Shipbuilding: From Europe to Japan to Korea and China, the Industry Witnessed Changes in Domination Over Several Decades
Monday, 23 January 2012 | 11:00
GIA announces the release of a comprehensive global outlook on the Shipbuilding and Repair Industry. The future shipbuilding arena is expected to be shaped largely by factors, such as cost competitiveness of shipbuilders, environmental friendliness of the products, and novelty in technology. A sudden disruption in the global trade as well as decrease in cargo volumes during 2008 and 2009, dramatically affected the global shipbuilding industry. However, the trend changed in the year 2010, when sea borne trade and cargo volumes started to increase. The number of new shipbuilding orders also improved slightly. Moreover, the number of laid up ships started to reduce, thereby showing signs of recovery from the unprecedented overcapacity situation.
The dynamics of the shipbuilding industry mirror major patterns underlining the global production, transportation and consumption of cargoes. The global Shipbuilding Industry cruised at high speeds during the period 2000 to 2007. The sailing was relatively good in the first three quarters of the year 2008 as well, before the impact of global financial crisis that rammed the global shipbuilding market in the fourth quarter of 2008. The direct effect of the crisis reflected in the order book of shipbuilders, which declined by 19% and 13% during 2009 and 2010, respectively, in terms of gross tonnage. However, with the global economy as well as trade recovering since mid 2009, new orders for shipbuilding recovered substantially in 2010. This translates to an increase in terms of number of ships in 2010, compared to 2009.
The global financial crisis that gripped the entire world had the least affect on the shipbuilding and repairing sector in the Middle Eastern countries. The Arabian Gulf, comprising of UAE (United Arab Emirates), Qatar, Saudi Arabia, and Oman, have showed great resilience to the economic slowdown. The region’s ports and yards are currently the busiest, with over 2000 vessels docked in the ports for repairing works. This great resilience pertains to the growing marine transport sector of the region, especially in Dubai and Abu Dhabi.
Over the past decade, the global shipbuilding industry has witnessed the growth of Korea and China as the leaders in the shipbuilding industry worldwide, relegating the erstwhile leader Japan to the third spot. South Korea took off the reigns from Japan during the years 1999-2000 in terms of order receipts. More recently, China surpassed Korea to become the global leader, as the country dominated the global shipbuilding industry in 2009 and 2010 in terms of gross tonnage. However, the focus on high-technology plant products and vessels, including oil and gas platforms, polar-navigating ships, very large containers ships, and eco-friendly vessels, provide Korean shipbuilders an edge over their Chinese counterparts. Despite this, certain small and medium sized shipbuilders in Korea are likely to experience difficult times ahead from their Chinese equivalents, which create the need for cooperation among domestic players and industry restructuring to win over the competition. Further, a major concern for the Chinese industry is the current slump in demand for bulk carriers, a ship type that Chinese shipyards specialize in building.
The battle between the two shipbuilding giants, Korea and China, to maintain the global dominance is well underway. Samsung Heavy Industries, a leading Korean shipbuilder, is at the forefront of this battle, filing as many as 1,100 patent applications in the year 2010. Korean Shipbuilders are ahead of their competition not just in terms of higher number of patent cases but also in terms of differentiated technological quality. One obvious factor driving shipbuilders to advance technology and eventually file for patents is to keep them ahead of competition by offering technologically advanced ships and win more orders.
A visible new trend is surfacing in the shipbuilding industry over the previous two decades, which is the emergence of shipyards in emerging nations worldwide including Brazil, India, Malaysia and Vietnam. Yet another key trend that has surfaced over the recent years is the increasing interest of shipping companies in shipbuilding activities. More and more shipping companies are investing in Shipyards worldwide in a bid to have a better control on the supply chain as well as to create better synergies.
The research report titled “Shipbuilding and Repair Industry: A Global Outlook” announced by Global Industry Analysts Inc., provides a collection of statistical anecdotes, market briefs, and concise summaries of research findings. The report offers a rudimentary overview of the industry, highlights latest trends and demand drivers, in addition to providing statistical insights. Regional markets briefly abstracted and covered include South Korea, China, Japan, India, Vietnam, Singapore, Malaysia, Australia, Europe, United States, South Africa, Bangladesh, Brazil, Greece, Taiwan, Philippines, Canada, and the Middle East. The report offers a compilation of recent mergers, acquisitions, and strategic corporate developments. Also included is an indexed, easy-to-refer, fact-finder directory listing the addresses, and contact details of companies worldwide.
Source: GIA (Global Industry Analysts Inc.)