| Korea’s STX Group plans to list part of its European unit in Singapore to raise up to Won700bn ($633m), as the global shipping industry shows signs of a recovery. The listing comes two years after the South Korean company took over Norway’s Aker Yards, Europe’s biggest shipbuilder, for Won1400bn. Aker Yards has been renamed STX Europe. STX Offshore & Specialised Vessels (STX OSV), part of STX Europe, will start trading in Singapore next week after taking subscriptions this week. Goldman Sachs is the sole bookrunner for the IPO. “The performance of STX Europe is improving after some difficulty last year,” said Lee Sung-hee, an STX spokesman. “STX OSV has continued to win orders despite the industry’s downcycle.” Although the global shipbuilding industry still grapples with overcapacity amid stiff competition, leading Korean shipbuilders are receiving new orders this year after a severe downturn last year. STX Europe suffered a Won77.1bn operating loss last year but it swung to an Won11bn operating profit in the first half of this year. Its offshore and specialised vessels division has received new orders of $2.2bn so far this year. “Investors’ response to the IPO will not be bad as the shipping industry is bottoming out,” said Sung Ki-jong, an analyst at Daewoo Securities. On the back of the recovery in the shipping industry, some Asian shipbuilders are rushing to go public. China Rongsheng Heavy Industries, one of China’s largest shipbuilders, is planning a public offering in Hong Kong this month to raise as much as $2.6bn. STX OSV will be one of the few Korean companies to be listed in Singapore, which has offered to take over Australia’s stock exchange in a deal worth about A$8.1bn ($8.1bn). STX said that it chose Singapore for the listing because the country has a well-developed shipbuilding industry and it is a “familiar” market to the group as it has another unit, STX Pan Ocean, already listed there. STX Group has been on an aggressive acquisition trail in recent years and built a shipyard in Dalian, becoming one of the few foreign companies to own a yard in China. The company is expected to use the money raised from the IPO for debt repayment and other operational purposes. KOMEC QR CODE / KOMEC Blog QR CODE Click Here Global Brand A/S Hub of Marine Equipment |
| SINGAPORE, Nov 18 (Reuters) - China's shipbuilding industry, holder of the world's largest orderbook, will see dozens of small shipyards go under or get taken over next year, as a choppy wave of consolidation rocks an oversupplied market. Fuelled by vigorous government support and cheap labour, the number of shipyards has grown exponentially in the past decade in China, reflecting its role as the world's top exporter and one of the biggest buyers of foreign oil, iron ore and grains. But many small shipyards face a bleak year in 2011 as growing numbers of clients cancel orders to avoid floating unchartered vessels, and Beijing tightens credit in its fight to rein in inflation. "There are too many shipyards. For the next couple of years, a number of them won't be able to survive on their own," Robert Lorenz-Meyer, president of BIMCO, the world's largest shipowners' grouping, told Reuters. "There will be consolidation, but hopefully some yards will re-focus on scrapping," he added. China has more than 2000 registered shipyards across its coastal region, with around 250 in the export business, Lloyd's Register says. By the end of the year, that number could be trimmed by more than a hundred, leaving a leaner industry able to better compete with more experienced shipbuilders in South Korea and Japan. "Dozens, if not hundreds, of small shipyards won't make it to the end of next year. The big companies will either take them over or they will just disappear," said an executive with an Asian shipping company, who asked not to be named. TIGHTENING CREDIT Small to medium-sized Chinese shipyards were seen to be the most vulnerable to takeovers as credit becomes harder to obtain. China's central bank increased reserve requirements by half a percentage point last week, putting a brake on a lending spree launched two years ago that helped inflate shipyard numbers. "The small shipyards are vastly different from the publicly listed companies who have the backing of China's banks and government," said Jung Shin, analyst at HSBC in Hong Kong. "China can't just waste taxpayers' money on saving underperforming shipyards. They will be quite selective." The global freight industry has yet to recover from pre-crisis levels due to its buying spree just before the economic downturn two years ago, which caused a significant decline in seaborne trade. The current orderbook represented around 25 percent of the current fleet, down from 50 percent in late 2008 due to cancellations and delays. Still, as much as 40 percent of orders due for delivery next year were expected to be postponed or cancelled, analysts said. China has an orderbook of at least 3000 vessels, or more than 35 percent of the world's total, double the number of its nearest competitor South Korea, BIMCO and shipbroker Clarksons say. Besides the cancellations, small shipyards have also faced wage increases of around 10 percent since the start of 2010 and a slowly rising local currency, said Dong Qiang, vice president of China Shipbuilding Industry Corp. (CSIC). China released its currency from a de facto peg to the U.S. dollar in June, but has permitted the yuan to strengthen less than 3 percent since. A stronger yuan cuts into profits of Chinese shipbuilders who sell their product overseas in dollars and euros. GLOBAL TREND Consolidation will ripple through the sector worldwide, not just in China. Acquisitions and joint ventures were seen picking up next year as international shipping firms look to expand operations, eyeing smaller counterparts weakened by the global financial crisis. A survey by law firm Norton Rose last week showed 60 percent of the 177 shipping firms polled were planning joint ventures and 58 percent looking at strategic acquisitions in the next 12 months. China was identified as a key area of investment. Beijing was likely to favour consolidation between domestic companies instead of foreign firms to ensure protection of thousands of jobs, industry experts said. Chinese employed in the transport manufacturing sector, which includes shipping, automobiles and airline makers, numbered 4.7 million in 2009, versus 2.8 million a decade ago, official data show. "Shipbuilding is extremely labour-intensive and China, of course, fears social unrest coming from unemployment," said Lorenz-Meyer. A leaner sector will help China easily attain its goal of becoming the world's largest ship maker by 2015 at the expense of rivals South Korea and Japan, many analysts say. "China will be on top for sometime," said Shin. "The quality of ships is improving and they are still offering discounts of 10 to 15 percent below South Korea." Those advantages will persist, thanks to the higher government subsidies and cheaper labour than competitors enjoy. China's biggest fish -- shipyards such as powerhouses CSIC, state-owned China State Shipbuilding Corp. (CSSC), and Guangzhou Shipyard International -- are expected to thrive in the Darwinian environment. Major shipbuilder Rongsheng Heavy Industries Group Holdings this month raised its IPO size by nearly half to $1.8 billion, fuelled by strong demand, with its listing set for Friday. (Additional reporting by Jonathan Saul in London) (Editing by Clarence Fernandez) |
The world's largest shipbuilding and plant-related software firm, Aveva
of the U.K., learned of KT's 'Wibro (Mobile Internet) Shipyard Service' and invited Korea's largest telecoms provider to the 'Aveva World Summit' held October 26-28 in Beijing, China, as a special lecturer on the global IT-fusion success practice.
KT's 'Wibro Shipyard' service enables the exchange of related data, including drawings, as well as communication between workers who working in different parts of the shipyard utilizing a Wibro network and netbooks. In the past, workers could send and receive only simple messages via mobile phones. But when revising complicated data, including drawings, they had to meet face-to-face despite the amount of time it took.
Aveva decided to disseminate KTs' Wibro Shipyard service to its customers and also study how related new technologies could be applied at global sites.
The 'Aveva World Summit' is an annual international forum to which Aveva, having a 90% market share in the world's shipbuilding and plant software sector, invites its customers from around the world to showcase its next-generation technologies. It was particularly unprecedented for Aveva to introduce the practice of an industry outside the shipbuilding and plant sectors.
About 300 related officials from shipbuilders like Mitsui Engineering & Shipbuilding, etc., plant companies, including ABB of Switzerland, construction firms such as Willy Parsons of Australia, and domestic companies, including Samsung Heavy Industries, STX, and GS E&C, participated in the Aveva World Summit.
From KT, Deputy General Manager of GTM (GotToMarket) Lee Jong Hoon, in charge of the Wibro Shipyard Project Team, gave a presentation at the event on the theme 'Smart Shipyards.' He introduced the IT-fusion success practices that allowed a telecommunications firm to enhance the value of traditional industries based on its network. The reference projects that Lee cited were a smartphone subway rail remote monitoring service as well as the Wibro shipyard of Hyundai Heavy Industries.
Director Kang Ji-Won of Aveva Korea said that with KT's Wibro Shipyard becoming widely known at home and abroad, he had received instructions from Aveva's head office in the U.K. to invite IT to the event. He explained, "If KT's practices of grafting communications technologies with other industries are introduced in the shipbuilding and plant industries on a broad scale, I believe that it will open a new era."
With the Beijing event as momentum, KT decided to make inroads into the global shipbuilding and plant markets by promoting its IT fusion services.
KT's Deputy General Manager Lee added, "During my lecture, I senses the strong passion of the audience. Proposals for diverse cooperation including global projects emerged." He also found that the participants' interest in Korea's native mobile communications technology, Wibro, which has received more or less poor recognition at home, was also high.
Director Kang of Aveva Korea delivered the news, "As the interest of our customer companies is high, there is a possibility that the Aveva head office may promote a wide variety of related projects."
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