Newbuilding orders may fall 40% in China
Newbuilding orders at Chinese shipyards will slump 40% this year derailing its efforts to become the world’s number one shipbuilder, a top Asian bank claims. Dwindling demand for bulk carriers following a crash in the sector’s earnings will account for the majority of the shortfall, BOC International says.
Cancellations at China State Shipbuilding Co, which has an orderbook dominated by bulk carriers, will also hit China’s market share, according to a note from the investment bank. China’s share of the shipbuilding market slipped to 36% in the first 10 months of 2008. A year earlier its slice was at 42%. Conversely, South Korea’s portion was lifted by nearly a tenth to 46% over the same timeframe. China has stated it wants to overtake South Korea as the dominant shipbuilder by 2015.
Big three’s investment in facilities goes on
Impression of Gunsan Shipyard of Hyundai Heavy Industries Despite global economic recession, South Korea’s major shipbuilding companies are planning to continue investment in shipyard facilities in 2009 for the improvement of productivity. Large shipbuilders with three to four year long order backlogs will continue to make massive investment in facility expansion this year following last year, seeking to ‘digest’ the heavy workload more smoothly. Samsung Heavy Industries plans to invest 800bn won ($579m) in shipyard facilities this year which is the same level to a year earlier. About 250bn won will be used for facility maintenance caused by depreciation and the rest will be invested in reclamation work, workshop and ship-block factory construction, etc. for the expansion of its Geoje Shipyard. With the aim of increasing shipbuilding output to 70 ships per year, Samsung is recovering land from the sea to form a site of 280,425㎡ off Geoje Shipyard and it is also planning to construct a block factory which would produce 100,000 tons of ship blocks per year once completed. Daewoo Shipbuilding & Marine Engineering plans to invest 500bn won to raise productivity. It will replace the 450t Goliath crane at its No.2 dock of which expansion work was completed in last November with a 900t Goliath crane. It will also add one more floating dock to existing three. Further, Daewoo will increase the number of its 3,600t floating cranes to two by introducing one more to largely boost productivity. It had invested just 190bn won in 2007 but it laid out 760bn won last year in the expansion work of the No.2 dock, etc. In case of Hyundai Heavy Industries, a firm business plan has not decided yet but grand scale projects are already under way such as the construction of the Gunsan Shipyard which would have the world’s longest dock (700 meters) and the world’s largest Goliath crane (1,600t) once completed, so a considerable amount of investment in facilities is expected this year as well. It had invested as much as 1.638trn won last year. An official at shipbuilding industry said, “Big three’s order backlogs stretch over more than three years and they need to enhance productivity. Unlike other industries, shipbuilding is forecast to keep investing in facilities this year too.”
Russian shipyard developing ice-class cargoships
Russian shipyard Krasnoye Sormovo is developing a new 7,600-dwt river-sea dry cargoship. The MNP-owned shipbuilder is teaming up with sister company Volga-Caspian Design Bureau to design the vessel, which will be able to carry hazardous cargo.
The ice-class ships will be classed by the Russian Maritime Register of Shipping. They will be 141.6 metres long with a 4.75 metre draft. The loaded speed will be 10.3 knots and the vessels will accommodate 12 crew.
2009년 1월 15일 목요일
2009년 1월 13일 화요일
News / January 14, 2009
Green field shipyards in a fix
Newly-established small- and medium-sized shipbuilders in South Korea are being put into a dilemma. While the evaluation of troubled shipbuilders’ credit risk is under way led by financial industry,
s- & m-sized shipbuilders find it difficult to get back to their previous ship block manufacturing business due to the already purchased massive yard facilities and equipment. They also find it hard to continue shipbuilding business as managerial environment shows no sign of recovery. According to industry sources, the green field shipbuilders are now seeking ways to break the stalemate as it got more and more difficult to secure RG (refund guarantee) from banking agencies for the ships on their orderbook and new ship ordering activity got depressed worldwide. One option they consider the most positive is to return to ship block manufacturing business where they had enjoyed ‘good times’. Block building business would enable them to stably make profits by supplying the ship blocks to large shipbuilders as the major firms have got at least two to three year long order backlogs. Nevertheless, ‘returning’ is too late now because they have already invested a lot in shipyard facilities to make inroads into newbuilding business during the past couple of years. In order to go back to block manufacturing, they would have to dispose of those grand-scale yard facilities and equipment because building only ship blocks at a dock is absurd. But continuing shipbuilding business is far from easy as well because without RG, shipowners would not place order for newbuildings or would even cancel the orders that had already been made. Furthermore, even if the smaller shipyards lose newbuilding contracts by shipowner’s cancellation, they cannot announce the fact because it can cause a negative effect on the relationships with marine equipment suppliers and financial institutions. “Small and medium sized shipbuilders cannot get out of shipbuilding business now even if they want, nor can they stay in. They are just paying sharp attention to the policies of the government and financial industry,” said an official at shipbuilding industry.
Newly-established small- and medium-sized shipbuilders in South Korea are being put into a dilemma. While the evaluation of troubled shipbuilders’ credit risk is under way led by financial industry,
s- & m-sized shipbuilders find it difficult to get back to their previous ship block manufacturing business due to the already purchased massive yard facilities and equipment. They also find it hard to continue shipbuilding business as managerial environment shows no sign of recovery. According to industry sources, the green field shipbuilders are now seeking ways to break the stalemate as it got more and more difficult to secure RG (refund guarantee) from banking agencies for the ships on their orderbook and new ship ordering activity got depressed worldwide. One option they consider the most positive is to return to ship block manufacturing business where they had enjoyed ‘good times’. Block building business would enable them to stably make profits by supplying the ship blocks to large shipbuilders as the major firms have got at least two to three year long order backlogs. Nevertheless, ‘returning’ is too late now because they have already invested a lot in shipyard facilities to make inroads into newbuilding business during the past couple of years. In order to go back to block manufacturing, they would have to dispose of those grand-scale yard facilities and equipment because building only ship blocks at a dock is absurd. But continuing shipbuilding business is far from easy as well because without RG, shipowners would not place order for newbuildings or would even cancel the orders that had already been made. Furthermore, even if the smaller shipyards lose newbuilding contracts by shipowner’s cancellation, they cannot announce the fact because it can cause a negative effect on the relationships with marine equipment suppliers and financial institutions. “Small and medium sized shipbuilders cannot get out of shipbuilding business now even if they want, nor can they stay in. They are just paying sharp attention to the policies of the government and financial industry,” said an official at shipbuilding industry.
2009년 1월 11일 일요일
NEWS / January 12, 2009
Urging of review on restructuring
A governor in a South Korean province strongly opposed the plan of restructuring of small and medium sized shipbuilders, saying it is absolutely disadvantageous to the newly-built shipyards located at the province. On January 11th, Park Joon-yung, the governor of South Jeolla Province, situated in the southwest part of South Korea,
issued a statement on current restructuring process led by government and financial industry and said the reshuffling standards set by financial agencies are seriously unfavorable to the newly-established shipyards in the province and strongly urged reappraisal. He argued that restructuring of s- & m-sized shipbuilders should take place by analyzing the future potential of them, not by the logic of financial industry. South Jeolla Province stressed that s- & m-sized shipbuilding industry had been chosen as government’s strategic business in 2004 and it should be re-examined whether liquidating those smaller shipbuilders would be desirable at a time when they are about to start their business. Besides, the province announced that it is opposed to the ‘same standard’ restructuring on construction and shipbuilding industries as a whole because shipbuilding business provides a great deal of jobs and it is a large-scale export industry. The Korea Federation of Banks recently embarked on restructuring by setting appraisal criteria for ailing s- & m-sized shipbuilders such as ‘experience of newbuilding delivery’, ‘shipyard facilities’, ‘the rate of RG securement’, etc. The shipyards whose line of credit to a main creditor is over 5 billion won ($3.745 million) should have their credit risk evaluated. If restructuring is carried out according to the current standards, shipbuilding industry in South Jeolla Province where most of the shipbuilding companies are ‘green field’ shipyards would likely face forced restructuring. Of some 12 s- & m-sized shipbuilders in the province, some 10 companies would be categorized in the ‘restructuring group’ according to the current standards set by financial industry. Four of them have not delivered a single newbuilding yet, and seven are now constructing docks which are necessary for shipbuilding. It remains unclear, however, whether the province’s urging would be reflected in the current restructuring plan as government’s will for restructuring of shipbuilding and construction industries is so firm.
Hyundai to build new frigates
Hyundai Heavy Industries has been awarded a contract to build the lead ship of the South Korean Navys new 2,300 ton-class frigates to begin service in 2011, a military source said recently.
The Defense Acquisition Program Administration (DAPA) signed the contract worth about 140 billion won Dec. 26 with Hyundai, which had been in charge of the basic design of the state-of-the-art frigate codenamed FFX, said the source. FFX ships will replace the older Ulsan class frigates and Donghae/Pohang class corvettes by 2020, according to the Navy.The first six FFX ships are to be built by 2015 to replace the current nine Ulsan class frigates in service. The lead ship of the Ulsan class was commissioned in 1981.
Clarkson downgraded boxship market
Recently released data from Clarkson research institution revealed, despite the global financial crisis, the containership trading volume will still show growing tendency in 2009.However, it was warned that the massive volume of shipping capacity scheduled to be delivered in 2009 will cut the container ship rental price. Clarkson research institution again anticipated the growth of 2009 global container ship trading volume, and downgrade movement of the 2009 growth rate to about 6.7% when considered the global trading volume will still be affected by credit crunch. It is reported that the current biggest issue is the overcapacity from the massive order backlogs. The growth rate for the 2008 containership shipping capacity stood at 12.6% approximately, and 12.7% was expected for 2009. The difference between supply and demand is about 6% which will drop the freight rates of some major routes and container ship rental price.
A governor in a South Korean province strongly opposed the plan of restructuring of small and medium sized shipbuilders, saying it is absolutely disadvantageous to the newly-built shipyards located at the province. On January 11th, Park Joon-yung, the governor of South Jeolla Province, situated in the southwest part of South Korea,
issued a statement on current restructuring process led by government and financial industry and said the reshuffling standards set by financial agencies are seriously unfavorable to the newly-established shipyards in the province and strongly urged reappraisal. He argued that restructuring of s- & m-sized shipbuilders should take place by analyzing the future potential of them, not by the logic of financial industry. South Jeolla Province stressed that s- & m-sized shipbuilding industry had been chosen as government’s strategic business in 2004 and it should be re-examined whether liquidating those smaller shipbuilders would be desirable at a time when they are about to start their business. Besides, the province announced that it is opposed to the ‘same standard’ restructuring on construction and shipbuilding industries as a whole because shipbuilding business provides a great deal of jobs and it is a large-scale export industry. The Korea Federation of Banks recently embarked on restructuring by setting appraisal criteria for ailing s- & m-sized shipbuilders such as ‘experience of newbuilding delivery’, ‘shipyard facilities’, ‘the rate of RG securement’, etc. The shipyards whose line of credit to a main creditor is over 5 billion won ($3.745 million) should have their credit risk evaluated. If restructuring is carried out according to the current standards, shipbuilding industry in South Jeolla Province where most of the shipbuilding companies are ‘green field’ shipyards would likely face forced restructuring. Of some 12 s- & m-sized shipbuilders in the province, some 10 companies would be categorized in the ‘restructuring group’ according to the current standards set by financial industry. Four of them have not delivered a single newbuilding yet, and seven are now constructing docks which are necessary for shipbuilding. It remains unclear, however, whether the province’s urging would be reflected in the current restructuring plan as government’s will for restructuring of shipbuilding and construction industries is so firm.
Hyundai to build new frigates
Hyundai Heavy Industries has been awarded a contract to build the lead ship of the South Korean Navys new 2,300 ton-class frigates to begin service in 2011, a military source said recently.
The Defense Acquisition Program Administration (DAPA) signed the contract worth about 140 billion won Dec. 26 with Hyundai, which had been in charge of the basic design of the state-of-the-art frigate codenamed FFX, said the source. FFX ships will replace the older Ulsan class frigates and Donghae/Pohang class corvettes by 2020, according to the Navy.The first six FFX ships are to be built by 2015 to replace the current nine Ulsan class frigates in service. The lead ship of the Ulsan class was commissioned in 1981.
Clarkson downgraded boxship market
Recently released data from Clarkson research institution revealed, despite the global financial crisis, the containership trading volume will still show growing tendency in 2009.However, it was warned that the massive volume of shipping capacity scheduled to be delivered in 2009 will cut the container ship rental price. Clarkson research institution again anticipated the growth of 2009 global container ship trading volume, and downgrade movement of the 2009 growth rate to about 6.7% when considered the global trading volume will still be affected by credit crunch. It is reported that the current biggest issue is the overcapacity from the massive order backlogs. The growth rate for the 2008 containership shipping capacity stood at 12.6% approximately, and 12.7% was expected for 2009. The difference between supply and demand is about 6% which will drop the freight rates of some major routes and container ship rental price.
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