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A Briefing on Chinese ShipbuildingIndustry – Now and FutureChen WenjunRongsheng Heavy IndustriesJune 6, 2013
Agenda• The Chinese Shipbuilding Industry Nowadays• Challenges and Opportunities• Strategy for the Future
020 000 00040 000 00060 000 00080 000 000100 000 000120 000 000140 000 000160 000 000180 000 00019701971197219731974197519...
CSICCSSCLarge privateowned yardsThe Chinese Shipbuilding Industry Nowadays• The shipyards in China can be divided into 3 c...
3 045 3763 103 4403 319 8403 597 3003 675 8183 890 9424 192 2274 361 1444 850 4635 176 1485 279 4785 303 4966 457 2006 932...
The Chinese Shipbuilding Industry Nowadays020 000 00040 000 00060 000 00080 000 000100 000 000120 000 0002005 2006 2007 20...
The Chinese Shipbuilding Industry NowadaysTanker11 %Bulker4 %Container <3000TEU0%Container >3000TEU18%LNG Carrier14 %LPG C...
Agenda• The Chinese Shipbuilding Industry Nowadays• Challenges and Opportunities• Strategy for the Future
Challenges and OpportunitiesChallenges Minimum Wage Standard in China (Source: Wind)Standard (RMB) Increase Rate1-year RMB...
Challenges and OpportunitiesChallengesNew regulations by international conventions• World economic development is towards ...
Challenges and OpportunitiesOpportunities010 000 00020 000 00030 000 00040 000 00050 000 00060 000 00070 000 0002006-Q1 20...
Challenges and OpportunitiesOpportunitiesLabor• China has reserved many localtalents in manufacturing, andthe labor cost i...
Challenges and OpportunitiesGoals set at the "Twelfth Five-Year Plan" for shipbuilding industry for 2015Scientific and tec...
Challenges and Opportunities5000 shipyards60% vessels builtby top 10China70 shipyards80% vessels builtby top 4South Korea•...
Agenda• The Chinese Shipbuilding Industry Nowadays• Challenges and Opportunities• Strategy for the Future
Strategy for the FuturePromoted by investment and export Promoted by technology and qualityFocus on construction capabilit...
Rongsheng has started transformation – from shipbuilder to a marine equipment providerHighlights• A Hong Kong listed compa...
Strategy for the FutureTarget vessel products – Rongsheng ShipbuildingPanamax BulkerCapesize BulkerSuezmax TankerIce-class...
Target offshore products – Rongsheng Offshore & MarineStrategy for the FutureDrilling Rigs• Jack up• Semisubmersible• Dril...
Thank YouWelcome to visit our stand at Nor-shippingStand T02-04
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Asia Days 2013 - China, rongsheng nor shipping presentation

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Asia Days 2013 - China, rongsheng nor shipping presentation

  1. 1. A Briefing on Chinese ShipbuildingIndustry – Now and FutureChen WenjunRongsheng Heavy IndustriesJune 6, 2013
  2. 2. Agenda• The Chinese Shipbuilding Industry Nowadays• Challenges and Opportunities• Strategy for the Future
  3. 3. 020 000 00040 000 00060 000 00080 000 000100 000 000120 000 000140 000 000160 000 000180 000 0001970197119721973197419751976197719781979198019811982198319841985198619871988198919901991199219931994199519961997199819992000200120022003200420052006200720082009201020112012DWTVessel Delivery HistoryChinaJapanSouth KoreaWorldThe Chinese Shipbuilding Industry Nowadays• Encouraged by the booming market in 2006-2007, the wave to construct shipyards was surged in China. Nowwith over 5000 shipyards, the country has become the largest shipbuilding base in the world.• From 1999 to 2001, vessels fabricated by China reached only 1.2 million DWT per annum. However, during theperiod of the Eleventh Five Year Plan (2006-2010), the number went up by 43% per year, which largelyexceeded its counterparts including South Korea and Japan.Source: Fairplay
  4. 4. CSICCSSCLarge privateowned yardsThe Chinese Shipbuilding Industry Nowadays• The shipyards in China can be divided into 3 categories.• Most shipyards are rather small and lack of competitiveness in theworld.ChineseShipbuildingIndustryLarge stateowned yardse.g. CSSC &CSICLarge private owned yards(mainly in Jiangsu & Zhejiang)e.g. Rongsheng, New Times, etc.Other small-to-medium yards(Dominate innumber of the 3categories)
  5. 5. 3 045 3763 103 4403 319 8403 597 3003 675 8183 890 9424 192 2274 361 1444 850 4635 176 1485 279 4785 303 4966 457 2006 932 0089 771 8639 936 87810 601 61210 758 54011 416 11111 793 449Tsuneishi ZosenAtlantico SulHudong ZhonghuaKoyo Dock K.K.Sungdong S.B.Jiangsu New YZJJinhai Heavy Ind.Hyundai MipoSTX DalianHyundai SamhoNamura ShipbuildingJapan Marine UnitedDalian ShipbuildingOshima S.B. Co.Shanghai WaigaoqiaoHyundai H.I.Jiangsu RongshengSTX S.B.Samsung H.I.DaewooOrderbook Ranking as of May 2013 (DWT)The Chinese Shipbuilding Industry Nowadays• Although China hasthe most shipyardsworldwide, the top 3 inorderbook ranking areall from South Korea.• Among top 20: 7 fromChina, 7 from SouthKorea, 5 from Japanand 1 from Brazil.• The country’sshipbuilding sector israther fragmented.ChinaSouth KoreaJapanBrazilSource: Clarkson Research
  6. 6. The Chinese Shipbuilding Industry Nowadays020 000 00040 000 00060 000 00080 000 000100 000 000120 000 0002005 2006 2007 2008 2009 2010 2011 2012 2013(As ofMay)New Contracts (DWT)China South Korea Japan0,0020 000,0040 000,0060 000,0080 000,00100 000,002005 2006 2007 2008 2009 2010 2011 2012 2013(As ofMay)New Contracts (USD Million)China South Korea Japan• Although China obtained the most new contracts per annum in the world since 2007, the gap between it andSouth Korea has become smaller and smaller in recent years.• However, in terms of contract value, South Korea was far beyond that of China.Source: Clarkson Research
  7. 7. The Chinese Shipbuilding Industry NowadaysTanker11 %Bulker4 %Container <3000TEU0%Container >3000TEU18%LNG Carrier14 %LPG Carrier2 %Offshore48 %Other3 %South Korea’s Orderbook in Value (As ofMay 2013)Tanker12 %Bulker36 %Container<3000TEU2%Container >3000TEU13%LNG Carrier3 %LPG Carrier2 %Offshore24 %Other8 %China’s Orderbook in Value (As of May 2013)• The orderbook of Chinese shipbuilding industry now is still mainly supported by numerous traditional bulkcarriers. This is in line with the extensive economic growth mode of the country.• Although Chinese shipyards have started transformation towards the high end, they still lag behind the Koreancounterparts.Source: Clarkson Research
  8. 8. Agenda• The Chinese Shipbuilding Industry Nowadays• Challenges and Opportunities• Strategy for the Future
  9. 9. Challenges and OpportunitiesChallenges Minimum Wage Standard in China (Source: Wind)Standard (RMB) Increase Rate1-year RMB rate again USD (Source: Yahoo Finance)Ever-rising cost• Suicides issues in Foxconns iPhone factories broughtwaves of pay increase.• In 2012, the minimum wage standard in china went up by11.93%.• Steel price also increased by 32% in comparison withAugust 2012.The appreciation of RMB• RMB has seen great appreciation against US Dollars inrecent years, while Korean Won and Japanese Yen alldepreciated.• The low-price advantage of Chinese shipyards will beweakened.
  10. 10. Challenges and OpportunitiesChallengesNew regulations by international conventions• World economic development is towards the direction of low carbon, energy efficiency and environmentfriendly.• New regulations including EEDI has been released.• The design and construction capability of Chinese shipyards will face even greater challenges.More fierce market competition• South Korea will keep its advantage in high-tech vessels and offshore products.• The greatly depreciated Yen strengthened competitiveness for Japanese yards in price.• Through policies of State Vessels Built by State Yards, Brazil and Russia also entered competition.
  11. 11. Challenges and OpportunitiesOpportunities010 000 00020 000 00030 000 00040 000 00050 000 00060 000 00070 000 0002006-Q1 2007-Q1 2008-Q1 2009-Q1 2010-Q1 2011-Q1 2012-Q1 2013-Q1New Contracts (DWT)Market• The shipbuilding market was recovered in 2013 with new contracts received increasing by 46.7%.• Not only traditional ship owners, but also fund companies are involved in investment: Oaktree Capital withOceanbulk, JP Morgan with Ceres, JP Morgan with Bernhard Schulte, etc.Source: Clarkson Research
  12. 12. Challenges and OpportunitiesOpportunitiesLabor• China has reserved many localtalents in manufacturing, andthe labor cost is still largelylower than South Korea andJapan even with the risingpayment.• World equipmentmanufacturing industry hasfurther shifted to China.Finance• In comparison with westerncounterparts, Chinese banksare relatively stable inoperation.• Ship owners may have moreaccess to buyer’s credit fromChinese banks.Policy• According to the "Twelfth Five-Year Plan" for ShipbuildingIndustry, China will strive tobecome a leader in globalshipbuilding by 2015.• The Chinese government willfurther consolidate and supportthe sector, which may benefitlocal yards.
  13. 13. Challenges and OpportunitiesGoals set at the "Twelfth Five-Year Plan" for shipbuilding industry for 2015Scientific and technological comprehensive strength ranks the world• To form more than 50 brand products that meet the latest international regulatory requirements and lead theinternational market.Upgrade the industrial structure• To significantly improve concentration, with top 10 shipbuilding enterprises accounting for more than 70% ofvessels built by the nation.• To take 20% of worldwide offshore market shares.Efficiency and effectiveness significantly improved• Increase industrial value added rate.• An average increase of 15% of the overall labor productivity.• Digital shipbuilding capacity to be significantly improved.
  14. 14. Challenges and Opportunities5000 shipyards60% vessels builtby top 10China70 shipyards80% vessels builtby top 4South Korea• Now the average orderbook by a single yard in China is less that 1/5 of that in a South Korea yard.• The government will further consolidate the sector by encouraging mergers and acquisitions andreorganization among Chinese shipbuilders, said by the Ministry of Industry and Information Technology.• The new policy will see more government support to large-scale shipyards like Rongsheng, while mostsmall and weak ones will be merged.
  15. 15. Agenda• The Chinese Shipbuilding Industry Nowadays• Challenges and Opportunities• Strategy for the Future
  16. 16. Strategy for the FuturePromoted by investment and export Promoted by technology and qualityFocus on construction capabilityexpansion Focus on technology improvementManufacturing oriented Service orientedLow end of value chain High end of value chainEnvironment jeopardized Environment friendly• In general, the strategy for Chinese shipbuilding industry in the future is to match the trend of Chineseeconomic development: high technology and green growth.
  17. 17. Rongsheng has started transformation – from shipbuilder to a marine equipment providerHighlights• A Hong Kong listed company• Three marine related business segments• Largest newbuilding yard• Good track record• Largest orderbook in China• Strong financial supportStrategy for the Future
  18. 18. Strategy for the FutureTarget vessel products – Rongsheng ShipbuildingPanamax BulkerCapesize BulkerSuezmax TankerIce-class Panamax Bulker7000 TEU Container VesselKamsarmax BulkerVery Large Ore CarrierPanamax TankerVLCC9400 TEU Container VesselAframax TankerNew Castlemax Bulker
  19. 19. Target offshore products – Rongsheng Offshore & MarineStrategy for the FutureDrilling Rigs• Jack up• Semisubmersible• DrillshipProduction Unit• FPSO• FSU• FSO• Shuttle TankerService Vessel• Pipe Laying Heavy-Lift VesselLNG, FSRU and FLNG in Offshore Engineering
  20. 20. Thank YouWelcome to visit our stand at Nor-shippingStand T02-04

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