Chinese yards narrow gap in offshore vessel construction

Chinese yards narrow gap in offshore vessel construction_MChinese shipyards building offshore support vessels (OSVs) are narrowing the gap to European and Southeast Asian shipbuilders his or her quality has improved in the past, based on Venkatraman Sheshashayee, ceo of Jaya Holdings.Jaya, a Singapore-based OSV builder and operator, has expressed concerns over the hike in prices of Chinese-built OSVs plus the gradual improvements in designs and excellence of the specialised ships.

“Chinese shipyards today are a threat. They may be making up ground fast and the price difference has reduced sharply,” Sheshashayee told delegates in the Sea Asia 2013 Offshore Marine Forum, area of the Offshore Marine Day.

He was quoted saying the newbuilding price differential between Chinese yards and European yards has fallen by 50 – 60% in todays world in comparison with 2010. Sheshashayee took the opportunity to reiterate Jaya’s partnership with technology innovator IHC Merwede on designing a number of platform supply vessels (PSVs) constructed with European quality at Asian prices.

Area of the believe that the purchase price differential has narrowed may be caused by the increasing labour cost in China, which includes been displaying economic development of 7-8% annually in the past couple of years. In Shanghai, as an example, labour cost has risen 11% in 2012, doubling in the previous year, based on Geir Sviggum, managing partner at Wikborg Rein.

Chinese shipbuilders generally provide an edge over building low-end, small anchor handling tug supply (AHTS) vessels and PSVs, while they need to compete to develop medium-sized OSVs. Playing with the high-end, large OSV segment, their quality has yet reach international standards, in line with Christian Bartz-Johannessen, director, RS Platou (Asia).

Industry observers have generally pointed to some five-year period for Chinese OSV builders to narrow their quality gap using the European counterparts. The lack of skilled engineers and the tendency for Chinese yards to obstruct the delivery with the vessels can also be parts of concern because of their prospective clients.