Shipbuilding and Repair

Asia - The big three but plenty more


Malcolm Latarche
Malcolm Latarche
ShipInsight

14 May 2019

Asia - The big three but plenty more

For more than half a century, Asian shipbuilders have held a dominant position with Japan being the leading player until the early years of the 21st Century when South Korea took over the top spot for around 10 years before being itself overtaken by China. Between them, these three countries still account for more than three quarters of all ships built. There are several other players in the region, some of them being remarkably consistent over time because they have built ship types, such as tugs and ferries, that are less affected by the peaks and troughs of freight markets which have certainly hit the big three nations hard in the last five years.

Before taking a closer look at the main players, it is worth looking at the recent record of the region’s second and lower division shipbuilding nations.

Bangladesh

Bangladesh is probably not the first nation that comes to mind when discussing shipbuilding but it produces a number of smaller dry cargo and tankers each year averaging one vessel a month over the past four years. Between 2015 and 2017 the country produced 38 vessels totalling 77,452dwt. In 2018, 13 ships were built for 45,210dwt. The figures for 2019 through to mid-2020 would suggest that output should increase to 99 vessels totalling 319,241dwt. As always, the size of the orderbook and scheduled dates do not necessarily translate into all the ships being built.

Three builders dominate – Western Marine, Kahn Brothers and Bashundra Steel & Engineering but there are several more smaller concerns. Although most of the recent production has been for local operators, Western Marine does have a series of 20 or so 1,500dwt general cargo ships under construction for Indian owner Evergreen Shipping.

India

India’s attempts to develop its shipbuilding sector were progressing quite well until the crash of 2008. Since then the orderbook has shrunk considerably but the expertise built up in the construction of various ship types, including, bulk carriers, heavy lift vessels, ro-ros, offshore ships and general cargo ships, is still spread among numerous builders. India also has a relatively healthy naval shipbuilding sector.

Last year, Indian builders delivered just 11 vessels for 12,323dwt compared to 28 ships in the three previous years. The current orderbook comprises 67 vessels for 242,367dwt.

Through the 21st Century, many Indian yards have built ships for European owners including heavy lift roll-on vessels, such as the 2016-built RollDock Sky delivered by Larsen and Toubro, and bulkers such as the 75,000dwt Panamax series built by Pipavav for Norway’s Golden Ocean Group over several years culminating in the Golden Amber and Golden Opal delivered in 2017. This co-operation with European owners is continuing with Dutch operator Wijnne & Barends having ordered a series of 4,200dwt short sea cargo ships with Chowgule. The ships are in the operator’s Lady H class with the first vessel, Lady Hanneke, due for imminent delivery – slightly delayed from its intended Q4 2018 delivery.

Indonesia

In terms of ship numbers, Indonesia would probably qualify as quite a major player in the world shipbuilding stakes although its orderbook has thinned considerably and there are no vessels scheduled beyond the end of this year.

The vast majority of ships built in Indonesia are small general cargo/passenger ships and similar, mostly under 1,000dwt. However, there is the occasional larger vessel with product tankers up to 18,000dwt sprinkled among the deliveries. Until the crash in the offshore sector, Indonesia was producing a number of PSVs and AHTS but this business has dried up in recent years.

In the three years up to the end of 2017, Indonesian yards produced 224 vessels for 320,864dwt. Last year was quite a good year with 94 ships for 97,102dwt handed over but, as mentioned, the orderbook is less healthy in number terms consisting of 69 vessels. But that figure includes a good number of tankers and a small FPSO, boosting the deadweight to 220,290 tonnes.

Malaysia

As with Indonesia, Malaya can boast a relatively high number of ships but with few of any great size. The largest ship delivered since the beginning of 2015 was a 4,200dwt product tanker and the largest on the orderbook is an 8,000dwt ship of the same type. Malaysia is still producing a fair number of offshore vessel types such as AHTS, PSVs and an occasional accommodation vessel, along with a relatively high number of ferries of all types and landing craft, plus the ubiquitous small cargo vessels of South East Asia.

The prevalence of small vessels means that the average size constructed in Malaysia is around 1,000 tonnes. From January 2015 to December 2017, 87 vessels totalling 89,029dwt were delivered. Last year 12 ships were produced for 11,650dwt and the orderbook comprises 40 vessels totalling 45,930dwt.

Philippines

Although trailing a long way behind the big three, in terms of numbers and tonnage The Philippines is fourth in the world league of shipbuilding nations. It owes this position to being something of an overspill facility for South Korean and Japanese builders, notably Hanjin Heavy and Tsuneishi. The former has been concerned mostly with container ship construction and is capable of building some of the biggest of the type afloat and is also building LPG carriers of VLGC size.

Hanjin Heavy has been a loss-making operation for some time and, with its parent company in South Korea also in financial meltdown, was forced to call in receivers in February. A financial restructuring was agreed in March and the yard is now looking for a new owner, although there is also a proposal to turn the facility into a multi-purpose terminal with repair but no shipbuilding.

This year, Hanjin Heavy delivered the last two 114,218dwt tankers in a series to Eastern Pacific Shipping and in October last year handed over CMA CGM Louis Bleriot as the last 20,954teu boxship to the French liner operator. The demise of Hanjin Heavy will have a significant effect on Philippines standing as a shipbuilder going forward. As a consequence of its problems, a series of VLGCs that was intended to be built for Belgian operator Exmar was cancelled.

The other major builder, Tsuneishi, focuses much on bulkers from Handymax to Panamax sizes and has a healthy orderbook, although many of the ships listed as due for construction will in the first instance be owned and possibly operated by other organisations within the wider Tsuneishi Group.

There are several smaller builders also active in small ship types with the most prominent being Austal Philippines which, like its Australian parent, specialises in aluminium craft such as ferries, crew boats and civil vessels.

From 2015 through to 2017, builders in the Philippines handed over 104 vessels for 7.5Mdwt and in 2018 37 vessels for 2.8Mdwt. The orderbook is dominated by Tsuneishi bulk carriers and amounts to 54 ships for 3.08Mdwt.

Singapore

Singapore’s position as a major regional hub for shipping and centre for ship repair sometimes overshadows the state’s role in shipbuilding but it is home to several small yards – the most notable being Damen Shipyards and Penguin Shipyards – engaged in building small passenger, crew/supply and diving support vessels and a small number of larger enterprises.

The leading larger yards are Keppel Singmarine, Jurong and Sembcorp whose production varies from large vessels such as drill ships, FSOs, gas carriers to smaller ship types. Currently Sembcorp is building a trio of plug in hybrid ferries for the Norwegian operator Norled.

Each of the new 84.2m-long multi-deck, double-ended vessels will be able to accommodate up to 300 passengers and crew members and be able to carry 80 cars or a combination of 10 cars and 10 trailer trucks. The vessels will feature quick-connection shore-charging plugs, auto-mooring, autocrossing, efficient hull, propulsion and heat recovery systems. They will also include minimised hotel and auxiliary loads solutions for energy-efficient operations. Deliveries of the ferries are scheduled to take place in the last quarter of 2020.

Sembcorp’s only other vessel under construction is a small 12,000m3 LNG tanker which was ordered in February this year. It is being constructed for Indah Singa Maritime, a subsidiary of Mitsui O.S.K. Lines. The 112m long and 22m wide LNG bunker vessel will have two GTT Mark III Flex membrane tanks. It will be the largest of its kind to be built locally, in terms of size and LNG tank capacity. It is also Sembcorp Marine’s first LNG bunker vessel construction project. Jurong, which is a fully-owned subsidiary of Sembcorp, has not produced much in recent years but currently has a trio of 70,000dwt drill ships under construction.

In the three years to end of 2017, Singapore’s yards turned out 34 vessels for 31,031dwt and last year 13 ships for 101,019dwt. The forward orderbook which runs until early 2021 comprises 39 ships for 239,324dwt.

Taiwan

Much smaller than the big three but still among the leading shipbuilding nations of the world in terms of capabilities and ship sizes and types produced, Taiwan’ shipbuilding is dominated by CSBC with its two yards in Kaohsiung and Keelung. There are a few smaller builders, but their output is insignificant compared to CSBC. Container ships are the main type produced with a good sprinkling of bulk carriers, product tankers and the odd heavy lift vessel.

Recent production numbers are not prolific as the country was a victim like many others of the downturn in ship demand. From 2015 through to the end of 2017, Taiwan’s builders delivered 41 ships for 1,952,395dwt but in 2018, while the numbers were reasonable with 16 ships built, the deadweight figure was just 365,529 tonnes. The difference was mainly due to there being no large bulkers delivered in 2018.

Taiwan’s forward orderbook runs to the end of 2020 and comprises some 18 vessels for 1,379,950dwt. Included in this are a series of ten 2,800teu container ships for Yang Ming and three 208,000dwt Capes for China Steel Express.

Vietnam

In the early 21st Century, Vietnam was the new growing giant of Asian shipbuilding with the state-owned Vinashin yards attracting several orders from around the globe. The organisation also established joint ventures with Damen and Hyundai amongst others. Vinashin came to an ignominious end around 2011 when it was embroiled in a corruption scandal resulting in 2017 with former executives being sentenced to death.

A restructuring saw the organisation renamed Shipbuilding Industry Corporation and new arrangements being made with the likes of Hyundai and several smaller private yards also established. The main output consists of tankers, bulk carriers to Panamax size and general cargo ships with some offshore and passenger vessels also being built.

Today, the joint venture with Hyundai ,which is still known as Hyundai-Vinashin, is far and away the major builder in terms of both deadweight and ship numbers. The yard is also heavily engaged in repairing.

Over the three years to end of 2017, Vietnam produced 60 vessels for a total 2.3Mdwt but, owing to a lack of bulker deliveries last year when 47 vessels were delivered, the deadweight output was 779,103 tonnes. Bulkers and tankers again feature in the forward orderbook of 56 vessels and a combined deadweight of 1.4Mdwt.