Editorial Comment

by | 24th May 2017 | News

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Shiprepair & Maintenance 2nd quarter 2017Comment comment pic Q2

The global market for shiprepair is challenging at the moment, but there are some positive trends relating to environmental refits, and some regional developments where fresh investment gives hope for the future.


Results filed recently by a number of leading shiprepair companies show how tough the market has been over the past 18 months, as owners scale back their spending on ship maintenance and repairs. There is a general pattern of lower revenues and reduced profitability, almost on a worldwide scale, in annual 2016 figures for yards ranging from Sembawang in Singapore to Lisnave in Europe. Some yards do, however, indicate that while overall turnover is down, the amount of work per ship is steadily rising – a welcome trend that will hopefully continue.


One of the reasons for this upturn in project value is the need for environmental refits. There are growing signs that there is much greater interest in carrying out ballast water retrofits during drydocking periods now that the IMO has set a date in September this year for the Ballast Water Convention to come into force. Curbs to sulphur content in fuel are also due to take effect in 2020, leading to an upturn in scrubber retrofits and a rise in the conversion of propulsion systems to use electric power.


Over the past few months several of the leading BWT equipment suppliers have recorded significant contracts to retrofit series of ships for owners. This will not only benefit them, but the shipyards and contractors entrusted with carrying out the work.


While owners do finally seem to be accepting that they have to take action to be compliant, there are some concerns that even at this late stage changes to the timetable or the process could be made, which would effectively lead to more delays. Recently, for example, the dry cargo owner association, Intercargo, issued a plea that the new regulations should be amended to take account of the particular challenges faced by existing bulk carriers. “A newbuilding vessel is is totally different to retrofitting an existing vessel, while a bulk carrier has unique requirements to those of other ship types,” it said. Intercargo expressed concerns about the practical problems faced by its members in retrofitting ballast water treatment and is presenting two papers on the subject to the next meeting of the IMO Marine Environment Protection.


Committee (MEPC) in July this year. These papers list a range of challenges, including the incompatibility of the highly energy efficient gravity discharge, power and space requirements and ballasting capacity and the availability of systems approved by the US Coast Guard. Intercargo says: “The industry would therefore welcome a more flexible and pragmatic transition, until more proficient technologies and approved systems are made available.”So the saga rumbles on. Whether the IMO will buckle and concede to owners’ requests remains to be seen. If it doesn’t then there could be something of a windfall for shipyards as owners rush to make the compliance deadline. Meanwhile, fears are growing that a major crisis is facing the shiprepair industry in the US. Ongoing federal budget issues, unresolved at the time of writing, may force many US repair yards to lay off thousands of workers, and perhaps even close. The yards are dependent on naval repair and refit work, and the failure of budget talks could lead to the cancelling of several multi-million dollar contracts with possibly devastating effects. In a separate, unrelated development, the future of San Francisco’s Drydock is now uncertain. A deal between BAE Systems, the former owner, and the new operator, Puglia Industries, seemed to have secured its future. However, the two sides are now locked in a legal dispute over the cost of refurbishing the yard and workers have been put on notice. Closure is a real possibility, it is being reported.


On a more positive note, there are a number of investments being made to expand and enhance facilities in support of regional shiprepair work. Notably, Unithai Shipyard and Engineering Limited, Thailand’s leading shipyard, has this May taken into service a new floating dock, built at China’s Huarun Dadong Dockyard. This is the country’s largest dock and will allow Unithai Shipyard to accommodate aframax and post-panamax vessels of up to 150,000dwt. The investment will make Unithai a major player in South East Asia and signals a long term confidence in regional demand for shiprepair services.

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