Marine engineering industry booms in China

A number of recent deals have highlighted a boom in the marine engineering industry in China, as the country is increasingly meeting global demand for equipment to prospect and exploit oil resources at sea.

Cosco (Dalian) Shipyard this week marked its third major contract with a foreign company this year, when a drilling rig construction deal worth 180 million U.S. dollars came into force.

The construction of a platform support vessel for a Dutch firm also began on Monday in a Cosco Shipyard plant in southern Guangdong Province.

Currently, more than 30 marine engineering construction projects are under way in its branches in Dalian, Nantong, Zhoushan, Guangdong and Shanghai, said Wang Yuhang, president of Cosco Shipyard.

And the company's marine engineering business is expected to see a sales revenue of 8.5 billion yuan (1.38 billion U.S.dollars) this year and 14 billion yuan next year, according to Wang.

After the global financial crisis dealt a blow to the shipbuilding industry, maritime engineering has accounted for more than half of the company's overall businesses, compared with about 7 percent five years ago.

"The marine engineering industry has grown very fast over the past two years in China. There is a trend for global marine engineering to shift to China," said Wang.

China and Brazil have shown strong prospects in this respect, although the Republic of Korea (ROK) and Singapore together occupy more than 60 percent of the global market share, the Cosco president noted.

China's strong shipbuilding capabilities have laid a good foundation for the marine engineering sector. Demand for marine engineering equipment has been sizeable thanks to robust prospecting and exploitation of maritime oil resources around the world.

"The building center of jack-up drilling rigs is shifting to China, which has already demonstrated the strength to compete with large global shipbuilding companies," said Yin Xuelin, general manager of Dalian Shipbuilding Industry Offshore Co., Ltd, based in northeast China's coastal city of Dalian.

In the first eight months of 2013, 49 rig deals were reached worldwide, with China to build 28 of the contracted rigs. The number exceeded that of Singapore for the first time, according to Yin.

With jack-up drilling rigs as major products, Dalian Shipbuilding Industry Offshore Co. has orders for 20 rigs. The company's revenue increased to 7 billion yuan last year from two billion yuan in 2009.

Wang believes that major Chinese shipyards' achievements in high-tech equipment show the country has the qualifications to also develop high-end marine engineering equipment, and he predicted that the ROK and Singapore will soon face challenges in this field.