Foreign technology fuelling China's shipbuilding dream
European marine-engine maker Wartsila is to transfer most of its propeller- and auxiliary-engine production to China from the Netherlands, resulting in the loss of a third of its 1,500 workforce in that country. The company cited a significantly lower order intake during the past year, and "fundamental changes" in the marine market.
One of the fundamental shifts it refers to is the emergence of China. Last year, China overtook South Korea as the world's biggest shipbuilder in terms of new orders – though not in overall tonnage terms – says brokers Clarksons. South Korea and Japan have been the world's top shipbuilders for many years.
Although the total number of orders in 2009 was a fraction on previous years, it illustrates a trend, with China now able to match its competitors in technology as well as cost.
In the latest milestone, China's largest super tanker, Xin Pu Yang, left for its maiden voyage in January destined for Saudi Arabia. The 333 metre-long, 60 metre-wide very large crude carrier (VLCC), built at the Longxue Shipyard, can carry up to 308,000 tonnes (over 2m barrels) of crude oil. Owned by China Shipping, it is the first locally built oil tanker to surpass the 300,000 tonnes mark.
But it is not just Chinese shippers that are buying. Listed international tanker group OSG expects to take delivery of its first China-built VLCC, Overseas Everest, early this year, after construction at Jiangnan Shipyard.
Such prestigious orders highlight China's increased technical competency, from ship design capability, through to shipbuilding efficiency. The arrival of foreign expertise is helping, pushing China's shipbuilders forward.
Lubricants specialist Castrol Marine has also identified the changes taking place in the global marine sector. It is to open its first technology centre outside Europe at Shanghai's Jinqiao Science Park this year.
Tankers, containers, bulk carriers and drilling platforms are routinely produced, with Chinese shipyards also eyeing higher-value products, such as liquefied natural gas (LNG) carriers. Domestic demand is strong. The total fleet of LNG tankers required by China is expected to hit 39 this year and rise to 65 by 2015, according to a recent report by China Daily.
The Hudong-Zhonghua yard has already produced its first LNG tankers for local shippers – the first to be built, Dapeng Seng, was delivered in 2008 – but it is keen to extend its footprint into the international market.
Qatar's new breed of very large LNG carriers (see box p23), for example, all came from rival yards in South Korea and Japan. The influx of new technology from around the world is eroding their advantage. Next time Qatar feels the need to extend its LNG fleet China will surely be ready.