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Friday, December 15, 2017

POINTS OF VIEW

China, the centre of shipping by 2015’ – this was the title of the well-attended seminar organised this week in London by Det Norske Veritas.

DNV’s China Regional Manager Andy Westwood’s overview of the shipping and shipbuilding situation in this fast-developing country showed how China’s shipbuilding orderbook has doubled since 2002 to nearly 30m dwt. China’s shipbuilders are also performing in practice, he added, with deliveries up 45% in volume and up 57% in value over 2002. China still has some catching up to do, but it is doing that fast, said Westwood.

China’s target of building 50% of all ships worldwide by 2050 looks achievable, in fact some have started saying that it will happen before then. He believes that this growth will be achieved largely by recent green-field sites, with existing yards left to fend for themselves.

He focused on China’s strengths in shipbuilding as being competitive prices, skilled labour at low cost, few disputes; and on its weaknesses as being low productivity, low automation, poor management and late delivery. A particular problem is the physical inspection of equipment, subcontractors and suppliers, which takes 6 to 8 times the manpower in China compared to Japan or South Korea. Another is castings which is ‘one area of challenge for us in China’ … the difficulty is that problems are only found out 3-4 years down the road when failures occur, he said.

He also pointed out that China has as many as 6-800 shipyards, but that many are not exporters. This means a wide spectrum of quality, with 40 yards having 80-85% of China’s shipbuilding exports. But he emphasised that the proof of the quality that China’s shipbuilders can achieve now is the fact that significant owners are ordering again and again.

Key to China’s shipbuilding growth is its productivity, he says. While the top five yards expect 13.5% annual improvement in productivity, the rest will achieve only 5-7%.