China’s Jiangsu Rainbow Heavy Industries (RHI) will shut its offshore design subsidiary Shanghai Ouwei Offshore Engineering Technology Co.

Shenzhen-listed RHI announced to the stock exchange on Friday that the decision to close the Shanghai-based subsidiary is due to the sluggish offshore market following the collapse of oil prices.

“We foresee that in the foreseeable years ahead, the offshore market will continue to stay weak in line with oil prices,” RHI stated.

RHI added that the move would help the group streamline its operations and better utilise its resources.

Shanghai Ouwei Offshore Engineering Technology was established on 23 December 2014.