Despite of dreary forecasts this year’s 24th shipbuilding, machinery & marine technology international trade fair hamburg exhibition has not only been[ds_preview] fully booked with about 2.000 exhibitors from 60 countries worldwide but according to Hamburg Messe Management a number of applications even had to be rejected. Over 50,000 anticipated international visitors will see all kinds of presentations of environmental and cost-efficient new technologies and products high lightening the »green era« of the shipping and shipbuilding industry.
New confidence has emerged after the heavy financial and commercial slump in 2009 which obviously is fading out owing to the continuous strong growth in the Asian region. Especially China as a driving wheel again has fuelled the hopes for a sustainable recovery of the industry with certain signs for another booming period. Thus the shipping sector did not loose any of its global significance and various international governments are supporting their industries accordingly. A number of visitors from governmental delegations planned at the SMM are reflecting this and the increase of national pavilions to 30 this year is also confirming it. India, Sweden and Singapore have entered as new participants this year.
The world’s leading fair for the shipbuilding and maritime supply industry promises to promote the development of environmental friendly technologies and products.
Regulations and limit values for pollutant emissions issued by the International Maritime Organisation (IMO) and numerous countries are acting like an economic programme in itself, as vessels in operation have to be retrofitted affirmatively. Shipyards and marine equipment suppliers have responded accordingly and will be showcasing environment-friendly innovations at SMM 2010. Under the auspices of the Korea Shipbuilders’ Association (KOSHIPA), the leading Korean yards will present new ship designs. Only at the end of January did SHI announce its intention to build from 2015 exclusively environment-friendly vessels with CO2 emissions 30 % lower than today.
The exhibitors at the SMM 2010 above all the traditionally represented market leaders will prove that environmental protection and cost-efficiency are in no way mutually contradictory. Technologies that are protecting our climate and environment and being simultaneously energy efficient also often ensure cost efficiency to ships operations.
Special features
»Future of ship financing«
Ship financing is a focal issue at SMM 2010, along with environmental protection and offshore engineering. The starter and first highlight in the conference programme at the world’s premier shipbuilding fair is the Ship Finance Forum, to be held on 6 September that is the day before the start of the fair.
Classification societies
on the move
The world’s leading shipbuilding fair highlights harmony in environmental protection and efficiency. Classification societies have a key role to play in protecting the marine environment and reducing the carbon footprint of shipping. They are vital as technical consultants to the authorities, said Dr. Hermann Klein, Chairman of the International Association of Classification Societies Ltd. (IACS) and a Member of the Management Board of Germanischer Lloyd AG, in an exclusive interview for HMC in the run-up to SMM 2010. HMC (Hamburg Messe und Congress) is the organiser of SMM 2010, 24th shipbuilding, machinery & marine technology, international trade fair hamburg. It will be held at the Hamburg Fair site from 7 to 10 September 2010. A large proportion of the innovations on show will give an improvement in environmental protection and at the same time greater efficiency in operation. »Energy efficiency and competitiveness of ships have been major issues for Germanischer Lloyd for many years«, added Dr. Klein. Shipping is a global business, so we need global standards – they are discussed and adopted at political level by the International Maritime Organization (IMO) in London. Current examples are IMO’s Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships, the International Convention for the Control and Management of Ship’s Ballast Water and Sediments, and successive toughening of limits to sulphur content in fuel oils. Dr. Klein confirmed this view – »Policy decisions in the IMO committees would simply not be possible without the technical expertise of the classification societies and other industry representatives«. Safety continues to be crucial. »There are a range of studies which show that some 80 % of all ship collisions, groundings, fires and other disasters are due to human error«, explained Dr. Klein. That is why GL has recently developed new design specifications for passenger ships and ferries. The »safe return to port« rules mean ship design has to ensure safe return of the vessel to port under its own propulsion following defined damage, and minimise risk of fuel spills due to accidents. The reliability of the components installed is an important factor. For example, safety can be put at risk by use of counterfeit spare parts which do not comply with the usual standards.
Dr. Klein saw little scope for cost reduction in the classification process. The costs are normally less than 1 % of the purchase cost of a ship. He feared that further reductions in cost would be at the expense of safety. Despite this, the Class Regulation initiated by the European Union last year will also make the classification process more efficient and less expensive, without endangering safety standards. It sets two main goals – harmonisation of design standards and certification procedures of the classification societies recognised in Europe (including uniform interpretation of international regulations), and creating the conditions for mutual recognition of certificates of the various European classification societies. The Class Regulation has to be applied within the next four years.
Discussion of this issue was launched at SMM four years ago by the European Marine Equipment Council (EMEC), which represents 1,300 European companies. »In our view, these are reasonable objectives«, said Jaakko Eskola, EMEC Chairman and Group Vice President of Wärtsilä Ship Power – »harmonisation will bring clarity in the regulatory framework. The European marine equipment industry looks forward to operate in accordance with harmonised rules, defined with a view to reflecting the current state of technology and promoting safety. Mutual recognition of certificates will also bring more efficiency to the functioning of the maritime industry«. Today, the material is certified by various different classification societies. The marine equipment suppliers believe there is a lot of potential for improvement in this multiple certification process, without any negative impact on safety. »We are aware that the Class Regulation brings changes to the current system and that Third Countries have concerns about the impact that Article 10 may have outside the EU« said Jaakko Eskola. The European equipment suppliers provide support, but it is up to the classification societies to achieve progress in harmonisation of standards and to set the conditions for mutual recognition of their certificates. The EU Regulation addresses the European classification societies recognised by the Commission, and they have started their work. Dr. Klein noted that a working group has now been set up to develop procedures for mutual recognition of certificates in accordance with the criteria of the EU Regulation. He added that IACS is not involved in this process.
Growth of the offshore market
The offshore market is showing stable growth worldwide. So offshore will take up more space than in previous years at SMM 2010, with many companies presenting technologies and products from the offshore sector. There will be a special two-day workshop run by Hamburg Messe in the course of exhibition, dedicated to the offshore sectors oil and gas, wind energy and ocean engineering. Last year, the offshore market proved to be a lot more robust than ship building. It is a segment with outstanding perspectives, as shown by the market analyses from Douglas-Westwood. For the next five years, the experts are predicting continuous growth in offshore operations and maintenance, with worldwide investments of some USD 330 billion. The deepwater oil production sector including repair and maintenance will do better than other sectors, with growth of more than 10 % by 2015, according to information from Thom Payne, a leading analyst at Douglas- Westwood. Many of the exhibitors at SMM 2010 were quick to recognise the opportunities available offshore in the oil and gas production sector and in wind power, and are now earning a large proportion of their revenues in this segment. The offshore sector enables the shipyards and equipment suppliers to compensate to some degree for the weakness of demand in global shipbuilding. Blohm + Voss Repair, a subsidiary of TKMS, has gained profile in this field of business by conversion of the »Kraka«, a cable laying vessel, to a sophisticated offshore supply vessel. »Siemens Marine Solutions earns about 30 % of its global revenues in the offshore sector,« says Eberhard Becker, head of marine business at Siemens. The Group supplies marine diesel-electric propulsion systems, e. g. recently for the offshore vessel »Skandi Acergy«, and with automation, electronics, communications and safety solutions, and water treatment plant for various oil drilling rigs and floating production, storage and offloading vessels (FPSOs), etc.
Vincenzo Spitaleri, CEO of GEA Westfalia Separator, sees no great differences here – »There are so many synergies between shipbuilding and offshore. Firstly, the markets overlap – we are sometimes working with the same customers. And secondly, the technology for offshore and ship technology is comparable«. GEA Westfalia Separator recently received large orders for centrifugal systems for oil /water separation, for drilling ships, and for the conversion of two supertankers to FPSOs. Schottel likewise sees »large-scale, sustainable growth potential in the offshore vessel market«.
The offshore market has developed into »stable additional core business«. The company did a large proportion of its total business with special propulsion systems for platform supply vessels (PSVs), offshore support vessels (OSVs), anchor handling tug supply vessels (AHTS), jack-up platforms and other special-purpose ships. Electronics suppliers such as SAM Electronics, an L-3 Communications company, are likewisevery much in demand in the offshore sector. SAM supplies offshore vessels with integrated navigation systems and diesel-electric propulsion systems, for example to Bharati Shipyard, India. The company also supplies automation, communication and dynamic positioning systems. HATLAPA, a marine equipment company based in North Germany, realises one third of its sales volume in the offshore market, a large proportion of this in the offshore wind power sector. For example it equipped »Windlift I«, a highly sophisticated special-purpose vessel for the construction of wind power systems at sea, with automated mooring winches. The opportunities for marine equipment suppliers in the offshore wind farm sector will continue to be good in the future. Douglas-Westwood’s »World Offshore Wind Report 2009–2013«, published last year, forecasts capital expenditure of € 21.6 billion for offshore facilities in the period up to 2013. In Europe, the EU Directives provide for renewables to deliver a minimum of 20 % of energy by 2020. That means a lot of wind power, which requires special-purpose ships for construction and repair of offshore wind turbines.
Cruise industry on steady course
Cruise ship building will again be a major attraction for visitors to SMM 2010. The big crowd pullers will include the stands of Fincantieri, Meyer Werft and STX Europe. The dominant shipbuilding companies in the cruise vessel segment are coming to the leading fair of the international shipbuilding industry with well filled order books. In this most demanding segment of the shipbuilding industry, the yards had orders for a total of 25 cruise vessels with 2.15 million gt, worth USD 14.8 billion in their books at the beginning of April 2010, according to Seatrade Insider. They include the »Celebrity Eclipse« delivered by Meyer Werft in April and the »Azura« delivered by Fincantieri, also in April. Europe’s Big Three, that is Fincantieri, Meyer Werft and STX Europe, account for 20 newbuildings. The other five orders, all of them for smaller vessels, are split between the Italian cruise vessel and superyacht builder T. Mariotti (two newbuildings, each 32,000 gt); Irving Shipbuilding from Halifax, Canada (8,700 gt); Chesapeake Shipbuilding, USA (3,000 gt); and Factoria Naval de Marin, Spain. It is by no means certain that this small but lucrative segment of cruise ship building will remain a European domain. The takeover of the Norwegian Aker Yards Group by Korean shipbuilding group STX undoubtedly means there will be transfer of know-how from STX Europe to the parent company. Sang-Ho Shin, who started his career at STX in 1980 and has been President & CEO of STX Europe since May 2009, has set out a clear objective – »We will become the leading builder of cruise and offshore vessels in the world. We realise that our goal can only be attained through the concerted efforts of STX’s own resources – our people, our technology, processes and other resources.« And when he says »we«, that is certainly not limited to the European subsidiary. Samsung Heavy Industries (SHI) is possibly already one step further. At the end of last year, SHI announced that they intended to become the first Korean shipyard to start building cruise vessels. They said that this was at the same time the start of a new shipbuilding era in Korea, ending many years of European dominance in this segment. The Korean shipyard was selected by the US company Utopia to build an apartment cruise vessel for USD 1.1 billion. According to SHI, the deal is to be sealed in the first half of 2010. The ship is to be delivered in 2013. And there are other Asian shipbuilding countries such as China and Japan which are aiming to build cruise vessels. Japan already has some experience of this area, with »Diamond Princess« and her sister ship »Sapphire Princess« built seven years ago at Nagasaki Shipyard & Machinery Works, belonging to the Mitsubishi Heavy Industries Group. The client was Princess Cruises, a US company belonging to Carnival Corporation & plc, the biggest cruise company in the world. The cruise industry has remained relatively unaffected by the global downturn of the past year. At present the cruise fleet comprises 281 ships worldwide, according to Cruise Industry News, an SMM exhibitor, and there will be 17.8 million cruise passengers this year. In 2015 there will probably be 300 luxury cruisers and 20 million cruise holiday-makers, according to an estimate by Oivind Mathisen, Editor-in-Chief of Cruise Industry News. »The cruise industry is heading for growth all over the world,« he adds. A large proportion of the growth in the next five years will be with passengers from Europe, South America and the Asia-Pacific Region. But North America will still be the largest market. Asia also wants to benefit from these growth rates. Thus in October 2009, Singapore started building an International Cruise Terminal, intended to double the country’s mooring capacity on completion at the end of 2011. So it is not likely that the cruise industry will get into stormy waters in the foreseeable future. In fact there are newcomers appearing on the scene alongside the current major players AIDA Cruises, Carnival Cruises, Royal Caribbean, Celebrity Cruises, Costa Crociere, MSC, Norwegian Cruise Line, etc. For example TUI Cruises, which acquired a cruise ship of its own for the first time last year – »Mein Schiff«. It is not a newbuilding, but was originally built by Meyer Werft as the »Galaxy«, and then fully converted and modernised at Lloyd Werft. And that is just the start. As Richard J. Vogel, CEO of TUI Cruises, declared, »We are planning to expand our fleet in the coming years«. Welcome words to the management boards of shipyards specialising in luxury cruise vessels.
SMM/GF
