Worldyards – Monthly Newsletter Worldyards – Monthly Newsletter ... Hyundai Heavy 2011 TMT 142* 20-Aug-07 Aframax uncoated 4 x 110,000 DWT Hyundai Heavy …

August 2007

Worldyards – Monthly Newsletter

This is a monthly publication of Worldyards which summarizes developments in the newbuilding market in the past month with a special focus on shipbuilders. We start with a summary table, followed by shipbuilder developments and then conclude by giving a detailed list of new orders and resale transactions. For latest figures on orderbook ratio, age profile and delivery schedule of various segments and other vital statistics, log onto our website (www.worldyards.com).

Summary of Orders and Investments, August 2007

New Contracts Investment (USD Million) Bulkers 10,669,300 DWT (+56%) 5,820.60 (+36%)

Containers 640,952 TEU (+45%) 8,514.44 (+39%) Combination Carriers 951,000 DWT (n/a) 426 (n/a)

Crude Tanker 1,524,000 DWT (+182%) 806 (+153%) Product Tanker 894,000 DWT (+1,587%) 695.20 (+824%)

Product/Chemical 132,900 DWT (-64%) 239.50 (-40%) Chemical Tanker 19,500 DWT (-98%) 36 (-96%) Vehicles Carrier

(Specialised Cargo II) 7,900 No of Cars (n/a) 90 (n/a)

Notes: (1) %: It is the percentage change over last month. (2) Percentage numbers are rounded up.

(3) There were no Combination Carriers and Vehicles Carrier (Specialised Cargo II) recorded in July 2007, therefore no comparison percentage to current month.

(4) Please refer to Worldyards segment definitions listed in the Member site for detailed explanations for the segments.

August 2007

www.worldyards.com • (+65) 6222-9491 • [email protected]

2

Shipbuilding Output Forecast

Worldyards output potential estimate is not a result of mathematical forecast, but rather result of a sum-of-all-parts approach estimating micro developments in each and every shipbuilder. First, Worldyards assumes a baseline organic productivity growth of 5% for each shipbuilder, annually. The growth rate is then adjusted upwards or downwards to allow for other productivity developments (we call them "capacity-significant events”), caused by events such as new production methods/processes, introduction of facilities/equipment, closure of facilities, shifting of strategic focus from merchant shipbuilding to other activities, etc. Worldyards evaluates each event and assess their impact which will be added on or subtracted from the 5% baseline growth rate for each shipbuilder. The Worldwide estimate is just a summation of resultant estimates of individual builders. Each and every of these capacity-significant events can be viewed under the "Background" box of each shipbuilders in the member site.

This “theoretical capacity estimate” presented here is intended to be used to analyse output potential and is different from "real output" which is the factual orderbook. Factual orderbook can be different from output potential as it is affected by a host of factors such as production lead time, availability of main engines etc. Also, "available capacity" would appear much higher due to the fact that the Japanese orderbook is significantly under-reported, a point that has been a point of complaint by other shipbuilding nations. We hope to come back with a solution to resolve the under-reporting of Japanese orderbook shortly.

Finally, Worldyards only publishes estimated output on cgt basis rather than dwt.

August 2007


3

New Orders

The order is defined as a confirmed signed contract in Worldyards. Every effort has been made to confirm the order. LOIs are excluded. Options declared are treated as new orders.

Sub-

Segment Capacity Shipbuilder Delivery Beneficial Owner Price (US $ M) Date

Bulker 6 x 8,100 DWT

Yangzijiang Shipbuilding 2010 Consorzio Armatori

Navi Dry 15 30-Aug-07

Handysize

bulker 21,200 DWT

Bulyard Shipbuilding Dec-12 Navigation Maritime

Bulgare 25* 16-Aug-07

Handysize bulker

2 x 33,300 DWT

Orient Shipyard H2-2010 Chokang Shipping 34.2* 14-Aug-07

Handysize bulker

3 x 33,300 DWT

Orient Shipyard 2009/10 Bongshin 34.2 09-Aug-07

Handysize bulker

5 x 33,300 DWT

Orient Shipyard 2009/10 Jin Yang Shippinng 34.2* 14-Aug-07

Handysize bulker

4 x 33,500 DWT

Zhejiang Jingang 2009/10 Marine Management 29.6 02-Aug-07

Handysize bulker

4 x 34,000 DWT

Nokbong Shipbuilding 2010 European owner 34.5 31-Aug-07

Handysize bulker

10 x 37,300 DWT

Shandong Huahai 2010/11 Duferco Group 32 28-Aug-07

Supramax

bulker 2 x 55,600

DWT Bulyard

Shipbuilding 2011/12 Navigation Maritime Bulgare 38* 16-Aug-07

Supramax bulker

4 x 57,000 DWT

Qingshan Shipyard 2010 Far-Eastern Shipping 36 01-Aug-07

Supramax bulker

6 x 57,000 DWT

Jiangdong Shipyard 2010/11 n/a 46.28 22-Aug-07

Supramax bulker

8 x 57,000 DWT Cosco Shipyard 2010 n/a 39* 21-Aug-07

Supramax bulker

6 x 57,300 DWT

Bohai Shipbuilding

2009/10/ 11

CSC Phoenix (CSC Group) 36 21-Aug-07

Panamax

bulker 12 x 75,000

DWT Pipavav Shipyard 2010/11 Avgi Maritime

Services 42* 31-Aug-07

Panamax bulker

5 x 80,300 DWT Fujian Guanhai 2009/10/

11 Fujian Guanhai

Shipping 43* 28-Aug-07

Panamax bulker

81,000 DWT

STX Shipbuilding Dec-10 Interglobal Marine

Agencies 56* 23-Aug-07

Panamax bulker

81,000 DWT

STX Shipbuilding Jan-11 Diler Denizcilik 56* 23-Aug-07

Panamax bulker

2 x 81,000 DWT

STX Shipbuilding 2010 Alabanda Denizcilik 56* 12-Aug-07

Panamax bulker

4 x 81,000 DWT

STX Shipbuilding 2010 Arcadia

Shipmanagement 56* 23-Aug-07

Post-panamax

bulker 2 x 92,300

DWT Yangzijiang Shipbuilding 2010/11 Giuseppe Bottiglieri 50* 30-Aug-07

Post-panamax bulker

4 x 92,500 DWT

Zhejiang Yangfan 2009/10 Zhejiang Haixi

Shipping 47 22-Aug-07

Handy

Capesize bulker

7 x 115,000 DWT

Jiangnan Changxing

Heavy 2010/11 China International

Trust & Investment 58* 07-Aug-07

Capesize bulker

176,000 DWT

Zhoushan Jinhaiwan 2010 Golden Ocean Group

Limited 78 21-Aug-07

Capesize bulker

2 x 176,000 DWT

Zhoushan Jinhaiwan 2011 Nicholas G

Moundreas Shipping 78 03-Aug-07

August 2007


4

Sub-Segment Capacity Shipbuilder Delivery Beneficial Owner Price

(US $ M) Date

Capesize bulker

2 x 176,000 DWT

Jiangsu Rongsheng 2009/10 GEDEN Lines 78* 06-Aug-07

Capesize bulker

2 x 176,000 DWT New Times 2010 STX Pan Ocean 76* 13-Aug-07

Capesize bulker

2 x 176,000 DWT

Zhoushan Jinhaiwan 2010

Zhejiang Ocean Shipping Company (COSCO Zhejiang)

72.5* 22-Aug-07

Capesize bulker

4 x 176,000 DWT New Times 2010/11 STX Pan Ocean 76 27-Aug-07

Capesize bulker

177,000 DWT

Jiangnan Changxing

Shipbuilding Jun-10 Gleamray Maritime 81* 28-Aug-07

Capesize bulker

2 x 177,000 DWT

Jiangnan Changxing

Shipbuilding 2009 Foremost Maritime 81* 24-Aug-07

Capesize bulker

2 x 180,000 DWT

Daehan Shipbuilding 2010 Meandros Lines 88* 23-Aug-07

Capesize bulker

2 x 180,000 DWT Qingdao Beihai 2010/11 China Merchants

Steam Navigation 75.6* 29-Aug-07

Capesize bulker

3 x 180,000 DWT

Dalian Shipbuilding 2009/11 China Merchants

Steam Navigation 75.6 29-Aug-07

Capesize bulker

4 x 180,000 DWT Odense Steel 2009 Carras (Hellas) 108 30-Aug-07

Container ship 3 x 2,800 TEU

Guangzhou Wenchong Shipyard

2011 Ownership Emissionshaus 51.8 26-Aug-07


Guangzhou Wenchong Shipyard

2011/12 Gebruder Winter 51.8 26-Aug-07

Container ship 6,500 TEU Hyundai Heavy Mar-11 Rickmers Reederei 112* 17-Aug-07


STX Shipbuilding 2010/11 Niki Shipping 159.2 10-Aug-07


Daewoo Shipbuilding 2011 C-P Offen 168* 15-Aug-07


Samsung Heavy 2011/12 Peter Doehle 169* 30-Aug-07

Container ship 4 x 13,092 TEU Hyundai Heavy 2010 Rickmers Reederei 177.5 13-Aug-07

Container ship 8 x 13,092 TEU Hyundai Heavy 2011 Seaspan 165 03-Aug-07


Samsung Heavy

2010/11/ 12

China Shipping Container Lines 169.98 08-Aug-07

MPP 2 x 9,000 DWT

Sanuki Shipbuilding 2008 Shinwa Kaiun Kaisha 14.5* 15-Aug-07

LNG 4 x 12,000 CBM

Dincheng Jiangsu

2008/09/ 10 Norgas Carriers 40* 16-Aug-07

VLOO 3 x 317,000 DWT Hyundai Heavy 2011 TMT 142* 20-Aug-07

Aframax uncoated

4 x 110,000 DWT Hyundai Heavy 2010/11 The Shipping

Corporation of India 70* 13-Aug-07

VLCC 295,000 DWT

Dalian Shipbuilding Jun-09 China Merchants

Steam Navigation 120* 29-Aug-07

LR I 4 x 73,500 DWT

SPP Shipbuilding 2010/11 Overseas Shipholding

Group 60.8* 30-Aug-07

August 2007


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(US $ M) Date

LR I 4 x 74,500 DWT

STX Shipbuilding 2009 Prime Marine

Management 63* 14-Aug-07

LR II 2 x 95,000 DWT Hyundai Heavy 2010/11 The Shipping

Corporation of India 66* 13-Aug-07

LR II 114,000 DWT New Times Apr-11 Ionia Management 68 08-Aug-07

Product/ Chemical

tanker

2 x 8,700 DWT

Kwangsung Shipbuilding 2008/09 Daewoo Logistics 19* 15-Aug-07

Product/ Chemical

tanker

3 x 16,500 DWT

Jiangzhou Union 2010 Intrepid Shipping 28.5* 07-Aug-07

Product/ Chemical

tanker

4 x 16,500 DWT

Jiangzhou Union 2009 Sloman Neptun 28.5* 07-Aug-07

Chemical

tanker 3 x 6,500

DWT Rushan

Shipbuilding 2010 Erria Tankers 12* 06-Aug-07

Asphalt/ Bitumen tanker

2 x 5,900 DWT

Xinshun Shipyard 2010

Stolt-Nielsen Transportation

Group 14.5* 16-Aug-07

PCTC 7,900 Units Hyundai Heavy Apr-11 n/a 90* 20-Aug-07

RoRo Cargo 6 x 3,200 Lane Metres

Jinling Shipyard

2010/11/ 12 Finnlines 54.60* 24-Aug-07

Ro-Pax 2 x 330 No. of pax

Samsung Heavy 2011 Stena 145.44 23-Aug-07

Shuttle tanker 2 x 109,000 DWT

Samsung Heavy 2011 Teekay Shipping 123* 03-Aug-07

* WY Estimates

August 2007


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RESALE

Sub-Segment Capacity Shipbuilder Seller Buyer Price

(US $ M) Date

Handysize bulker

18,800 DWT

Yamanishi Shipyard

Sidermar Servizi

Accessori Greek buyer 30 17-Aug-07

Supramax

bulker 6 x 57,700

DWT STX Dalian Parakou Shipping Korea Line 44.5 24-Aug-07


Kouan Shipbuilding Rehder C Vroon BV n/a 21-Aug-07

Aframax uncoated

114,800 DWT

Samsung Heavy

GEDEN Lines Minerva Marine 73.73 24-Aug-07

Newly Surfaced Existing Orders

Orders that were placed before the publishing date of our last issue, but only became known to, or were confirmed by Worldyards, after we published our last issue. Some are net additions in number of orders, for instance we only knew of 2 vessels but it has now emerged that there were total 4.

Sub-

Segment Capacity Shipbuilder Delivery Beneficial Owner Price (US $ M) Date

Supramax bulker

2 x 54,000 DWT ABG Shipyard 2010 Essar Shipping 34.75 15-Mar-07

Supramax bulker

2 x 57,000 DWT Taizhou Sanfu 2009 Thenamaris 38.5* n/a

Supramax bulker

2 x 57,000 DWT Taizhou Sanfu 2009 Cido Shipping 38.5* n/a

Supramax bulker

4 x 57,000 DWT

Liaoning Marine & Offshore

2009/10 n/a 38.5 16-Apr-07

Supramax bulker

4 x 57,000 DWT

Zhejiang Jinmao 2009 n/a 38.5* n/a

Supramax bulker

4 x 57,000 DWT Cosco Shipyard 2008/09 Goldenport

Shipmanagement 37.5 19-Jun-07

Panamax

bulker 4 x 75,000

DWT Hyundai Heavy n/a The Shipping

Corporation of India 47* n/a

Post-panamax bulker

2 x 87,500 DWT

Hudong-Zhonghua

Shipbuilding 2010 Goulandris Brothers 50 16-Jul-07

Post-panamax bulker

88,000 DWT

Imabari Shipbuilding Apr-08 Kawasaki Kisen

Kaisha 40* 02-Jan-06

August 2007


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(US $ M) Date

Post-panamax bulker

7 x 92,300 DWT

Yangzijiang Shipbuilding 2009/10 d’Amato di

Navigazione 50* n/a

Capesize bulker

2 x 170,000 DWT

Daehan Shipbuilding 2010 Keoyang Shipping 73* n/a

Capesize bulker

176,000 DWT New Times H2-2011 Blumenthal JMK 69.8* n/a

Capesize bulker

2 x 177,000 DWT

Jiangnan Changxing

Shipbuilding 2010 Remi Maritime 81* 30-Jul-07

Capesize bulker

2 x 177,000 DWT

Jiangnan Changxing

Shipbuilding 2010 Minerva Marine 81* 30-Jul-07


Deniz Endustrisi 2008 Bayraktar Gemi 32* 30-Jan-06

Container ship 3 x 9,300 TEU IHI Marine 2010/11 Nippon Yusen Kaisha 135* 30-Jul-07

MPP 8 x 6,500 DWT


n/a Arminius 10.5* 16-Sep-05

MPP 6,800 DWT Liaoning Marine & Offshore

Dec-07 Seiyo Fortune Maritime 11* n/a

MPP 2 x 9,000 DWT

Yichang Shipyard 2007/08 Shenzhen Shun 13.5* 04-Jul-06

MPP 3 x 12,000 DWT


2007 MK Ship Management 22* n/a

MPP 4 x 17,300 DWT

Hudong-Zhonghua

Shipbuilding 2007/08 Wagenborg Shipping 27* 05-Nov-04

MPP 8 x 17,300 DWT

Hudong-Zhonghua

Shipbuilding 2010/11 Wagenborg Shipping 30* 15-Dec-06

Suezmax 2 x 156,000 DWT

Jiangsu Rongsheng n/a GEDEN Lines 74* 30-Jul-07

Suezmax 3 x 159,200 DWT Hyundai Heavy 2011 Marmaras Navigation 86* 30-Jul-07

Product/ Chemical

tanker

2 x 5,600 DWT Celik Tekne 2007/08 KGS Maritime 7.5* 30-Jun-05

Product/ Chemical

tanker

3 x 5,600 DWT Celik Tekne 2008/09 KGS Maritime 7.5* 30-Jan-06

Product/ Chemical

tanker

2 x 16,500 DWT

Jiangzhou Union 2010 Bernhard Schulte 30* 15-Dec-06

Product/ Chemical

tanker

2 x 16,500 DWT

Jiangzhou Union 2010/11 Bernhard Schulte 30* 15-Feb-07

Product/ Chemical

tanker

4 x 16,500 DWT

Zhejiang Jingang 2009/10 n/a 29* n/a

Chemical

tanker 3 x 19,900

DWT Shin

Kurushima 2008/09 n/a 36* n/a

Chemical tanker

30,000 DWT

Shin Kurushima Oct-09 Iino Kaiun 40* n/a

August 2007


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(US $ M) Date

Chemical tanker

30,000 DWT

Shin Kurushima Dec-09 Tokyo Marine 40* n/a

Chemical tanker

30,000 DWT

Shin Kurushima Aug-10 n/a 41* n/a

PCTC 6,100 Units Shin Kurushima Nov-07 n/a 73* n/a

Pax Ferry 2 x 1,600 No. of pax

Huanghai Shipyard 2010 Shandong Bohai

Ferry 67.5* 15-Jul-07

* WY Estimates ·Please check our site for details of removed confirmed orders - orders which have become invalid for whatever reasons.

August 2007


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Shipbuilder Developments

30-Aug-2007 : Jiangdong sets 50 days launch record : The Beluga Fraternity launched by Jiangdong Shipyard on August 18 as the 8th ship of this series built for Beluga, took a mere 50 days on the slipway. This allowed the shipyard to adjust its target from five launches plus five deliveries last year to six launches plus six deliveries for 2007. As the block assembly period took place during the height of summer, the shipyard arranged for the workers to work both in the morning and then also at night when it was cooler. Vessel details are: LOA 138 m; Width 21 m; Depth 11 m. Design Draft: 7.5 m. Engine Power: 5,400kw.Two 180t cranes. 30-Aug-2007 : COSCO Guangzhou Shipyard start newbuilding business : On 21 Aug 2007, COSCO Guangzhou Shipyard signed eight 57,000 dwt bulk-carrier newbuilding contracts with Golden Union (Greece), ER Denizcilik (Turkey) and Evkipos Ship Management (Greece). All eight ships will be delivered by 2010 and these are the first newbuilding projects to be built by COSCO Guangzhou Shipyard. Mr. Wang Xingru, the President of COSCO Shipyard Group, said “COSCO Guangzhou Shipyard is confident about delivering the bulk carriers on-time, on-budget." The shipyard is intending to use the 80,000 dwt floating dock for construction, but the 150,000 dwt floating dock could also be used. The blocks are to be fabricated on land and then launched by air bag and go to dock for assembling. 27-Aug-2007 : President Musharraf backs strengthening shipbuilding : On Aug 27, Pakistan President General Pervez Musharraf chaired a meeting of Karachi Shipyard and Engineering Works (KSEW) to review the shipbuilding industry, which was also attended by Prime Minister Shaukat Aziz. Vice Admiral Iftikhar Rao, Managing Director of KSEW, in his presentation informed President Musharraf that shipbuilding is an attractive industry for developing nations because shipyards are labour intensive and employ a large number of workers, including a wide range of ancillary industries. The participants of the meeting were briefed that since 2003, the number of orders had been doubled, from 115,500 dwt to 300,000 dwt and the total anticipated receipts were Rs965m. President Musharraf remarked that Pakistan should concentrate not only on ship repair but also shipbuilding and needed shipyards with bigger docks to accommodate larger vessels. The President approved the concept and the formation of a steering committee for implementation of the project. 27-Aug-2007 : Aker Yards may bring Kleven Maritime to court : Norwegian Aker Yards is considering legal action against Kleven Maritime, which sold the shipyard Kleven Floro, now Aker Florø, in June 2006. Aker Yards claims that Kleven Maritime withheld information on the management and organisation problems at the yard before the sale. 27-Aug-2007 : Aker ferry delays bite into earnings : According to CEO Yrjo Julin of Aker Yards, the company's half-year results show the delays of two or three ferries being built in Finland. Julin is unwilling to further specify the delays and their length. He comments that from now on Aker Yards will only take on orders with good margins. The ferry business is no longer attractive to it. A recently installed reorganisation of the Finnish shipyards will relieve the situation, says Julin. Each shipyard will have its own local management group with quick decision-making capacity. All production facilities will become under local shipyard management. Aker Yards is building seven ferries, five of them prototype models. Five are due to be delivered within the next 12 months. Cruise ship orders have not caused any difficulty.

August 2007


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25-Aug-2007 : Crane collapses in Kobe; three dead, four injured : A large crane collapsed at a Kawasaki Shipbuilding Corp factory in Kobe's Chuo Ward on Saturday morning, killing three workers and injuring four others, some seriously. The accident occurred at around 9:45 a.m. while the shipbuilding crane was undergoing repairs, the officials said. About 10 people were in the area when the 50 m crane fell over, they said. Police have opened a probe on suspicion of professional negligence. Investigators said repair work on the 800-ton crane began at around 8 a.m., and that seven people were about 15 m above ground, and two others were nearby at the time of the accident. Workers were trying to replace the shaft in a moving part of the crane, but when it didn't move, they increased the hydraulic pressure and broke the shaft, causing it to collapse, the police said. The crane's arm is believed to have broken off. 23-Aug-2007 : Mid October start for production line two of Jiangnan Changxing : According to China Ship News, CSSC has evaluated the production capacity of Production Line 2 of Jiangnan Changxing Base, which is formally registered under the name of Shanghai Jiangnan Changxing Heavy Industries Co Ltd. It was given the green light for an October start. 23-Aug-2007 : Samsung to use Stena orders as a stepping stone to cruise : Samsung Heavy announced on August 23 that it had received orders for two high-end 31,000 gt class passenger ships, valued at $270m from Stena Company of Sweden, the largest ferry company in Europe. Samsung said it had already proven its capabilities for independent design technology and ship model development in the field of world-class passenger ships by successfully delivering 3 vessels ordered by Minoan Company, Greece, in 2001, and 3 vessels ordered by Norfolk Company, Netherlands, in 2006. By receiving passenger ship orders from Stena Company, SHI prepared a foundation to tap into the market for cruise vessels, which will become strategically important in the future. The Korean shipbuilding industry has global competitiveness in the area of commercial vessels such as oil tankers, extra-large container vessels, and LNG vessels, but European shipbuilding companies still hold more than 90% of the market share in passenger ships, including cruise vessels. It called the cruise business a potential “new blue ocean” for Korean shipbuilding companies to tap into, considering that the price of cruise vessels is the highest in the passenger ship class, each costing $500m to $1bn, and also considering that cruise ships take up more than 12% of the global vessel market, with new orders worth $ 13 bn a year being made, and lastly noting that China is rapidly catching up on Korea in the area of commercial vessels. With a strategy to enter the cruise vessel market in earnest within ten years, SHI has already developed a model for an 85,000 gt class extra-large cruise vessel, and is striving to build its expertise in interior design, the core of constructing passenger ships, by leading efforts to localize machines and materials for interior design, and by enhancing design and construction technology through the establishment of inTEC, a Technology Cooperation Committee formed with domestic hotel interior design companies that has been meeting since 2000. SHI in particular, already able to independently design and produce safety facilities to international standards, such as room design, fire extinguishing, and life saving equipment, is steadily developing the technology needed to construct cruise vessels, through work such as completing the development of automatic control navigation system for passenger ships. CEO Kim Jingwang said, “With the increasing number of 'newly rich' people in China and India, the number of tourists using cruise vessel now amounts to 16.9 million, and this number is expected to increase by 8% annually. We will construct this passenger ship for Stena as a high-class, luxurious ship, and it will become a valuable stepping stone towards SHI building more cruise vessels, brightening the future for the Korean shipbuilding industry.” 21-Aug-2007 : Orient Shipyard to add a capsize shipyard in Gwangyang : On August 21, 2007, Orient Shipyard concluded an investment contract with Gwangyang City to build a new shipyard. The gross investment amount is more than KRW 100bn. Aiming to commence land construction and quay service by next year, it is scheduled to be completed by 2010. The newly constructed Shipyard will be 97,042 sqm. The initial staff strength will be 450, over time to expand to more than 1000. While some reports indicate that this new yard has taken orders,

August 2007


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yard management indicate to Worldyards that the 12 capesize mentioned on the website is a sales target. The company intends to construct its own floating dock of 300 m by 50 m. 21-Aug-2007 : Yantai Raffles $40m gantry crane for rig building : Yantai Raffles announced that the construction of its revolutionary gantry crane, which will be used to build semi-submersible rigs and other huge offshore vessels, will see its full completion in October 2007. The Group’s 'Tai Sun' gantry crane, named after Shandong Province’s famous mountain, is the world’s largest crane with a total lifting capacity of 20,000 tonnes. Its second 4,800 tonne beam has been hoisted to its final position at 118 m above the dock floor, which signals the commencement of a series of tests as required by the Chinese authorities. The gantry crane’s two beams, designed to lift 10,000 tonnes each, will be tested to see if they will be able to lift 20% above their designed lifting capacity using ready-cast concrete blocks. “For the last 7 years, several Chinese and foreign companies have been involved in the design, construction, supply, commission and testing of this gantry crane. We expect these tests to be completed by October 2007 and look forward to its full operation soon after,” Mr Chang said. It measures 130 m in length and 122 m in height. 20-Aug-2007 : Hyundai and Daewoo quantify expansions : Daewoo said that it’s drydock expansion to the new addition is to allow the company to build an additional 10 large vessels annually. That equates to KRW 1tln in sales revenue, according to DSME. They will also invest about KRW 150bn ($160m) to build a floating dock which will start operations by June 2009. The new floating dock will have an annual build capacity of six to seven 12,600 teu container ships, or the same number of very large crude oil carriers. Hyundai Heavy Industries will spend KRW 180bn on the new dock that it said will increase output to 3.35m dwt from the current 3.2m dwt. Hyundai hopes its new dock will generate an additional KRW 2.5tln in annual revenue. 20-Aug-2007 : Samsung to add homegrown block factory : Samsung Heavy Industries will invest KRW 270bn over the next three years to build a block assembly plant in Geojedo, South Gyeongsang province. The new factory will enable the shipbuilder to produce an annualized 100,000 tons more blocks on 280,800 sqm of land. The project will start by 2010, on a plot designated as a Special Shipbuilding Agricultural & Industrial Complex site two km away. The development of the factory plot is expected to contribute considerably to vitalizing the regional economy, by expanding production by $585m annually, and by directly and indirectly creating about 6,000 new jobs. CEO Kim Jing-wan said, “We have developed a great deal of momentum, as we were able to develop this plot at a time when it was urgent for us to secure sufficient work space in order to establish construction facilities capable of building 70 vessels by 2010. Expanding the facilities will also make a positive contribution towards the vitalization of the regional economy.” 17-Aug-2007 : Yangfan Group delivers first 2750 teu ship : Maersk Jena, the first 2,750 teu container ship, was delivered by Zhejiang Yangfan Shipbuilding Group. It is the first of the series built for NSC. The ship is 224.2 m long and 31 m wide. 14-Aug-2007 : New Yangzi opens early : Yangzijiang Shipbuilding has started operations at its new shipyard four months ahead of schedule. According to a report by Marcus Hand in Lloyd’s List, “Yangzijiang said that it had completed the RMB 1.5bn ($198m) Jiangsu New Yangzi yard four months ahead of schedule and had already started operations, bringing forward the delivery of some vessels on order.” The yard is also currently in negotiations to acquire 350,000 sqm of yard space in Jingjiang City and would have a quayside of 430 m. Production would climb 40% in 2008 at the yard if the new space can be procured.

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14-Aug-2007 : Vinashin to spend $7.5 bn on mill : Vietnamese state-run shipbuilder Vinashin has entered a deal with the central Ninh Thuan province to build a $7.5bn iron-casting facility. Once raised, the behemoth would churn out 8.5m tons of iron annually in Ninh Phuoc district. In the first stage, between 2008-10, the project will develop at an estimated cost of $1.7bn. The remaining capital will be injected into expansion of the mill over the next 8 years. The capital arrangement has gone undisclosed so far. Established in 1996, Vinashin has branched out into seaport construction and the steel industry, aside from its core shipbuilding business. The group aims to achieve revenues of $1bn this year, up from $690m in 2005. It has ongoing shipbuilding contracts worth up to $12.3bn, with orders from foreign companies accounting for $10 bn. Vinashin is assigned by the government to build a national shipping fleet to meet domestic transport and 30% of the export transport demand for crude oil. Between now and 2010, the unlisted-shipbuilder plans to build seven shipyards, six shipbuilding industrial parks and seven shipbuilding industrial complexes throughout Vietnam. Additionally, it will invest in upgrading 10 major shipyards capable of building 3,000 to 10,000 dwt ships. 14-Aug-2007 : Hyundai Samho gas explosion injures 11 : A gas explosion injured 11 workers at Hyundai Samho Heavy Industries, a shipbuilding company in South Jolla Province, on August 13, 2007. Welding gas leaked through a cover and was ignited by a spark. The accident left a 46-year-old labourer with serious injuries, while 10 other workers were sent to neighbouring hospitals for treatment. All of the injured were working on an assembled hatch cover of a ship using gas-welding equipment. While some were seriously injured, others suffered slight burns. There were no gas barrels at the scene of the accident. The labourers were using gas through a pipe that was linked to the main gas storage tank of the ship plant. Police suspect gas leaked from the pipe and are investigating the exact causes of the accident. In May, two workers at Hyundai Samho were killed in a crane accident. The crane, 40 m high and weighing 200 tons, collapsed at the ship assembly plant, killing an operator and a repairman. 10-Aug-2007 : Tenth dock for Hyundai’s Ulsan yard : Hyundai Heavy Industries Co said on August 10, 2007, that it plans to build its 10th dry dock in Ulsan to meet rising orders. The construction of the dry dock, 640 m long and 92 m wide, will be completed by January 2009, the shipbuilder said. "We have a three-year backlog and our nine dry docks are already fully booked, while owners cannot wait for a long time to have their ships delivered," a Hyundai Heavy official said. According to the official, Hyundai Heavy plans to establish a crane which has a lifting capacity of 1,600 tons at the 10th dock. The shipbuilder has clinched orders of around $11bn so far this year, achieving more than 80% of its 2007 target. In the first six months of the year, South Korean shipbuilders also secured a record $33.2 bn worth of orders. Overall annual vessel output is expected to rise to at least 80 ships from 70 ships currently. The project will take about 15 months. An official from the HHI said, “We considered buying construction sites both at home and abroad. To prevent the possibility of knowledge leaks, we decided to invest locally.” The additional dock is expected to increase HHI’s capacity substantially. The dock will be capable of constructing a vessel that can carry one million deadweight tons (dwt). The dock’s scale is comparable to HHI’s third dock, which is the company’s largest as of today. There are suggestions that the unit will be used for offshore engineering of FPSOs. HHI will also extend two dry docks. Number Five Drydock is to be extended by 120 m from 260 m to a total of 380 m. Number Nine Drydock will be 100 m longer to 460 m (from 360 m). The extensions will be completed in 2008. 05-Aug-2007 : Vinashin nets $2.6m in first half profit : Vinashin reported after-tax profits of VND 42.3 bn ($2.6m) for the first six months of the year. Vinashin plans to increase its registered capital from VND 40bn to VND 138 bn and to issue 9.8m additional shares. It will pay its 2006 dividend in additional shares to existing stockholders at a ratio of 10.3, offer 6.4m shares for sale to strategic shareholders, and award 200,000 shares to employees.

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03-Aug-2007 : Sevmash sacking in failure to fulfill carrier contract : The general director of the largest shipbuilding enterprise in Russia has lost his job at Sevmash because an aircraft carrier sold to India in 1994 has not been modernised on time, combined reports state. The vessel was due to be upgraded and re-equipped by 2008, but now won’t be ready until 2011: “ The reason for Vladimir Pastukov’s dismissal is the failure to carry out the contract to re-equip and modernise the aircraft carrier on behalf of the Indian navy,” a source at Sevmash told Interfax. A source at Sevmash told interfax that the most likely replacement for Pastukov would be Nikolai Kalistratov, currently director of Zvyozdochka ship-repair plant. 03-Aug-2007 : Changxing injection within three years : Hudong Heavy machinery’s Board of Directors chairman, Yang Jiafeng, said on July 27 that he expected that if the Changxing shipbuilding base turns a profit within three years, the shipbuilding base will be injected into the Shanghai listed company, which has been re-named CSSC. The new company acquired recently through a share offering three CSSC units. These assets of RMB 9bn include stakes of 100% in Shanghai Waigaoqiao Shipbuilding Co Ltd and CSSC Chengxi Shipyard Co Ltd, with 54% in Guangzhou CSSC-Ocean GWS Marine Engineering Co Ltd. As of October 31, 2006, Waigaoqiao Shipbuilding’s assets, net profits and income had reached RMB 2.15bn, RMB 708m, and RMB 5.61bn respectively. Meanwhile, Hudong Heavy Machinery’s net profit jumped 99.41% to RMB105.8m in 2006, and earnings per share by 99.41% to RMB 0.438. The company has a share of about 60% of the Chinese market, and exports to more than 20 countries. 03-Aug-2007 : Infrastructure major Punj Lloyd acquires stake in Pipavav : Seen as a strategic investment to support its offshore business growth, New Dehli based Punj Lloyd has acquired a 25.1% stake in Pipavav Shipyard for Rs403 crore ($99.7m). A company spokesperson said that the investment would help them develop new offshore platforms and also revamp existing ones. The proposed shipyard, with confirmed orders of $358m (Rs1,450 crore) and a letter of intent for another $513m (over Rs2,050 crore), is located on India’s west coast, is spread over 725 acres with 175 acres of waterfront land. The project is in three phases over 10 years, with clutch of leading banks holding a 51% stake in PSL, and the other 49% being with Gujarat based Sea King Infrastructure (SKIL). Even before the deal, PSL had an association with Punj Lloyd. Last year, PSL had roped in the Singapore government company SembCorp as a strategic partner. Recently, SembCorp's engineering and construction business was acquired by Punj Lloyd and was rechristened Sembawang. 02-Aug-2007 : Tech theft suspect identified as DSME man : A former head of the technology planning team at Daewoo Shipbuilding & Marine Engineering has been accused of attempting to pass on to China sensitive company information worth KRW 517.5bn. The man concerned had moved jobs to another ship design firm that had launched a joint venture with the Qingdao city government to build a shipyard there. He is accused of copying blueprints for 69 vessels and a shipyard, copying altogether 360,000 files worth KRW 517.5 bn ($561.1m) in research and development costs alone. Those files, if handed over to China, would have narrowed the technology gap between China and Korea by two to three years, while the numbers circulating in South Korea claim that KRW 35tln ($38bn) in damages to Korean shipbuilders would have been incurred over the next five years. The Chosun Ilbo editorialised, “The problem is not limited to industrial spies but to small companies that are bought up or who have their staff headhunted. Earlier this year a law was introduced to prevent such leaks of important technology occurring, but it is hard to apply to mere individuals. As 85% of industrial espionage involves former or current employees, the onus is on companies themselves to manage their human resources better in order to prevent illegal transfers from damaging both their own business and that of the local and national economy.” 02-Aug-2007 : Keppel to build specialised vessels in Nantong : Keppel Offshore & Marine Ltd (Keppel O&M) has officially taken the wrapper of its new wholly-owned subsidiary, Keppel Nantong Shipyard Co Ltd (Keppel Nantong) in Nantong, Jiangsu

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province. The business was acquired by Keppel Offshore & Marine in May 2005, but it is unclear why the official opening has taken place two years later. The principal activities of Keppel Nantong are in the engineering and construction of specialised vessels such as AHTS vessels and tugboats. The ceremony was landmarked by the sale of two 45 tonne Azimuth Stern Drive tugboats to Kuwaiti owner, Arabian Gulf Mechanical Services & Contracting (AGMS). The tugboats will be delivered in September this year. The inauguration ceremony also celebrated the keel laying of two Anchor Handling Tug/Supply (AHTS) vessels for Whitesea Shipping & Supply LLC (WSS), company based in United Arab Emirates and a harbour tugboat for Singapore-based Keppel Smit Towage Pte Ltd (KST). These vessels are among the 18 offshore support vessels and tugboats that Keppel Nantong is currently building for a broad spectrum of worldwide clientele. The yard has a capacity to build up to 25 such vessels on its 16 hectare site. Mr. Choo Chiau Beng, Chairman and CEO of Keppel O&M, said, “The addition of this Nantong facility has increased Keppel’s newbuilding capacity in meeting the growing demand for specialised vessels to serve the offshore field development market and growth in Liquefied Natural Gas terminals and maritime ports." “China is attractive as a cost efficient and competitive shipbuilding centre. We intend to increase our investment in Nantong and optimize Keppel Nantong’s facilities to take on more and higher value projects.” Through the transfer of expertise and technology from Keppel Singmarine, Keppel Nantong achieved its initial production targets after over one year of operations. Keppel O&M has a global network of 20 yards in the Asia Pacific, Gulf of Mexico, Brazil, the Caspian Sea, Middle East and the North Sea regions. 02-Aug-2007 : Krasnoye Sormovo Status Update : Russia’s Krasnoye Sormovo Shipyard under the MNP Group will supply seven ships to foreign clients this year, with five of them already sailing. The next two ships will be ready by September 10, Shipyard Director Nikolai Zharkov told Itar-Tass. “This is a very busy year for us. The last ship of this year will be transferred to the client in October, and we will start working on next year’s contracts.” Krasnoye Sormovo has orders for 2008 and 2009, and plans to expand production by 16%. The plant is investing R155m in modernisation projects to supply a 6,000 dwt oil tanker to Italy. In advanced marine engineering projects, a bathyscaph (deep-sea exploration diving apparatus) the AS-26, will be delivered this October and the modernised bathyscaph AS-28 to the Pacific Fleet next summer. Zharkov said that according to the contract, the Pacific fleet should have paid R262m, but so far the shipyard had only received R14m, with the plant spending R100m of its funds. 01-Aug-2007 : Wrong gate dumps ship engine off truck : The accident involving a truck and a 200 ton ship engine began when the driver tried to deliver the load through the wrong gate at NASSCO, according to a police report. “He was backing up, he hit a curb and it started tipping,” said San Diego police Traffic Sgt Jeff Fellows. The engine had been chained to the trailer when the accident occurred and the impact punched a crater deep enough to sever a buried water main in front of the National Steel & Shipbuilding Co. The engine crushed the front of a van in which a woman was sleeping, and it damaged two other parked vehicles. No one was hurt. On Sunday, it took five hours and three large cranes to finally lift the giant power plant out of the 8-foot-deep hole it left in Harbor Drive. The diesel-electric engine was being shipped to NASSCO to be installed in the Amelia Earhart, a new Navy transport ship, shipyard officials said. The engine had been shipped to California by rail by its builder, Fairbanks Morse Engine. The tractor-trailer hauling the engine made it into the city without a problem, as previous shipments had done. It was only after reaching its final destination, NASSCO's bayside facility, that problems arose. The trailer was equipped with a hydraulic system designed to keep heavy loads level. However, once the trailer wheels struck the curb, neither the hydraulics nor the chains securing the engine were enough to keep the load stable, Fellows said. “The hydraulics were trying to level it, (but) it started tipping back and forth, and it fell,” he said.

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01-Aug-2007 : MHI may shelve cruise ship ambitions : Marine-net reported that “The realisation of the newbuilding talks to construct next-generation passenger ships by Mitsubishi Heavy Industries (MHI) has taken a rather delicate turn. It seems that the ship price offered by MHI, which reflected skyrocketing prices of materials and machines, does not meet the desired price of its customers.” The report also said that recruitment of skilled workers continues to plague MHI. After the two 116,000 grt large-size passenger ships for Princess Cruises, MHI is looking at bigger ships for 2012 delivery. The real estate recovery in Japan means that finding interior finish workers is now very tough. The trouble with the previous two ships means that MHI has priced a cushion into the quotes, but there is a significant gap compared to the owner’s thinking. “It has become highly likely that MHI will push back the delivery of passenger ships and prioritise the construction of other ship types,” said Marine-net. The 116,000 grt passenger ships built for Princess were priced at around $460m a piece when ordered in 2002, but the prices are now $570m - driven by a rising euro. 01-Aug-2007 : Titan’s first ship hits the water : On August 1, 2007, Titan Quanzhou Shipyard, announced the launch of its first vessel, Titan Honour. The vessel, a 6500 dwt bunker tanker, will be delivered to the customer in October 2007. The bunker tanker is one of twenty two vessels currently on order from customers in several countries, including Singapore and Norway. Over the next two years, Titan Quanzhou Shipyard will not only expand its specialised ship-building capability for chemical and oil product vessels, but will also be developed into one of the largest ship repair yards in the region, with construction of docks and related facilities scheduled for completion in 2009. In addition, Titan Quanzhou Shipyard will also become an offshore engineering hub; building oil platforms to serve the growing offshore oil exploration and production industry in Asia. Construction of the facilities is underway for completion in 2008. The yard has an access channel of 23 m and, in its main approaches, up to 35 m, with a width of 300-600 m. Occupying 110 hectares of land and with 3,000 m of shoreline, the shipyard can berth up to 25 vessels. The ship repair unit is targeting 250 vessels per year, including VLCCs and container ships up to 397 m in length The shipbuilding facility, which is already operational, specialises in the construction of bunker tankers and chemical tankers up to 9,000 dwt. The offshore engineering facility, currently under development, will be capable of building oil-drilling platforms and rigs. 01-Aug-2007 : Longxue is to start the first VLCC in March next year : Longxue Shipbuilding Base is on the north of the east coast of Longxue Island, Nansha, Guangzhou, at the estuary of the Pearl River. The quay length is as long as 4.5 km and the width of the hinterland is 1.3 km. According to China Ship News, the first phase will be invested with RMB 4.5bn. The merchant shipbuilding zone covers an area of 2.5m sqm, and will build two 300,000 dwt docks and supporting facilities. In January 2006, NDRC approved the proposal for the first phase. This zone is likely to be put into trial operation at the end of 2007. A special vessel shipbuilding zone covers an area of 860,000 sqm and will target building and repairing specialised vessels. Offshore Engineering Zone covers 500,000 sqm and builds mainly offshore engineering assembly platforms and supporting facilities. The ship repairing zone covers 510,000 sqm and will build one 300,000 dwt dock and one other 300,000 dwt dock. It targets repairing 140 ships annually. Now the earthwork has been started simultaneously with the docks. The construction of the 340 m long outfitting wharf has also begun, and all the work is expected to be completed in two years. Now Longxue has secured orders for 12 ships with 3.07m dwt and a value of $1.1m. Longxue will start construction of the first VLCC in March next year and deliver the first ship in October 2009. 01-Aug-2007 : Tenglong does China’s first sulphur tanker : According to China Ship News, Tenglong Shipyard has launched China's first 3000 dwt carrier of liquid sulphur. The ship was launched on July 31 and is to be delivered in October this year. The ship is built to CCS class. It is 89.8 m long, 15 m wide and 7.6 m deep. It is dedicated to shipping

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molten sulphur at 135-145 degrees centigrade. The ship owner is Junan Shengrong Petrochemical China, based in Beijing. Tenglong Shipyard is a private shipyard in Wenling, Zhejiang.

Technology Developments

31-Aug-2007 : APL goes for 115,000 BHP; most powerful diesel engine ever seen : APL has ordered eight MAN B&W 14K98ME-C7 engines, each generating a massive 84,280 kW or 115,000 BHP at 104 rpm, to power eight 10,000 teu ships from Korean builders. When built, the diesel engines will qualify as the most powerful ever built in shipping history. The electronically controlled 14-cylinder engine has been specially developed to meet APL’s demanding operational and environmental requirements. The advantages of the MAN B&W ME-C range of engines are: - appropriate fuel-injection pressure and rate-shaping at any load - operating mode easily changed during operation - a simple mechanical system with well-proven, traditional fuel-injection technology familiar to any crew - a control system with precise timing that gives good engine balance with equalised thermal-load in and between cylinders - comprehensive monitoring and engine diagnostics contribute to longer time between overhauls - lower rpm possible for maneuvering - accomplished acceleration, astern and crash-stop performance - software upgrades available over engine lifetime The new engine can optionally be changed over to different low-emission modes where its NOx exhaust emission can be reduced below IMO limits if necessary due to local emission regulations. Smoke values for the most recent generation of MAN B&W engines are so low that exhaust plumes are typically invisible. The Alpha Lubricator also comes as standard, ensuring a very low lube-oil consumption that in turn reduces particulate emissions. 14K98ME-C TECHNICAL DATA No. of cylinders: 14 Cylinder bore: 98 cm Output: 84,280 kW Speed: 104 r/min Mep: 19.2 bar SFOC: 171 g/kWh Height: 14.55 m Width: 4.37 m Length: 29.00 m Weight: 2,219 dry mass tons The new order illustrates how the current demand for container vessels globally has continued into 2007 with the construction of newbuildings remaining at a high level, particularly in Korea. Hyundai Heavy Industries (HHI) and Daewoo Shipbuilding and Marine Engineering Co Ltd. (DSME) will both construct four of the new ships, with delivery scheduled for 2011. MAN Diesel’s 98-bore programme can now claim some impressive figures with a total number of 460 engines built or ordered to date, comprising 28,699 MW. Of this number, MAN Diesel has received orders for an incredible 87 (5,823 MW) just this year to date. 03-Aug-2007 : Single skin VLCC well suited to ore conversions : Single hull VLCC are well suited to conversion into iron ore carriers, according to naval architects. The two longitudinal bulkheads are very similar in positioning to the designs of iron ore carriers, which by definition are double hulled. The internal configuration for the conversion requires additional stringers and stiffeners, while the only other possible major change may be raising the inner bottoms to meet the rule requirements of the conversion. Naturally hatch openings are cut into the hull and hatch covers are installed whilst the VLCC cargo piping is removed. 03-Aug-2007 : Beyond bunkers; Fuel cell technology : A group of north European companies plan to install a clean fuel-cell engine aboard a supply ship in 2008 and believe that a large share of the marine world will follow suit within 25 years. 'Green' engines for ships will gain footing in the fiercely competitive global shipping industry, they say, as technology advances and relatively lax environmental norms toughen. "Stricter regulations coupled with policies favouring green solutions will in future years more than compensate for the higher initial investment costs of fuel cells," Tomas Tronstad, who heads the cross-industry fuel

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cell project for Norwegian ship classifier Det Norske Veritas (DNV), told Reuters. "We hope that in a decade there will be many similar projects around the world and in a quarter century a large part of the marine world could be on fuel cells," Tronstad said. Iceland already plans to convert its entire fishing fleet to hydrogen fuel cell engines as part of its environmental drive. DNV estimates that fuel cells -- which generate electric power from a chemical process instead of combustion like regular engines -- now cost about six times more than diesel generators. But the technology can be up to 50 percent more efficient and much cleaner, helping to curb high costs of fuel and, as many expect in the future, the high costs of polluting. When powered by liquefied natural gas (LNG), as the first full-scale test model will be, carbon dioxide emissions are cut in half compared to diesel engines running on marine bunker fuel, and sulphur and nitrogen oxide exhausts are nearly eliminated. Fuel cells have no moving parts, slashing maintenance needs and making them inherently silent and vibration-free. Norwegian shipping group Eidesvik Offshofre ASA plans to install a 330 kW fuel cell system on an oilfield supply vessel next year. It will be one of several engines on the ship, all powered by LNG stored in refrigerated tanks on board. LNG tanks take up precious onboard space and need to be filled relatively often -- about once per week according to Eidesvik -- limiting the ships' range to coastal waters of regions with developed LNG infrastructure. The fuel cell will be built by MTU CFC Solutions, a unit of German engine maker Tognum. Finnish ship and industrial engine builder Wartsila and Norway-based consultant Vik-Sandvik are also taking part in the project. LNG is preferred to hydrogen-fed fuel cells, whose only exhaust is heat and water, because of the problems in storing large amounts of hydrogen and high costs of producing it, the project says. But Iceland's idea is to use its cheap thermal energy and hydropower to the production of hydrogen that would drive its fishing fleet, one of the world's biggest, and cut emissions. Other options for ship-based fuel cells, said DNV, could be methanol or biofuels, which are liquids in normal temperatures and more readily available throughout the world than LNG. 01-Aug-2007 : Bunker tank protection rules now in force : The new Regulation 12A in Marpol Annex 1 came into force on August 1, 2007. This sets out requirements for the location of oil fuel tanks in all ships with an aggregate fuel capacity of 600 m³ or more that are either to be delivered on or after August 1, 2010, or for which the contract is placed on or after August 1, 2007. The requirements specify that fuel tanks must be located in such a way that they are protected by a double hull, so as to help prevent spillage of bunker fuel in the event of a collision or grounding.

Country News

31-Aug-2007 : Yangzijiang chief adds to chorus of 'China overcapacity' : A Business Times report quoted Yangzijiang Shipbuilding's executive chairman Ren Yuanlin warning of overcapacity. “There will be overcapacity, but the question is when,” he says. Previous upturns in the industry have never lasted beyond five years. “Now we are in the fourth year of expansion.” Still, he does not see the party ending just yet. Everyone thought there would be shipyard overcapacity last year, he said. But as it turned out, contracted prices for new ships last year were very low relative to prices today. “All the shipyards still don't have enough capacity,” he said, adding that Yangzijiang delivered just four ships in 2004 but last year it managed 16 ships of 10 different ship types. The biggest threat to business is the appreciation of the yuan, Mr Ren said. A one per cent increase inthe value of the yuan can erode Yangzijiang's earnings by 4.3%. The company's initial public offering in April this year raised about $1bn, giving Yangzijiang an

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advantage over other yards in China, and Mr. Ren would buy other yards were a downturn to occur. 30-Aug-2007 : South Korea to criminalise shipbuilding tech leaks : South Korea will develop shipbuilding technology transfer rules by the end of the year. The Korea Shipbuilding Association announced the measure after it participated in the Workshop for the Protection of Domestic Shipbuilding, on in Pusan with the Ministry of Commerce and the National Intelligence Service. The meeting was targeted at illegal technology transfers, particularly to its chief rival in the shipbuilding field, China. 23-Aug-2007 : Private yards put the button on the big boys : An analysis in China Ship News said that private Chinese shipyards are grabbing skilled workers from state-owned enterprises with the use of high payments. It outlined the following explanations: firstly, the investment cost is different. Large state-owned shipyards are stricter in investment management and have strict biding and auditing procedures for purchasing and engineering. To build a dock of the same size, the state-owned shipyard may need as much as RMB 300m while the private shipyard may only need RMB 100m. Secondly, the social burden is different. State-owned shipyards have a great many old workers and retired workers to consider, and may need to shoulder these social responsibilities. New private shipyards, however, do not have these worries. Next, the management costs are different. State-owned shipyards pay high attention to quality, safety and the environment, and specific functions are allocated specific staff. However, private shipyards have less staff focused on these responsibilities. They mainly depend on external hands or temporary workers. The total management cost is therefore lower. Lastly, the operational purpose is different. State-owned shipyards have to seek both economic and social benefits, and even fulfill national defence functions, while private shipyards only seek profits. Based on the reasons given, said China Ship News “Private shipyards afford to offer high price and attract more skilled workers or even professionals of higher level.” 09-Aug-2007 : Turkish shipbuilders in “severe delays” due to slow suppliers : A report in Seatrade magazine said that Turkish shipyards are suffering extensive bottlenecks in receiving main engines and equipment. “We have experienced massive delays when importing engines from Europe,” said Atilla Ciftciguezeli, a board member at Istanbul Shipyard. “We have a chemical tanker in our yard which has been waiting for a propulsion unit from a German supplier for over six months now. We have had to reallocate space so that we can build other tankers.” The report said that the problem is acute in the squashed quarters at Tuzla Bay as there is little space to moor a vessel out of the way. Osman Kaya Turan, deputy GM at Torlak Shipyard said that “All Turkish shipyards are facing delayed delivery by up to three months,” and complained that Turkish yards have to pay late penalties. There is a consequent push to set up marine engine factories in Turkey. 06-Aug-2007 : South Korean think tank warns on oversupply : South Korean shipyards need to be cautious about an excessive expansion of building capacity that could lead to oversupply and a sudden drop in prices, a state-run think tank said. The Korea Institute for Industrial Economics and Trade (KIET) said local yards could face serious problems if the current boom in demand losses steam. "The surge that began in 2000 is attributed to a healthy global economy that is fueling maritime commerce, and measures by many countries to force shipping companies to operate safer double-hulled vessels," said Hong Sung-in, a researcher at the economic institute. In 2003, the world's shipyards launched 35.5m gross tons of ships, surpassing the previous record set in 1975. This was broken when 51.7m grt of ships were made in 2006, while for the first half of this year an unprecedented 69m tons of ships have been launched. South Korea expects ship exports to top a record $28.2bn by year's end. Hong said such heated demand is leading to the introduction of floating docks and techniques to build ships on land without using traditional dry docks. It has also triggered a race by repair companies and shipping parts suppliers to make complete ships. As of June, 16 new domestic yards are building or have secured orders to

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construct 410 vessels totaling 6.98m CGT. This is about 13% of the 46.72m cgt being built and secured by all South Korean shipbuilders. Hong, however, said this race to build complete ships is leading to a shortage of trained workers. Yards are expecting a shortage of about 2,000 workers up until 2009. "All these developments are leading to a sharp rise in wages and construction costs that could come to hurt overall competitiveness if the global market cools down, especially with Chinese yards making inroads in capacity and ship quality," he said. "Companies need to strive to raise competitiveness through technology innovations and enhanced effectiveness, instead of just focusing on meeting orders," the report said. 02-Aug-2007 : Fujian builder warns of overcapacity : An official of Fujian Shipbuilding Industry Corp has warned of an overcapacity risk in China’s shipbuilding industry. With production of 14.25m dwt in 2006, a rise of 20% year on year, and with new orders up 150% held in hand, the official noted that these figures indicate that the world’s shipbuilding is transferring to China on a large scale, and China’s indusrty is entering a new peak of growth. He suggests that China’s shipbuilding capacity is likely to surpass 50m dwt. He predicts a high growth for the next three to five years, but warns of raised risks from overcapacity and price fluctuation due to excess expansion. A similar warning was voiced by the Chinese government several weeks ago. 01-Aug-2007 : STX targeted by China Ship News : STX’s new yard in China was the subject of a sharp editorial in China Ship News. “The illegal entry of foreign investment” is a “headache”, said the report, elaborating that “Korean STX has started the projects such as shipbuilding, block manufacturing, diesel production and crank shaft production all in China, totally ignoring China’s mid and long-term development plan for the shipbuilding industry. Such a deed has exerted a very bad influence upon the industry. Related departments should attach highly enough attention to handle this problem. Otherwise, STX will surely be followed. Then the shipbuilding industry might be out of control of the Chinese government.”

Others

11-Aug-2007 : Second worker dies after explosion at Aichi : A shipyard painter who was seriously burned in a shipyard accident has died. Soichi Yamataka, 24, a painter, died at a Nagoya hospital Saturday morning from serious burns he suffered in the accident. Another painter, 24-year-old Tatsumi Mokuo, had earlier died. Four other workers remain injured, one seriously. The explosion occurred at the IHI Corp. Aichi factory in Chita on Monday, investigators said. Yamataka and Mokuo were blown a distance of about 20 m by the blast. 10-Aug-2007 : Marine-net suggests ethylene in decade-end squeeze : Marine-net reported, “The possibility is looming that small-size gas carriers of the 2,000 t -22,000 cbm range may be in short supply in and after 2010.” It said that LPG were competing with chemical tankers for slipways. “Orders for ethylene carrier newbuildings have been particularly slow,” it said, providing a count of 40 on order as against 117 in operation. Negotiations are focused on 2012. Currently, small-size gas carriers in operation across the world number around 520. They are engaged in the transportation of petrochemical gases, such as ethylene and propylene. There are 117 ethylene carriers, which require low temperature of minus 103 degrees

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Celsius and are generally in the range of 4,000 to 9,000 cbm range. There may be an overlap in 2008 as new ships come in, but this should ease as older tonnage is phased out. 10-Aug-2007 : Carrier headache for quality steel : An ambitious shipbuilding project of the Indian navy has hit a roadblock because of the non-availability of quality steel. The construction of a 37,000 ton aircraft carrier at southern Cochin shipyard is not likely to be completed and handed over to the navy before 2015. The project was to be completed by 2011 to 2012. The government approved the more than $300m project in January 2003. "At the first stage, the project faced a big problem in getting 20,000 tons of special quality of steel. This problem still continues, even after Steel Authority of India came out to help the navy. Then, the project was further delayed due to a delay in the procurement of bulb bars, said a navy official. He also said that the detailed designs and pre-production work also took more time than expected and as per revised plans of the project, the keel of the warship was to be laid in October. It has now been deferred another year. “This delay amounts to an increase in the cost of the project,” the official said. The delay has increased the problems of the navy, which is already grappling with delays in some of its other big projects, The Times of India newspaper reported. The navy is worried because the decommissioned Russian aircraft carrier Admiral Gorshkov cannot be inducted into the navy before 2010, the media report said. 02-Aug-2007 : Paint prices pasted by commodity surge : A Lloyd's List special report on coatings has highlighted the rising cost of paints. The article by Nigel Kitchen quoted Dirk Philips, general manager, SigmaKalon Marine & Protective Coatings, who said, “The most serious problem the marine coatings market is confronted with is the incessantly rising cost prices for key raw material such as copper, zinc and crude oil.” Higher steel costs also affect the steel cans. The biggest culprits are petrochemicals such as epoxy, solvents and alkyd, while copper is used in biocidal antifouling products adding about $2.50 a litre onto the selling price. Major paint makers are trying to using commodity hedging strategies. 01-Aug-2007 : Hudong Heavy upping engine output : China Ship News reported that Hudong Heavy Machinery Co Ltd will increase its output of diesel engines to 89 units with 1.61m horsepower in 2007, 10 units more than in 2006. At the end of 2007, the joint venture with CSSC MOL Marine Diesel project and Shanghai Hulin Metal Processing Co Ltd will be put into operation according to Gao Kang, General Manager of HHM. HHM plans to increase its capacity to 2m horsepower in 2009.

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