8225 October 2012

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Mission stateMent To be a world leader in ship repair, conversion, new building and offshore marine engineering, we maintain trusting relationships with our customers, employers, and partners, yielding best returns for shareholders, society and environment. Depending on our talented engineers working alongside with an efficient project management team and a highly skilled workforce, we could guarantee to deliver the projects we undertake timely and professionally.

Interview with Mr. Murat Bakkal, the Site Manager of n341

Petrobras high level executives visit CoSCo Dalian Shipyard

“ W i t h i t s f a c i l i t i e s a n d techno logy constant ly be ing updated, COSCO Guangdong Shipyard keeps improving itself. Your kind and good service really impresses me.” Mr. Murat Bakkal said in a recent interview.

Mr. Murat Bakka, a strong, agreeable and responsible man, is from the Turkish company ER Shipping. As the Site Manager, he works hard, applies strict standards and has focused on technology opt imizat ion s ince N191, the f i rst project between COSCO Guangdong and ER.

As ER’s preferred partner in China, COSCO Guangdong has cooperated with ER in the ship repair business since 1995. ER

signed 2 new-building contracts with COSCO Guangdong Shipyard for 57,000DWT bulk carriers in August, 2007; additional orders for two 57,0000DWT bulk carriers in May 2010 and one 35,300DWT Bulk Carrier in September 2011 were received at a time when the shipping market was quite depressed. So far, three vessels

have been delivered and have been trading / sailing satisfactorily. Current ly, the remaining two projects are under construction in the yard.

The site team Mr. Murat leads is cautious and conscientious. He always works overtime for the necessary items and only sleeps 4 to 5 hours a day. With work experience with Class Societies ABS and DNV, Mr. Murat possesses a we l l - rounded pro fess iona l knowledge. “When I was a kid, my father told me people should do what they favor and enjoy the process. Now, I like my job and gain lots of fun from it”, he said in explaining his hard work ethic and also expressed his satisfaction with

COSCO Guangdong’s performance.Mr. Wu Xingwu, who always

exerts his utmost effort in resolving problems, and Mr. Li Rong, a gentleman with excellent vision and keen intellect, are the two men that impress Mr. Murat the most in the Shipyard. He recalls the land here used to be covered by banana trees and praises its development, step by step into a modern Shipyard. “You are kind and always try your best to satisfy the client, especially providing us with such a good office”, Mr. Murat speaks highly of the Shipyard’s business services and thinks they are the best in China.

As a witness to the shipyard’s development, Mr. Murat a lso

thinks the shipyard still has some room for improvement in areas such as rais ing awareness of safety production, strengthening profess ional sk i l l , increas ing communication and improving the feedback system and quality control.

Ta l k i n g a b o u t t h e g r i m economic situation and depressed market wh ich has made the shipyard feel great pressure, Mr. Murat said it was a global industry problem, “during the downturn, the shipyard should pay more attention to provide diversified services and gain more returning customers and strive to reduce costs and increase efficiency further so as to prepare for an improvement in the climate”.

From October 1 to 4, the vice presidents of Brazilian oil major Petrobras, Mr. Formigli and Mr. Figueiredo, paid a visit to COSCO Dalian Shipyard. They visited the construction site of the two FPSOs, Cidade De Mangaratiba MV24 and Papa Terra P-63, which are being converted in COSCO Dalian Shipyard and were given a progress report of the two projects. Mr. Formigli and Mr. Figueiredo recognized the sterling work being carried out by COSCO Dalian Shipyard and expressed their sincere gratitude to all the cooperative partners for their hard work.

On October 3, COSCO Shipyard and EEF entered into a contract for the construction of 4 FPSO living quarters and the P75 hull repair and conversion project. The signing ceremony was held at the COSCO Shipyard Group Headquarters. The Petrobras vice presidents, Mr. Formigli and Mr. Figueiredo, the EEP president, Mr. Fernando Barbosa, the Kawasaki vice president, Mr. Kambayashi, the COSCO Shipyard Group general manager, Mr. Wang Yuhang, the COSCO Shipyard Group deputy general managers, Mr. Lu Shimin and Mr. Yan Chengxiang, and others attended the ceremony.

In the evening of October 3, the COSCO Shipyard Group held a “cooperation, development and friendship” themed grand banquet. High level executives of a number of companies, including Petrobras, Modec, BWO, QUIP and EEP, were invited. Mr. Wang Yuhang and Mr. Formigli delivered impassioned speeches. Mr. Wang Yuhang spoke on behalf of the COSCO Shipyard Group and expressed sincere gratitude to Petrobras and all cooperative partners for their consistent support and trust in the COSCO Shipyard Group, and promised to continue to provide the best service possible to Petrobras and all cooperative partners.

SEA InStAllERdelivery ceremony

O n O c t o b e r 1 9 , t h e 3 r d generation wind turbine installation jack up, N370, being built by COSCO Nantong Shipyard, was successfully delivered to its Danish owner A2SEA as part of the Dong Energy Power A/S.

The vessel was held sea trials on Sept. 25, and went through

a se r i e s o f impo r t an t t e s t s including the navigation system and propulsion system tests, DP2 dynamic positioning system test and FMEA test.

I n a d d i t i o n t o N 3 7 0 , COSCO Nantong Shipyard has independently designed, built and delivered another two second-

generation ultra-large offshore turb ine ins ta l la t ion jack up. The ultra-large offshore turbine instal lat ion jack up has been included in the 2012 National Key New Project Plan. Another jack up is now under construction in the yard.

Newbuilding2

Delivery ceremony of n341 for ER

two 57,000DWt bulk carriersnamed in CoSCo Guangdong

n385 launching Ceremony n346 launching

In the morning of September 29, the 57000DWT bulk carrier N341, built by COSCO Guangdong Shipyard for Turkish shipping company ER, was successfully named and delivered. She is the 27th bulk carrier to have been built at the Dongguan site of COSCO Guangdong Shipyard. The party secretary of the city of Dongguan, Mr. Xu Jianhua, the municipal committee member of Dongguan, Mr. Wang Jianyang, the vice mayor of Dongguan, Mr. Wu Daowen, the Commerce deputy of the Consulate of Turkey in Guangzhou, Mr. Hasan Kose, the chairman of the board of ER, Mr. Cihan Ergenc, the party secretary of COSCO

Shipyard Group, Mr. Ma Zhihong, the vice president of Class NK, Mr. S.Kakubari and others attended the ceremony.

Mr. Ma Zh ihong spoke on behalf of the G.M. of COSCO Shipyard Group, Mr. Wang Yuhang, expressing sincere gratitude to ER, the Consulate of Turkey in Guangzhou, the government of the city of Dongguan, the government of Mayong Town, Class NK and others for their trust, understanding and support in the development of COSCO Guangdong Shipyard’s ship building business, hoping that COSCO Guangdong Shipyard will keep up the good work, carry out subsequent ship

repair and new-building projects from ER with quality and make a contribution to the safe, scientific and sustainable development of the COSCO Shipyard Group and the economic and social development of Mayong Town.

ER and COSCO Guangdong Shipyard have a 17-year history of cooperation and have witnessed each other ’s growth over the years. Since COSCO Guangdong Shipyard entered the shipbuilding field five years ago, it has already undertaken the new-building of 5 vessels from ER, three of which, including N341, have already been put into operation, while the other two are still under construction.

On Sep. 27, the two 57,000DWT bulk carr iers , be ing bui l t by COSCO Guangdong Sh ipyard for SEA TRADERS were named simultaneously. The company’s on-site construction team, Mr. Liuying, the representatives from Optima Shipbrokers, and on-site surveyor from BV as well as staff from the yard, all together 70 members co-witnessed the moment.

COSCO Guangdong Shipyard has successfully delivered eight vessels for SEA TRADERS during her past five years’ cooperation with COSCO Guangdong Shipyard.

On September 30, COSCO Zhoushan Shipyard held a launching ceremony for the 3rd 57000DWT bulk carrier N385, being built for the OCEANSTAR Company. Representatives from the ship-owner and class society GL, as well as the deputy G.M. of the yard, co-witnessed the moment.

On September 19, COSCO Guangdong Sh ipyard he ld a l aunch ing ce remony fo r the 57000DWT bulk carrier being built for the Greek company DYNACOM. Leaders from the ship owner, class society and construction team co-witnessed the important moment.

Shallow water pipe lay barge naming ceremony

Delivery oftwo dumb barges

On September 28, a naming ceremony was held for the shallow water pipe lay barge, converted by COSCO Nantong Shipyard for the Dutch owner Van Oord. The ceremony saw the presence of executives of Van Oord and representatives from ABS classification society, as well as executives of the Commercial Headquarters of COSCO Shipyard Group and COSCO Nantong Shipyard.

At the ceremony, the general manager of COSCO Nantong Shipyard, Mr. Ni Tao, and the chief executive officer of Van Oord, Mr. Pieter, gave speeches. The Godmother, Mrs. Annemarie Albersen, named the pipelaying vessel ‘STINGRAY’. In his speech, Mr. Pieter spoke highly of the quality and efficiency of the conversion work accomplished by COSCO Nantong Shipyard. He

hoped that the STINGRAY project will serve as a good beginning for the partnership between Van Oord and COSCO Shipyard and that the two sides will further strengthen their cooperation in marine products to their mutual benefit.

STINGRAY is 120 meters in length and 40 meters in width and is classified by ABS. Originally it was a simple pipelay crane barge. The conversion involved the installation of the pipelayer, the construction of the living quarters and hull structure eng ineer ing. The vesse l i s capable of installing and replacing pipelines in shallow waters at the depth of up to 100 meters. The maximum diameter of the pipelines is 60 inches. The main crane has a lifting capacity of 500 tons. The living quarters can accommodate up to 300 people.

On September 18th, two dumb barges, built for the Dutch company DOCKWISE, were delivered by COSCO Zhoushan shipyard. The lady sponsor Ms. Yin named the vessels FSP 101 and FSP 102 respectively. Mr. Zeng Sheng, the G.M. of DOCKWISE China Area, Mr.

Henk van Staalduinen, the LR representative, and the G.M. of the yard, Mr. Dong Yezong, co-witnessed the delivery ceremony.

The project is the yard’s first application of an Offshore Management System and is also the first contract for delivery of vessels to the DOCKWISE.

Offshore 3

pipelaying vessel

n448 keel laying

FPSo P-62 piping system installation completion

On September 28, 2012, the keel laying ceremony for pipelaying vessel N448, designed and built by COSCO Nantong Shipyard for TL Offshore, was held in grand style. Mr. Darry, the project president of TL Offshore, Mr. Ni Tao, the general manager of COSCO Nantong, Mr. Zhu Zhihong, the party secretary of COSCO Nantong, and the project

team co-witnessed the moment.P i p e l a y i n g v e s s e l N 4 4 8

i s another advanced mar ine engineering vessel delivered by COSCO Shipyard, following the delivery of modified pipelaying vessel Caesar. N448 fully complies with the relevant requirements of ABS (OSV-2012), SPS and IMO (Safe return to port) and can

support sea rescue operations to the greatest degree. With a maximum operating water depth of 1500m, the vessel is also capable of working in shallow water at a depth of 200m with a 10-point mooring system. N448 is equipped with a DP3 dynamic positioning system and has a lifting capacity of 1300 tons.

On October 8, the installation of the piping system on FPSO P-62, undertaken by COSCO Dalian Shipyard, reached completion. Representatives of CCI and COSCO Dalian Shipyard co-witnessed the moment. The CCI representative, Mr. Leonardo, spoke highly of the implementation, progress and quality control of the project.

F P S O P - 6 2 i s t h e f i r s t independent subcontract project undertaken by COSCO Dal ian Shipyard. The project was officially launched in March 2012 and involved the installation of a total

notable honorsCOSCO Shipyard Group - “2012 TnPM Special Contribution Award”.

The Dalian Developer Project- “Youth Civilization 2011” award in Liaoning Province.

COSCO Nantong Shipyard - “2011 National Ankang Cup Enterprise”.

The QC team of COSCO Guangdong -“National Excellence QC Team”.

Matson delegation visiting CoSCo nantong Shipyard

COSCO Nantong Shipyard is currently dry-docking the Matson container vessel “MAHIMAHI” which arrived at August 6th. “MAHIMAHI” is a very special project for the shipyard because it is the 30th Matson vessel to be dry-docked at COSCO Shipyard Group and also is the 28th Matson vessel to be dry-docked at the COSCO Nantong Shipyard. On September 12th, to celebrate this important milestone, Mr. Ni Tao, the G.M. of COSCO Nantong Sh ipyard, hosted a spec ia l reception to welcome Mr. Walter Dods, Matson’s Chairman of the Board, d Mr. Matt Cox, Matson’s President& CEO, and Mr. Dave Hopper, Matson’s Senior Vice President. Mr. Ni Tao expressed his sincere appreciation for the strong supporting and excellent coopera t ion f rom MATSON during the past 11 years and is looking forward to maintaining a strong relationship in the future. Mr. Matt Cox approbated

also appreciated that so many important Matson vessels have been successful repaired and modified in the yard with high quality services, which have maintained Matson’s fleet of containerships in top operating condit ion. Both executives expressed that COSCO Nantong Shipyard and Matson should maintain and strengthen this cooperation for more mutual benefit in the future.

Mr. Scott Hauck, Matson’s Engineering Manager made a presentation to the group that highlighted the various projects over the past 11 years and the scope of work being completed on “MAHIMAHI”. Mr. Dan Moylan-Matson port engineer and Capt. Ted Bernhard of “Mahimahi”, Mr. Xing Chendong, Deputy G.M of COSCO Shipyard Group Commercial HQS and Mr. C.F. Wang, deputy G.M. of COSCO Nantong Shipyard also attended the ceremony.

of 11,000 pipelines (weighing 1 600 tons) made of different materials, including carbon steel pipes, MARILOY pipes, stainless

steel pipes, copper-nickel alloy pipes, duplex stainless steel pipes and super duplex stainless steel pipes.

the 6th CoSCo GroupDV contest lowers its curtain

On September 27, the closing and awards ceremony of the 6th COSCO Group DV contest was held in Dalian. The chairman of the board and party secretary of the COSCO Group, Mr. Wei Jiafu, deputy secretary of SASAC Mass Work Bureau, Mr. Zhang Xianghong, vice chairman of the Chinese Seamen's Union, Mr. Yao Jiuqiang, and the President of the COSCO Group's trade unions, Mr. Fu Xiangyang, as well as many others, attended the ceremony.

As one of the t rad i t iona l cultural activities of the COSCO

G roup , t h e 6 t h DV c on t e s t encourages the employees to use their video camera to record the people and events around them, to capture those precious moments in their life and work from their own point of view and to allow the efforts of the ordinary workers to be seen, thus creating an atmosphere where hard work is valued and respected. This reflects the corporate culture of the COSCO Group.

The employees of the COSCO Group actively participated in the contest. A total of 91 projects were

submitted. After several selection rounds, 15 of them made it to the final.

The outstanding culture of cooperation of the COSCO Group encourages its 130,000 employees to work together to pursue the same goal, to live together like a family and to strive as one to conquer all difficulty. That is why we believe that the COSCO Group wi l l win the combat with the global financial crisis and remain invincible in the international shipping market. Victory belongs to the COSCO people.

Ship Repair & Conversion4

heavy lift vessel repaired in CoSCo nantong

“Ginga Merlin” repaired inCoSCo lianyungang

the First Choice for owner ——the Emergency repair of "Cove Island"

Excellent service, high quality——An interview with the “GMT ASTRO” representative

PANTANAL f rom Harren & Partner Ship Management GmbH & Co KG, which is a multipurpose heavy lift vessel, arrived at COSCO Nantong Shipyard on August 10th. COSCO Nantong has cooperated many times with this German company in the past several years and the two sides still have some projects under negotiation.

The main scope of work for this vessel was to replace the hoist wire for 2 deck cranes as supplied by the owner. Since the vessel is a heavy lift vessel, the dimension of wire is very big and a much more difficult task than replacement on a normal bulk carrier.

The yard organized experienced workers to check the work onboard upon her arrival and to prepare a working plan. After acceptance by the owner, the construction team started the work immediately in order to ensure that the vessel could sail as early as possible.

Finally, the vessel sailed on time, to the satisfaction of the owner. In addition, all the tests had been properly done and approved

“Ginga Merlin”, managed by Unix Line Pte Ltd, is the fourth vessel repaired this year by COSCO Lianyungang Shipyard. She is also the eighteenth vessel repaired by the yard since 2009.

Unix Line is one of the core clients of COSCO Lianyungang. A good relationship has been established between the two sides given the yard’s strength in ship-repair. Since Unix Line’s first vessel “Ginga Falcon” was repaired in the yard in February, 2009, the performance of the yard has

deeply impressed them. On Sep. 1,the Managing Director of Unix Line, Mr. Koji Yamada, and Ship Management Dept. Director, Mr. Advind Raja, visited the shipyard and, since then, decided to have two or more vessels repaired in the closing months of this year.

For Ginga Merlin, the repair work mainly involved painting and machinery work, including hull blasting, painting and other work. The yard has always been focused on the technology, quality, schedule and time. The shipyard and ship

owner’s combined efforts ensured the vessel could sail smoothly and on time.

S i t e s u p e r i n t e n d e n t M r. Sasikumar was very sat isf ied with the vessel’s repair and fully pleased with the yard’s service and both sides’ tacit cooperation. He said that the project has further strengthened their inclination to cooperate with the yard. He also said they expect to be back for the repair of their next vessel in November 2012.

"Cove Island" is a container vessel belonging to MTM Ship management. COSCO Shanghai Shipyard finished a routine repair of the vessel in July 2012 and she sailed in good condition. Bo th t he owne r and c rew were satisfied with the repair. Unfortunately, 2 months later, in the middle of September, Cove Island had a collision in the Taiwan Strait. In this accident, the bu lbous bow area was damaged seriously.

After the incident, the owner immediately informed COSCO Shanghai of the accident and the condition of the vessel and asked for an emergency repair space in Shanghai because of the good impression the shipyard had made during the last repair. The yard accepted the repair project immediate ly and organized the technicians to assess the damage condition and prepare a draft repair scheme to send to owner for reference. At the same time, "Cove Island" left Taiwan and had birthed in Shanghai by Sep 18 for her second visit to the yard in 2012.

The ya rd i n spec ted the actual damage on the ship and discovered that almost all the damage was located in way of the double curvature bulbous bow area. This meant that it was very difficult to fabricate and fit the repair inserts, especially within the six days the owner had al lowed for the repair.

The yard arranged 2 shifts of technicians to work day and night to monitor the repair and ensure a 100% seamless connection during fitting. All the workers involved were very experienced, each one having more than 10 years experience in the ship repair industry. At the beginning the project progressed well with 90% of the damaged area removed within the first day, which gave the project team a false sense of the simplicity of the task. However, the team soon realized that the project was far from the simple one it seemed to be: due to limited working space the team could not carry out weld preparation and weld concurrently. It was a difficult choice, but f inal ly the yard decided to organize all the labor to carry out the weld preparation and grinding work first. This arrangement assured the quality of the work but meant that there was only a limited time left for the welding and completion of the repair.

Through the joint effort of the staff the repair of the bulbous bow steel work was successfully accomplished within 6 days. After the ship had left the yard, the owner's superintendent told the project team, "you impressed us again with your hard work and good quality. It's really a pleasure to cooperate with you and we will come back".

“GMT ASTRO”, which came from Korea and is owned by DORIKO LIMITED, was repaired in COSCO Guangdong shipyard. This is the first time DORIKO LIMITED and COSCO Guangdong S h i p y a r d C o . , L t d . h a v e cooperated on a project. The shipyard paid a lot of attention to “GMT ASTRO” during its routine docking repair.

Upon comple t ion o f the repair work on “GMT ASTRO”, the representative of the vessel, J.W. Jeong, did an interview for the yard, talking about the cooperative experiences between the two sides.

W h e n a s k e d a b o u t h i s impression of our shipyard, Mr. J.W. Jeong said, “compared with other shipyards I have worked with, COSCO Guangdong shipyard made a deep impression on me with its quality control and workshop management. All the repair materials and equipment

are arranged very tidily in the workshop, and the working area is cleaned every day before the workers leave.”

He said: “During the two weeks I worked here, your shipyard’s service has been very careful, especially the transport”. He thought highly of the business service of the yard and summed it up in one phrase; “Like coming back home”.

At the end of the interview, Mr. J.W. Jeong said, “If my company has ships to repair, I would like them to consider COSCO Guangdong Shipyard, because I would like to come back home.”

by the site engineer from the crane maker. Mr. Jens Pohl, the site superintendent, expressed his

appreciation and his expectation for further cooperation with COSCO Nantong shipyard.