CSSC Tianjin, the Bohai Bay division of world-leading shipbuilder CSSC, is expanding significantly by acquiring a neighbouring shipyard that filed for bankruptcy in 2021.

CSSC plans to buy Tianjin Xingang Heavy Industries Shipyard parts in the Tianjin Lingang Free Zone. Tianjin Xingang closed in 2021, and CSSC Tianjin is leasing some of its space, including six plots of land and 22 buildings. The lease expires in December, and CSSC Tianjin, which has a full order book and needs space, has decided to buy the shipyard directly from its owner, Hong Kong Shipbuilding Industry Corporation.

The newly acquired assets include a 500,000-ton dry dock, a 300,000-ton dry dock, two gantry cranes, a modular factory, a paint factory, and more than a mile of additional dock for equipment and cargo handling.

CSSC Tianjin expects the additional assets to boost its annual shipbuilding capacity by another 2.4 million dwt, about 5 per cent of China’s total, which already tops the charts. The announced price is about $550 million.

Tianjin Xinjang was one of the first tenants of the Tianjin Lingang Industrial Park, the region’s largest shipbuilding and repair complex. It ran into financial difficulties in 2019 and declared bankruptcy in the fall and winter of 2021.

Separately, a different CSSC division in another province, Wuchang Shipbuilding Heavy Industry in Wuhan, is buying Wuhan Wuchuan Hangrong Heavy Industry for $134 million.

Both are related-party transactions aimed at “optimizing and adjusting capacity allocation” and boosting production, CSSC said.

Chinese shipbuilders rush to add capacity amid a flurry of order activity, with many booked through 2028.