Cruise Shipping Miami
Asia and Europe battle for newbuild orders
Asia will prove stiff competition for European shipyards in the battle for cruise newbuild orders, according to experts in a Cruise Shipping Miami forum
ASIAN shipyards will soon be providing tough competition for European yards in the battle for cruise orders, while energy efficiency is the main priority for newbuilds, according to panellists at Cruise Shipping Miami’s newbuilding conference.
Raoul Jack, principal consultant
at marine consultancy PFJ Maritime, summed up the situation succinctly as he explained that “Europe has maintained a hold on the cruise ship market with the location of engine suppliers and its longstanding reputation with cruise companies, but Asia is rising to the challenge.” He pointed out that Mitsubishi Heavy Industries (MHI) in Japan was “extremely competitive” in price with its recent Aida Cruises two-ship construction deal, South Korea had tried to get into the
market for several years and that “China wants into the game.” There are challenges for Asia in entering this market: namely that, while Asia has an “enviable” reputation for merchant ships, cruise experience is “very scarce”. Furthermore, Europe is hard to challenge as not only are the majority of contractors used by shipyards based there, but these shipyards “have an abundance of capacity and will fight back”. Currently 22 cruise ships are on order,
with the majority in Europe and two with MHI. However, Mr Jack pointed out that possible new entrants from Asia include South Korea’s Samsung Heavy Industries and China’s Rongsheng Heavy Industries Group, which have both expressed a desire to enter the market. He added that after the Aida order “Japan won’t
CLIA’s Christine Duffy said the scale of refit projects has grown
stand still – it will also be competitive in bidding for additional vessels.” Another important factor that will boost the development of shipbuilding in Asia is that, while the majority of cruise ship parts have traditionally come from Europe, Mr Jack pointed out the new trend within cruise lines is to source spare parts from Asia, singling out Carnival Corporation and Royal Caribbean as spending a lot of time looking for part providers in China. “It becomes a bit of a spiral,” Mr Jack commented. “With spares being sourced in China, more ships cruising in Asia and with ship revitalisation taking off there, the whole contractor/spare network builds up.” He said that the building off this network was beneficial for newbuilds. Perhaps the most compelling
argument for a growth in shipbuilding in Asia is that forecast by 2020 that 10 million cruise guests will be sourced from the Asia region, equating to 65 extra vessels, each with a capacity of 3,500 berths, capacity that will not come from existing fleets as these are full. European shipyards already have orders and will only be able to fit in a few more contracts, therefore companies will have to build elsewhere to bring in the 65 extra vessels, Mr Jack argued. “If predictions go ahead, Asia
shipyards are keen to learn and catch up quickly,” he observed. NAPA Group president Juha
Heikinheimo was also of the opinion that China would enter the cruise shipbuilding market soon. He painted a scenario whereby China would start by doing a few conversions for local customers and then, once local markets were more developed, enter the newbuilding arena. “China has all the desire and capability to enter business rather fast. They have money and skills and the
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