end, Taifu Heavy Industry has accelerated its entry into the port and high-end marine engineering equipment fields. In June 2014, it purchased 3,000 mu of land in the Tianjin Binhai Industrial Zone, planning to build the world's largest and most competitive one-stop international port, high-end marine engineering equipment exhibition, trading, service platform, and manufacturing and remanufacturing center. Taifu Heavy Industry's Tianjin Industrial Park has a 2,000-meter coastline and is expected to be completed and put into production in 2016. It will attract nearly 300 high-end equipment companies, financial, insurance, and investment institutions to settle here. The park's annual sales and transaction volume can exceed 100 billion yuan, and it can drive the joint development of hundreds of billions of industries in the Bohai Rim region.

“The Tianjin marine engineering equipment platform is a powerful attempt by Taifu to transform from a traditional manufacturing enterprise to a modern manufacturing service enterprise. This project will integrate information flow, logistics, business flow, capital flow, technology flow, after-sales service, manufacturing, and risk control, providing comprehensive services for global port and high-end marine engineering equipment transactions, exhibitions, leasing, finance, funds, and technology,” Wu Chao told reporters, adding that the characteristics of the modern heavy equipment manufacturing industry determine that it must innovate its business model and be close to the market in order to grow stronger.

“Taifu's marine engineering equipment construction project with GALAXIA of Brazil is an innovative and groundbreaking cooperation,” said Wu Chao. In the future, while fully developing the Tianjin global high-end marine engineering platform project, Taifu will consider making a strong push into the Latin American region and achieving localized production. This is of great significance for attracting Latin American companies to cooperate and further expanding the Latin American market.

GALAXIA is a well-known marine engineering equipment operator and service provider in Brazil, providing long-term marine engineering vessel services to Petrobras' offshore drilling platforms. It has more than 90 vessels of various types. GALAXIA CEO Danniel Palmieri said that as Petrobras' designated marine vessel operator, GALAXIA has rich experience in the ship operation industry and can provide high-quality services. In the future, the demand for engineering machinery, shipbuilding, and infrastructure construction in Latin American countries will be considerable, and there will be great potential for cooperation.

“Taifu's innovative system general contracting business model is refreshing, and I believe that both sides will be able to achieve mutual benefit and win-win results,” Danniel Palmieri highly recognized this model and is very optimistic about the future prospects of the cooperation between the two sides.

It is understood that Taifu Heavy Industry Group Co., Ltd. is a comprehensive group company mainly engaged in investment, heavy machinery manufacturing, and system general contracting. It has two green industrial parks, one in Hunan Jiuhua and the other in Tianjin Binhai, covering a total area of 3.5 million square meters. Since its establishment, the company's sales performance has continued to rise. In 2014, Taifu's overseas orders are expected to exceed US\$1.2 billion.