CSIC President Li Changyin said yesterday in Beijing the State-run company plans to boost its shipbuilding output to 8 million tons a year by 2020, up from around 1 million tons in 2000.

"We aim to become the largest shipbuilder in China and one of the strongest competitors on the world's market by then," Li told a national work conference for the company, which has 160,000 staff.

The company also set a profit target of 2 billion yuan (US$240 million) by 2020, up from 47 million yuan (US$5.7 million) last year, he said.

"Military-related products will continue to be the priority in our development and we hope to become the biggest supplier to the Chinese navy," Li said.

Last year, the company built 69 vessels for civilian use with a tonnage of 1.38 million, an increase of 48 per cent from a year earlier, he said.

But he did not reveal how many vessels for military use it built last year.

As the first step towards its ambitious aim, CSIC plans to increase its shipbuilding capacity and real output to 4 million and 3 million tons respectively a year by 2005, according to Li.

The company's profits are expected to exceed 500 million yuan (US$60.2 million) by 2005, he said.

China State Shipbuilding Corp (CSSC) - the nation's other shipbuilding giant - plans to increase its capacity to 3.5 million tons and to become one of the world's top five shipbuilders by 2005.

The two companies were set up in 1999 as a result of a shake-up of China's shipbuilding industry.

CSIC forecasts that the world's demand for new vessels, expected to reach around 45 million tons a year by 2010, will provide the company with "good development opportunities."

"At the same time, we face great challenges from Japanese and South Korean rivals," Li said.

Japanese and South Korean shipbuilders have been consolidating their businesses to improve their competitiveness in recent years.

Li called for CSIC's subsidiaries to speed up their own reforms.

"We also remain far behind big international shipbuilders in technology, management and market performance," he said.

China's shipbuilding industry as a whole has been the third biggest in the world, ranked after those of South Korea and Japan, since 1995.

Li said CSIC will also put more efforts into its non-shipbuilding businesses, such as storage, port facilities and oilfield equipment, to fuel its overall expansion.

(China Daily January 17, 2003)