Feature 2 | CHEMICAL & PRODUCT TANKERS Too late! the vessel sails off.


Next year’s new building scenario is


likely to see a similar sorry tale so that even if the global economy turns the corner and demand starts to increase the fear is that the maritime sector servicing the chemicals industry will remain. Responding to this depressed state of


affairs some owners have been attempting to delay the delivery of ships while others have tried to cancel their orders. One such company Glenda, a joint venture of D’Amico of Italy and Glencore of Switzerland, cancelled its third of four 51,000dwt product tankers, the first two were cancelled earlier in the year following late delivery by SLS Shipbuilding and the third was cancelled for similar reasons while the expectation is that the fourth vessel will also be cancelled. Te shipyard stands to repay in the region


of US$120 million in initial payments for the cancellation of the four vessels (if the fourth is cancelled), which had been priced at around US$48.6million each. Meanwhile, SLS which faces arbitration


over the first two Glenda ships is also in dispute with Norwegian owner Stolt-Nielsen after it too axed two 44,000dwt chemical tankers. Valued at US$58 million each, these were the third and fourth in a series of four with the first two also cancelled earlier in the year. A Stolt statement confirmed that late delivery was also behind these cancellations and that it too was in arbitration with the troubled shipbuilder. In India a further four 12,800dwt


chemical carriers were cancelled by the owners Sea Tankers Management of Norway aſter the failure of the yard, Alcock Ashdown Gujarat, to secure financial partners. Te Indian yard had already said that it


faced technical challenges in completing the order. A situation that may have helped this sector if such failings had come to light, not merely at Indian yards, but at the scores of new yards that sprang up during the new building boom in China. Some of these yards were no more than a rig on a beach or river bank. Such was the newbuilding boom that lasted up to 2008, and orders made then


44


are still being delivered this year and next year, that new ‘yards’ that amounted to little more than cranes on a beach or a river bank were encouraged to open for business. Fuelled by a global economy that was


showing year-on-year growth the industry was showered in readily available credit and offers to build vessels. Tere appeared to be no limit to growth… until the economy slammed into the buffers. In Turkey between 2003 and 2008 that growth saw the yards’ workforce grow from 10,000- 12,000 staff to over 30,000 people.


“If we tied all the ships up along side one another, you could walk for over 80km and still be crossing their decks and if all the crews came ashore at the same time they would fill Wembley Stadium.


” Not only did growth come to a sudden,


and very unexpected, stop but the global economy began to shrink and credit was no longer available as banks that had over-extended themselves in the housing market sought to consolidate


and survive. Consequently many yards in China


have disappeared, a number in Korea are under threat and Berke Cicek, the vice president of Turkey’s Cicek yard has said that it could be that only between five and 10 of the 48 yards in the Tuzla region will survive the downturn. Mr Cicek said some of Tuzla’s yards


are capable of world - class standards but others are not”. At other yards, he said, “consolidation will create opportunities”, he concluded that: “Overall, it will be good for Turkish ship building. Te challenge will come as the present shipbuiding boom subsides by early 2011 and the industry faces ‘massive’ new capacity online in Asia. Consolidation in the ship owning


division is also on the cards with Eitzen in talks with Indonesian firm, Berlian Laju Tankers. Eitzen expanded rapidly with 38 new vessels delivered since 2007 and a further 10 newbuildings still on order due to be delivered this year and next. Eitzen was building with the


expectation that demand for chemical tankers would increase substantially following new regulations requiring vegetable oils to be carried in chemical tankers from 2007 onwards. Fragmentation in the ownership of


chemical tanker operators and the laws of supply and demand also means that while such carriers as Odfell, Stolt Nielsen and Jo Tankers will ride out the storm due to the substantial contract business that they have developed. Many smaller operators that depend far more on spot cargoes will find the going much tougher. NA


The Naval Architect November 2009


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60  |  Page 61  |  Page 62  |  Page 63  |  Page 64  |  Page 65  |  Page 66  |  Page 67  |  Page 68