# Shipbuilding takes off.!



## rushie (Jul 5, 2005)

From the Gulf Times - 

_After decades where shipbuilding was a sick industry, a rush of orders for modern vessels has booked out dockyards around the world for years ahead.
Operators who order ships today must expect to wait till 2009 or 2010 for delivery. European yards, able at last to earn profits again, have boosted their prices in recent years by about a third.
That ensures zest at the world’s biggest trade fair for suppliers to dockyards, the Shipbuilding, Machinery & Marine Technology (SMM) show, which opened in the German port city of Hamburg yesterday.
“There have never been so many ships under construction at one time as now,” said Stephen Gordon of a London firm of analysts, Clarkson Research Services. Nearly 5,400 ships are on order worldwide, including tankers, container ships, bulk carriers and gas transporters.
The hulls on order in the dockyards are equivalent to 28% of the world’s current merchant shipping fleet. That growth is being driven by a sharp upsurge in world trade, a result of globalisation.
At the SMM trade fair, the rapid expansion in Chinese shipbuilding capacity will be seen both as an opportunity for suppliers and as a source of new competition to established shipbuilders.
By the year 2020, China intends to advance from the world’s third biggest builder of ships to the first. Judging by China’s past successes, analysts have no doubt that the story will play out China’s way.
The Chinese authorities have already given planning approval for 22 new shipbuilding sites and some will be so huge that they will have no parallel in Europe.
A site occupying 8km of coast on Shanghai’s Changxing Island at the mouth of the Yangtze River will have an annual capacity of 8mn deadweight tons (DWT), according to China State Shipbuilding Corp (CSSC), the main developer of the project.
It will have seven docks that can build 300,000-DWT vessels, and shipbuilders in other nations worry that the result will be over- capacity on the world market and a return to crisis in the industry.
“The huge growth in world shipbuilding capacity means there will probably be a return to price-cutting in a few years,” predicted Juergen Kennemann, chairman of the SMM advisory council, on Monday.
Shipbuilding in Germany, the fair’s host nation, is modest by comparison, with German yards currently booked to build 230 vessels worth nearly 12bn euros ($15bn).
Werner Lundt, secretary of the Shipbuilding and Marine Technology Federation VSM, says that will keep the yards going for several years ahead: “German shipbuilding is boosting its backlog of orders.”
Back in 2001 when the crisis was in full swing, German yards took only 17 orders. Last year they took 157.
Currently the German yards are desperately short of engineers and the yards are not quite on a roll, because the rising cost of steel and components is keeping up pressure on their profits.
In Germany, the components makers, who export worldwide, are a much bigger industry than the yards themselves, outclassing the dockyards three to one in terms of employment. Some suppliers have been able to grow sales by more than 10% per year.
In a modern ship, the components cost more than the hull which the dockyard company itself builds.
Western makers of high-technology marine components say their biggest headache is copying, with Asian, especially Chinese companies often accused of product piracy. German manufacturers say more than a quarter of their exports are sold to Chinese shipyards.
At the SMM show, which runs until Friday, a record 1,669 companies from 50 nations will be showing off shipbuilding and components skills. Part of the fair will be devoted to products to outfit super- yachts, an area of shipbuilding where Germany leads the world.
Organisers say about 40,000 trade buyers and other specialists will attend the fair and associated conferences_

Just a pity there are no UK yards with a rosy future to look forward to.

Rushie


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## Pat McCardle (Jun 12, 2005)

The Wear, Tyne & Tees can only look back at what they once were. A pity but that's life & polotics!!


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## Tmac1720 (Jun 24, 2005)

As we said in Harland and Wolff "The day our ship comes in we'll be at the airport" It did and we were and now look what happened !!!


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## makko (Jul 20, 2006)

After many years Expat, went back and witnessed the last closure of Camell Laird - Their sin, to want to build ships! As I understood it, there was a lot of Euro money payed to shut the shipyards and woe betide you if you wanted to build - happened to H&W too.

And there is a lack of skills - "fitters" lapping head valves horizontally for one!

Time for a name change - remove the Great from GB.

ps Where is any moderate to heavy industry in the UK? We couldn't even get a casting made not too long ago, it was 24 weeks late on a 24 month lead time!

A Grouchy Old Man (44)
Dave R.


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## rushie (Jul 5, 2005)

Yes....no UK shipbuilders anymore....but thousands of unwanted taxi drivers out of it.

The Koreans and Chinese are so busy, and even they are finding it difficult to meet orders, that they are actually looking to take over yards abroad and "outsource" some of the work.

The Chinese are eyeing up a yard in Belgium, and rumour has it, even a small port in deepest Cornwall which is up for closure next year. It would be superb to have a small shipbuilder or repair dock in that part of the world...or even anywhere in the UK.!

Rushie


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## Thamesphil (Jul 22, 2005)

It is the Japanese and Koreans that are spreading their wings, but it isn't really ousourcing. Basically, they are ploughing cash into facilities in China and other Asian countries. Take Japan's Tsuneishi for example, they have succesful shipbuilding sites in both China and the Philippines, 100% owned. DSME (Korea) has invested in Eastern Europe (Daewoo Mangalia) where there is also cheap labour. Furthermore, many Northern European builders have bought into Eastern European yards, for example Aker (Norway) into Romania and Volharding (Netherlands) into Turkey. Others have subcontracted hulls to yards in similar locations. 

China is not outsourcing as they have plenty of land and cheap labour to go with it. As the original report says (attributed to my company, incidentally) Chinese shipbuilding is rapidly expanding with new shipbuilding sites opening up and scheduled to open in the coming years. I don't know where the report about Belgium and the U.K. originated, but I find it hard to believe as the Chinese have the forward capacity and labour to accommodate future shipbuilding demand.

Nontheless, it is sad that the U.K. is not taking a slice of this action. But other countries too are finding it tough. With the collapse of Izar last year, Spain is all but out of the shipbuilding scene and France was struggling until the Aker Group takeover of Alstom St. Nazaire and subseqent cruise orders came in. But they are not out of the woods just yet. The current boom will not last forever and it will be the European yards that suffer first with higher wages and less productivity to contend with. China will win through, but it will have casualties on the way as many of the smaller yards face closure in the wake of less demand for shipbuilding space.

Phil


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## Keltic Star (Jan 21, 2006)

rushie said:


> even a small port in deepest Cornwall which is up for closure next year. It would be superb to have a small shipbuilder or repair dock in that part of the world...or even anywhere in the UK.!
> 
> Rushie


Be interested in knowing more if you have the info. PM me if necessary.
Bob


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## Thamesphil (Jul 22, 2005)

Keltic Star,

I wouldn't get too excited. As I said in my post above, I find it hard to believe that any new shipbuilding facilities would start up in the UK. The economics just don't add up.

Phil


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## rushie (Jul 5, 2005)

Keltic Star and Phil,

The port of Par is due for closure next year due to Imerys (French) who took over English China Clay downsizing their Cornish operation on a massive scale. Big clay plants are due for closure and over 800 face redundancy.

The Cornish clay is shipped out from the ports of Par and Fowey. Par can only handle relatively small ships, whilst Fowey takes much larger vessels, and so Fowey will remain.

There have been strong rumours, both in the local, national and trade press that a Chinese company is interested in taking over Par. Obviously they will not ship clay out, as the tonnage produced will fall dramatically and just about keep Fowey going.

It has been suggested that the docks may be used as a repair facility (one of the docks would make an ideal drydock, and it is also muted that as the Chinese can build ships faster than you and me can put together a Lego set, that there may be the possibility, in the long term, of perhaps adapting facilities for building small coastal vessels, in competition with the Dutch.

Let's hope something happens.

As a kick in the teeth to the Cornish clay industry, which incidentally produces over 1 million tons per year, Imerys have actually started importing china clay to Cornwall, by ship (to Truro) from......France. Personally I think we should revamp the guns at St Mawes and Pendennis Castles at the mouth of the Fal....and scupper them.

As for outsourcing, watch out for news shortly of a Chiese concern in Belgium...repairing ships.

Rushie


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## Thamesphil (Jul 22, 2005)

Rushie,

Yes, I guessed that this would be Par. If a Chinese company does take over the port I can't believe that they will be interested in shipbuilding. This sounds like typical media speculation based upon the fact that shipbuilding is going through a boom time and that the Chinese are big players at the moment. A case of putting two and two together and making five.

As for Belgium, shipbuilding and shiprepair are rather different kettles of fish. Practically and logistically there will always be a requirement for ship repair facilites in Europe, not least because there is no sense in ballasting a European trading vessel to some far off port in Asia. Shipbuilding, however, is based on different economic principles and there is really no sense in the Chinese building ships in Europe.

Phil


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## rushie (Jul 5, 2005)

Cheers Phil,

Par may be interesting, as there is little else they could do with it.

Rushie


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