Cosco Guangdong Shipyard cut employees against lack of new orders

Cosco Guangdong ShipyardCosco Guangdong Shipyard cut employees and reduce salaries of remaining, due to lack of new orders. The shipyard is major offshore plant of Cosco Shipyards and facing financial difficulties against the delay in offshore industry and low demand of new vessels. The company already started lay off contractors in late 2015, but in beginning of 2016 the situation is getting worse and started reducing costs by cutting employees and reducing the salaries of remaining people. Cosco Guangdong Shipyard did not received new orders in recent weeks and currently finalizing the on-hand newbuildings, leaving in danger job of hundreds of employees.

Cosco Guangdong Shipyard is currently finalizing all the jobs over 10 PSVs, 1 semi-submersible drilling rig and 1 tender barge, but facing delivery risks in some of the ships, due to liquidity problems of the purchasers and low demand of ships in offshore industry.

In May 2015, Tidewater delayed the delivery of two PSVs it ordered at Cosco Guangdong Shipyard, but also according to the contract the offshore provider can elect to take delivery of one or both of the vessels at any time prior to June 30, 2016. However, Cosco Guangdong will refund the installments paid on the PSVs, $5.4m per vessel if the delivery is not taken.