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Chinese ships for Chinese passengers – a threat or a promise for European shipbuilders?

October 4, 2017 Cruise No Comments Email Email

The Chinese Government believes that the development of a major and sustainable cruise industry requires not just the right balance between incoming and outgoing passengers and suitably-equipped ports and destinations but also a vibrant shipbuilding sector.http://www.stevecafeandcuisine.com/

In fact, the prospect of Chinese yards building cruise ships underpins this unprecedented level of support being given to the development of cruising by a national Government.

It is a policy given extra urgency by the way China’s existing shipbuilding industry is having to deal with global over-capacity for the building of non-passenger ships.

Ever since it became clear that the Government was committed to facilitating the development of a Chinese cruise industry, Chinese shipyards have been making overtures to their European counterparts to see if they were willing to share technology and expertise to work on cruise newbuilds together.

”Construction of cruise vessels in China has been debated now actively a couple of years. The market seems to realize slowly and little by little how challenging that shipbuilding segment is and how different it is from ”main stream” shipbuilding. The key role of the specialized European suppliers who have grown with the specialized European yards and who have been part of the industrial evolution of the segment is gradually been understood and appreciated. The issue is that a slow development may help Chinese shipyards to avoid the level of a catastrophy experienced in Japan in connection with the AIDAprima case,” commented Eero Makinen, Managing Owner, Emmanoa Oy.

These approaches have been further stimulated by the Government prioritising cruise shipbuilding within its ‘Made in China 2025’ programme to upgrade its domestic manufacturing sector. But concrete results have been slow in coming.

The first China-built international cruise ship (for Carnival Corp) was originally scheduled for delivery 2019-2022 but is now due in 2023 with a second to follow plus four more options. If those options are confirmed, this would represent a $4bn investment by Carnival and CIC Capital.

The ships will be operated specifically for the Chinese market by a new domestic brand being set up by Carnival. Although China’s CSSC yard will construct the ships, both Fincantieri and Carnival will be closely involved in the design, fitting-out and all aspects of the building process.

Fincantieri CEO Guiseppe Bono described this development as creating “a virtuous circle” between Chinese and Italian shipbuilding but the real test will come when Chinese yards develop the expertise to build ships of acceptable quality without the help of any European shipbuilders.

But, commenting on the plan for a $740m industrial park for the cruise industry in the Shanghai Baoshan Industrial Zone, the Director Lee Shuguang said: “The supplier network will decide whether China’s cruise shipbuilding industry will succeed.”

Chinese shipyards are also looking at the refit/refurbishment market with Fincantieri and Chinese repair specialist Huarun Dadong Dockyard (HRDD) forming the first international joint venture specifically designed to handle cruise ships operating in the Chinese market.

Asia’s current leading player in this sector – Singapore’s Sembcorp Marine – will expect more contracts with the expansion of the Chinese market even if its own share might reduce.

More cruise-related refit facilities within China will come with the development of specialist cruise shipbuilders but China-based Genting Hong Kong could not afford to wait and so bought four German yards to enable it to expand and refurbish its Star Cruises, Dream Cruises and Crystal Cruises fleets right now.

When looking at the differentials required for the Chinese market, Fredrik Johansson, MA – Owner / Executive Project Director for Tillberg Design commented: “It is a very inspiring and intriguing process for any designer to create a cruise ship that is tailor-made the South-East Asian source market. It’s in many parts a different setup, which needs to be considered already during the high-level GA planning, and when drafting contract specification.”

“The eating habits are different compared to most ships for the western market, the cabins and open decks may need other functions and features, and there is generally a bigger focus on family activities and gaming. We must be very humble and open-minded to fully understand the clients’ needs and priorities in South-East Asia” He continued.

Shipbuilding, design and repair are key topics being discussed at Seatrade Cruise Asia Pacific, taking place in Baoshan (Shanghai) from 1-3 November 2017 at The Delta Hotel by Marriott. Industry leaders from shipyards, ship designers and suppliers will participate in the following sessions:

  • The development of shipbuilding sector in China, and how to design to fit your customers’ needs: With the development of cruise ship construction now high on the agenda for Chinese yards, this session will look at China’s current position for cruise ship building and address the fundamentals for success in this sector.
  • Cruise Ship Repair: Asia is one of the key demand hot spots for cruise repairs and upgrading. This session will discuss where the opportunities lie, and the expertise needed to cater to cruise owners and operators.
  • Technical Supply and Procurement in Asia Pacific – The challenges and opportunities: It has been recognised that there is a need to inform Chinese suppliers on what is required to supply a cruise ship. The aim of the session is to create direct dialogue among cruise line, shipbuilder, service provider and supplier on issues including installation, and technical support.

To view the full conference programme, please go to: http://www.seatradecruiseevents.com/asia/agenda

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