'Build at home' puzzles majors
- 2009-08-11
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Perter Clarkson - Hits: 389
Japanese and South Korean shipbuilders regard the massive newbuilding programs under way in some resources-rich countries as good chances to turn around their business slump. And yet they feel bewildered by the growing moves, particularly in Russia and Brazil, to build their ships at their own yards.
"They're an awfully tough negotiator," a Mitsubishi Heavy Industries (MHI) executive murmured with a wry grin. He was referring to a tie-up arrangement his company made with a Russian yard earlier this year in hopes of taking part in a large-scale LNG tanker newbuilding program being pushed for the country's Shtokman LNG development project.
Under the pact, also joined by Nippon Yusen Kaisha (NYK) and Mitsui & Co., the Japanese shipbuilder pledged to provide technical assistance to the Russian yard, which is keen to build the vessels on its own.
At one stage, MHI thought it had taken a major initial step toward its participation in the program, which it felt might lead up to a newbuilding deal. However, that hope proved short-lived. The game was brought back to the start later on when the Russian yard signed similar agreements one after another with two Korean shipbuilders, Samsung Heavy Industries (SHI) and Hyundai Heavy Industries (HHI).
The Russian partner in the three technical tie-up arrangements was United Industrial Corp. (OPK), a Moscow-based conglomerate which has two shipbuilders under its wing. In June this year, even before the Shtokman-related newbuilding program was formally launched, OPK announced that it was expecting to get an order for two LNG tankers. This made the future prospect of the program itself obscure.
"Because we are in a buyer's market, we got taken advantage of," SHI and HHI officials sighed at the time. HHI, rather reluctant so far to offer technical assistance to overseas yards, had to change its mind in the face of the massive newbuilding demand cropping up in Russia.
With newbuilding talks quite slow across the world, shipbuilders are paying greater attention to new projects in energy-rich countries which may give them rare chances to strike a deal. However, many of those countries are now committed to a policy to transport their resources with their own vessels, based on their shipbuilding promotion initiatives. This makes Korean and Japanese builders harder to make their choices.
Japanese and Korean shipbuilders are now cautiously assessing possible risks they may face by providing financial as well as technical and personnel assistance to foreign shipyards. A Korean yard official said, "If we make capital investment in a foreign yard and build ships there, our return will be only marginal. But at the same time, it will be very difficult to assess whether a decision to build our own yard there will ever pay."
Source: Asiasis
