Although many builder countries struggled to win new orders in 2015, yards in the Philippines, Vietnam and Taiwan managed to increase their combined share of global ordering to its highest level on record. Foreign owned yards have taken a significant proportion of these new orders, while domestically owned shipyards in these countries have had varying degrees of success.
Outside The ‘Big 3’
The past 18 months have been a difficult period for shipyards across the globe, with contracting activity weak in most sectors and showing few signs of recovery. Not all builder countries struggled in 2015, with some winning a higher number of orders than in the previous year. Outside of the ‘Big 3’ builder nations of China, South Korea and Japan, shipyards in a number of other Asian nations have fared reasonably well. In 2015, yards in the Philippines, Vietnam and Taiwan won a combined total of 80 new orders, up 19% year-on-year. Between them, they accounted for 6% of orders globally (or 5% in CGT terms), their highest combined share on record.
Philippines’ Foreign Influence
Yards in the Philippines took 44 orders of a combined 1.1m CGT in 2015, the fourth highest share of any builder country globally. The Philippine shipbuilding industry is dominated by two foreign owned yards, Korean-owned HHIC-Phil and Japanese-owned Tsuneishi Cebu, which between them account for 96% of orders placed since the former took its first order in 2006. These yards combine low labour costs with the expertise of their parent companies, and HHIC-Phil is the only yard outside of the ‘Big 3’ builder nations to have secured contracts for ‘mega’ boxships of above 18,000 TEU.
Variety In Vietnam
Last year, 4 yards in Vietnam won orders for 24 vessels (1,000+ GT) of a combined 0.3m CGT, and in 2016 so far Vietnamese yards have won 9 orders. Of these 33 ships, 19 were tankers, including the first LR1s ordered in Vietnam. Although contracting has been firm in CGT terms, smaller, domestically-owned yards have struggled. As in the Philippines, foreign owned builders, such as Hyundai Vinashin and Singaporean owned Triyards, won the vast majority of orders (96%) in 2015.
Tradition In Taiwan
Taiwan has been the exception to this trend, with 91% of orders since 2006 placed at yards owned by CSBC, a ‘traditional’, formerly state-backed builder established in 1977. CSBC’s Kaohsiung and Keelung yards have mainly won orders for boxships in recent years, including 10 x 2,800 TEU vessels contracted in 2015 by domestic owner Evergreen. In total, Taiwanese yards won contracts last year for 12 vessels of 0.3m CGT.
Aside from CSBC in Taiwan, smaller, domestically controlled shipbuilders in these three Asian builder nations have generally found it difficult to win orders in recent times. Across the three countries, 84% of orders in 2015 were accounted for by 6 foreign owned yards. Nevertheless, these builder countries have been fairly successful in winning contracts during the downturn, increasing their share of orders in a challenging market.