LONDON - Dongfang Shipbuilding Co Ltd floated on the Alternative Investment Market (AIM) of the London Stock Exchange on Thursday as the first Chinese shipbuilder.

The company also announced the start of trading in its 190 million ordinary shares. Northland Capital Partners Ltd is acting as Dongfang's nominated adviser and broker.

"Entering the AIM is a major step for Dongfang," said AKM Ismail, the company's finance director, adding that the move "differentiates ourselves from all other shipping companies".

Dongfang is expected to have a market capitalization of about 32 million pounds ($53 million) and there is still room for growth, said Ismail.

The company raised $14.3 million in a pre-flotation exercise, mostly from investors in Singapore. Dongfang has been operating as a specialized tanker builder for the last 20 years acting for a predominantly European customer base, Ismail said. "The company needs to increase its profile in order to attract the best customers, and wanted to use the customer base we already have," he added.

On its trading debut, Dongfang received "a lot of interest" and was "approached by people who were previously talking to us only as a contractor" but are now "treating us in a different way", Ismail said.

The company decided to join AIM rather than a market in Asia because most of its customers are European.

Looking ahead, Ismail explained that the company wants to consolidate all its loans into one large, syndicated loan, which would be cheaper and more efficient. Dongfang hopes to enter into talks with existing lenders, including Bank of China Ltd, he said.

A recent report from the Organization for Economic Cooperation and Development showed that, in terms of annual output, China was the world's third-largest shipbuilder in 2007, "a rank that it has held for more than a decade".

Dongfang was founded in 1986 and makes a variety of small and medium-sized vessels at its shipyards in the provinces of Anhui and Zhejiang.

One of the country's top 500 manufacturing companies, Dongfang focuses on chemical tankers, bulk freighters and multi-purpose container ships. Between 2008 and 2010, it built 12 chemical tankers, ranging from 5,000 to more than 9,000 in dead weight tonnage, and five multi-purpose container vessels.