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INDUSTRY UPDATES

Presented by:

5 – 7 December 2018

Guangzhou, China

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News

1. Fincantieri to Develop Cruise Ship Park in China ................................................................... 2

2. Chinese Yards Look to Cruise Boom ........................................................................................ 3

3. China bulks up in cruise-ship construction .............................................................................. 4

4. Tsuneishi Eyes Construction of Cruise Ships by 2020 .......................................................... 5

INMEX China @ Guangzhou ................................................................................ 7

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1. Fincantieri to Develop Cruise Ship Park in China

By World Maritime News Posted on May 31, 2017

Image Courtesy: Fincantieri

Italian shipbuilder Fincantieri signed a letter of intent (LOI) with China State Shipbuilding Corporation (CSSC) and Shanghai’s district of Baoshan aimed at creating a cruise ship industrial park.

Under the deal signed on May 31, the three parties will engage in the creation of a hub, mainly dedicated to cruise, as well as shipbuilding and maritime activities in an effort to develop these segments whenever it is technically and economically feasible.

One of the aims of this government programme is the enhancement and specialization of the entire Baoshan region. The district is China’s largest commercial and cruise port, today representing the most developed region of the country in the cruise sector.

Namely, the district will provide financing, tax commercial and administrative benefits, land for necessary development and other resources, in the light of a possible establishment of foreign companies, introduced by the partners.

Image Courtesy: Fincantieri

Fincantieri and CSSC will promote the park in their supply chain network, and in the industry as a whole,

as a foundation for the companies which want to access to the opportunities of this project.

The signing of the LOI took place at the Baoshan District, during a workshop about the “One Belt, One

Road” initiative, and it follows the sealing which took place in February in Beijing.

During that occasion Fincantieri signed a binding agreement with CSSC and Carnival Corporation for

the construction of two cruise ships, with an option for additional four, the first units of the kind ever built

in China for the Chinese market.

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2. Chinese Yards Look to Cruise Boom By Maritime Executive Posted on September 4, 2017

Chinese shipbuilders are increasingly interested in cruise ship building, a segment that accounted for nearly half of global orders last year. China’s government has made cruise ship building a major objective in its “Made in China 2025” program, aiming to tap into the $117 billion industry with upgrades to its domestic capacity. China Daily reports Fu Chunhong, vice-chairman of the Chinese organizing committee of Marintec China, saying: "In addition to China State Shipbuilding Corporation (CSSC), quite a few other Chinese shipbuilders, such as China Shipbuilding Industry Corporation and China Merchants Heavy Industry, are proactive in cruise liner building." China's first locally-built cruise ship will be delivered from Waigaoqiao Shipbuilding, part of CSSC, in 2023. CSSC is working with Fincantieri and Lloyd’s Register on the project and has also attracted foreign suppliers such as Wärtsilä to set up joint ventures. The order is for two 5,000-passenger cruise ships and is part of a $1.5 billion deal signed in February which includes an option for four more ships. Other Chinese yards are rumored to be offering discounts of up to 30 percent to win orders. In March, China Merchants won an order for up to 10 vessels for Miami-based SunStone Ships, and Xiamen Shipbuilding Industry won an order from Finland’s Viking Line in April for a cruise ferry. Reuters reports Viking Line’s CEO Jan Hanses, saying he received interest from six Chinese yards, including Guangzhou International Shipyard, Yantai CIMC Raffles and AVIC Weihai Shipyard. Some European shipbuilders fear China could come to dominate the cruise ship market, much as it has done in cargo ships over recent decades. “This is a state objective that threatens to cause tremendous distortion in competition,” Reinhard Luken, chief executive of the German Shipbuilding and Ocean Industries Association, told Reuters last month. The Association represents German maritime firms such as shipbuilders Meyer Werft and Meyer Turku. Mitsubishi Heavy Industries stopped building cruise ships last year after its losses on two vessels for Carnival Corporation topped $2 billion.

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3. China bulks up in cruise-ship construction By The Economist Posted on June 29, 2017 Many question whether state subsidies for the business will be money well spent

AT FIRST glance the balcony-lined silhouette of the Norwegian Joy, a new cruise ship, looks like any

other Western liner moored in Shanghai. But a 333-metre-long Chinese artwork of a phoenix on its

topsides signals its distinctive status as the first ship designed especially for China’s expanding cruise

market. A pop star, Wang Leehom, christened it on June 27th.

Norwegian Joy was built by Meyer Werft in Germany, in response to a booming Chinese market for

cruises. Over the past year the number of Chinese holidaying at sea has more than doubled, to 2.1m,

according to the Cruise Lines International Association, a trade group. These numbers are likely to

encourage other lines to build ships just for China, instead of using cast-offs from America and Europe.

The Norwegian Joy has a much bigger casino than usual, to cater for the Chinese love of gambling.

The shops are also twice as large as on Norwegian Cruise Line’s other ships, notes Andy Stuart, its

CEO.

But China itself wants a slice of the cruise-ship market, which is dominated by European firms. China

State Shipbuilding Corporation, a firm that usually builds bulk carriers, tankers and the like, in February

entered a joint venture with Fincantieri, an Italian rival, to construct two cruise vessels for the Chinese

operations of Carnival, America’s largest cruise line. In March SunStone Ships, a smaller Miami-based

cruise outfit, ordered four more from China Merchants Heavy Industry, another state-owned yard near

Shanghai.

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It is a case of when, not if, Chinese yards break into the industry, admits Bernard Meyer, managing

partner of Meyer Werft. China’s government declared in a five-year plan in 2015 that it aimed to build

its own cruise ships as part of its strategy of shifting the economy towards advanced manufacturing.

It will not be easy for Chinese yards to build such ships, however. Europe’s dominance came from

developing clusters of niche suppliers, notes Martin Stopford of Clarksons, a shipbroker; these will be

hard to replicate. When Mitsubishi Heavy Industries, a Japanese conglomerate, recently tried to enter

the industry with an order worth $1.3bn from a German line for two cruise ships, it lost $2.3bn. Last

October, to stop its share price plunging further, it had to promise it would never try to build another.

Nor is it clear whether mastering cruise-ship construction will really help China with other industries.

Cruise ships may look like hotels at sea, but the materials and even the plumbing that are required to

meet maritime regulations are very different to anything of use on land. Even so, the state is ready to

hand Chinese shipbuilders the billions of dollars required. The real beneficiaries may well be Western

cruise lines, who can play the newcomers off against incumbent European suppliers.

4. Tsuneishi Eyes Construction of Cruise Ships by 2020 By World Maritime News Posted on October 9, 2017

Image Courtesy: Tsuneishi

Tsuneishi Shipbuilding is said to be planning to venture into the construction of cruise ships at its Chinese yard based in Zhejiang Province, Nikkei reports. The construction of its first cruise ship is reportedly planned for early 2020. As informed, the cruise ship would be above 200 meters in length and have the capacity for up to 800 passengers, and it would be built for an affiliate of the Tsuinesihi Holdings group. This would be the first step in luring Chinese cruise companies to order ships domestically instead of turning to European yards which have dominated the sector so far. The shipbuilder hopes to secure orders for larger ships with the capacity to accommodate several thousands of passengers. According to Nikkei, in order to prepare for the project, the company is launching activities at the Zhejiang shipyard to boost its infrastructural capacity. The move is being strategically planned as cruise shipping is experiencing an ever-growing popularity in Asia and China in particular.

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In 2017, 66 cruise ships are being deployed in Asian waters, a 53 percent growth since 2013 when only 43 ships were cruising in Asia, a new report released by the Cruise Lines International Association (CLIA) finds. A total of 3.1 million Asians took cruises in 2016, 55 percent more than in 2015, the report reads. However, the growth in popularity of the emerging market needs to be accompanied by the equivalent development of various other supporting segments of the industry, including construction of cruise ships, which is currently in its infancy in China. Development of local shipbuilding capabilities in the region has been singled out as a strategic investment opportunity and has seen various major industry players tap into the market’s potential. For example, Italian shipbuilder Fincantieri has teamed up China State Shipbuilding Corporation (CSSC) for the construction of two cruise ships, the first cruise ships to be built in China. The ships, which were announced at the beginning of this year, would be built for cruise liner giant Carnival. They will be built for the Chinese market at the SWS yard, a facility of CSSC Group, with the first delivery expected in 2023. The deal came on the back of a joint venture agreed between Fincantieri and China’s shipbuilding conglomerate CSSC aimed at developing and supporting the growth of the Chinese cruise industry.

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INMEX China @ Guangzhou

INMEX China is the largest and most established international maritime event in the South China Sea region. The 8th edition of the exhibition will feature a greater range of cutting-edge marine technologies and equipment presented by both local and international exhibitors. The biennial maritime exhibition is the ideal platform for the maritime community in Asia. EXHIBITORS’ PROFILE

Architects, Designers & Consultancy

Flow Control Propulsion Systems/Pumps & Valves

Agents, Distributors & Insurance Companies

Fuel & Lubrication Suppliers Processing & Packing Equipment Suppliers

Bankers & Finances Heavy Lift Vessel Refrigeration & Freezing Equipment

Classification Societies Instruments & Control Rope Manufacturers

Cabling Interior Suppliers Safety/Rescue & Survival/Security Equipment

Cargo Handling Systems Marine Engineering & Equipment Semi Submersibles

Cruise Building Maritime Institutions Ships, Boats, Vessel Equipment & Services

Data Acquisition, Storage and Transmission

Maritime Publications Shipbuilding

Design & Construction Marine Supply Logistics Ship Operations & Management

Dredging Equipment Maritime Services Ship Registry

Drilling & Well Control Monitoring & Instrumentation Ship Inspection & Survey

Electronics / Electrical Engineering

Navigation & Communication Technology

Ship Repair & Conversion

Environment Protection & Pollution Control

Offshore Engineering Sub-sea Design & Technology

Freight Forwarding Equipment, Accessories & Storage

Paint & Coatings Support & Support Vessels

Fire, Safety & Survival Equipment

Ports, Ports Equipment & Port Technology

To find out more about exhibiting at INMEX China, please contact: Ms. Violet Yong Exhibition Director Tel: +65 6411 7709 Email: violet.yong@informa.com

Ms. Eileen Quek Assistant Project Manager Tel: +65 6411 7721 Email: eileen.quek@informa.com