STX of the Republic of Korea (ROK), the world's sixth largest shipbuilder, begun building a shipyard on Changxing Island in northeast China's port city Dalian on Friday.

The company is investing 902 million US dollars in the shipyard which will include engine assembly plants and molding and forging facilities.

Production will begin as early as the end of 2008.

The new shipyard will boost Dalian's shipbuilding industry, Dalian Mayor Xia Deren said at Friday's ground-breaking ceremony.

Changxing Island Harbor Industrial Zone is helping revive the northeastern industrial base and will provide more business opportunities for foreign companies in the future, said Li Wancai, vice provincial governor of Liaoning Province.

Kang Duck-soo, chairman of STX Group, said the company is totally committed to the construction project, which will generate jobs in the region.

According to STX, the demand for boat blocks is increasing by 25 percent per year.

The shipyard will help the company maintain its global competitiveness.