Hengli Boosts Shipbuilding Capacity with $1.5 Billion Expansion and Listing Plan

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By mid-June 2024, Hengli Heavy Industry held orders for 66 ships, totaling 8.31 million deadweight tons

China’s private petrochemicals conglomerate Hengli Group Co. Ltd. is expanding its shipbuilding capacity, with plans reportedly underway to take the business public.

On Thursday, construction began on an 11 billion yuan ($1.5 billion) project at a shipyard on Changxing Island in Dalian, in eastern China’s Shandong province. The shipyard is operated by Hengli Heavy Industry, the shipbuilding arm of Hengli Group.

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Hengli Group Co. Ltd. is expanding its shipbuilding capacity with an 11 billion yuan project and plans to go public via a Hong Kong IPO to raise about $100 million.
Hengli Heavy Industry, a subsidiary, aims to produce high-value vessels, and upon completion, will have a capacity of 1.8 million tons steel processing and 7.1 million dwt shipbuilding.
The group, which diversified from textiles to petrochemicals, holds orders for 66 ships and dominates the global market for Panamax dry bulk carriers.

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Who’s Who

Hengli Group Co. Ltd.: Hengli Group Co. Ltd. is a private Chinese petrochemicals conglomerate founded in 1994, initially as a textile manufacturer. It has grown into one of China's largest private companies with businesses in textiles, oil refining, petrochemicals, and shipbuilding. Ranked 81st among the Fortune Global 500 in 2023 with annual revenue of 811.7 billion yuan, the company aims to build complete business chains for oil refining and textile production.

Hengli Heavy Industry: Hengli Heavy Industry, part of Hengli Group, is expanding its shipbuilding operations on Changxing Island, Dalian. The company's $1.5 billion project focuses on high-value green vessels and offshore engineering equipment. With a shipbuilding capacity of 7.1 million deadweight tons, it holds orders for 66 ships. They resumed operations at a former STX Dalian shipyard and are considering a Hong Kong IPO to fund the expansion. The company aims to save costs and ensures a secure supply chain.

Hengli Heavy Industry Group Co.: Hengli Heavy Industry Group Co., a subsidiary of Hengli Group, resumed operations at a Dalian shipyard it acquired in 2022 from STX Dalian Shipbuilding. The shipyard, once the largest in northern China, had been idle for a decade. By mid-2024, Hengli Heavy Industry held orders for 66 ships totaling 8.31 million deadweight tons and had delivered two 61,000 deadweight ton dry bulk carriers, primarily focusing on dry bulk carriers, including Panamax vessels.

STX Dalian Shipbuilding Co. Ltd.: STX Dalian Shipbuilding Co. Ltd. was a wholly owned subsidiary of South Korea's STX Corp. and once operated the largest shipyard in northern China. After declaring bankruptcy, its Dalian shipyard remained idle for nearly a decade until Hengli Group acquired it for 1.73 billion yuan in 2022, marking Hengli's entry into the shipbuilding industry.

STX Corp.: STX Corp. is a South Korean commodity giant that previously owned STX Dalian Shipbuilding Co. Ltd., the largest shipyard in northern China. The shipyard had lain idle for nearly a decade following STX Corp.'s bankruptcy. In 2022, Hengli Heavy Industry acquired the site for 1.73 billion yuan to begin its shipbuilding operations.

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What Happened When

2022：: Hengli Heavy Industry acquired a Dalian shipyard from STX Dalian Shipbuilding Co. Ltd.

Early 2024：: The number of active shipyards worldwide dropped to 368, down 64% from the peak of 1,031 in 2008.

By mid-2024：: Hengli Heavy Industry held orders primarily for dry bulk carriers, including 44 Panamax vessels.

Mid-June 2024：: Hengli Heavy Industry held orders for 66 ships, totaling 8.31 million deadweight tons, with schedules booked through to 2027.

By the end of June 2024：: The total volume of orders on hand for China's shipyards rose to 171.6 million deadweight tons, up 38.6% from the previous year.

July 2024：: The second phase of Hengli Heavy Industry’s industrial park was announced, focusing on high-value-added green vessels and advanced offshore engineering equipment.