The“Hunger game”of offshore engineering manufacturers

By Xu xiaoli

Against the downturn offshore engineering market, manufacturers and operators have adjusted accordingly their own business in order to address the crisis.

The two powers in Singapore are actively developing their offshore engineering capability. Recently, Keppel offshore marine and SembCorp respectively announced to acquire the American marine engineering equipment design company. Keppel acquired Cameron drilling platform business, including drilling platform design type of Letourneau, workhorse, super gorilla XL and Jaguar, jack up pile leg part, lifting system and equipment supply, and after-sales service business; in addition, SembCorp marine acquired American floating production and drilling equipment design company SPP Offshore, including cylindrical hull design, satellite services for deep-water drilling, production, storage and all other assets. The purchase price is approximately$2100. Furthermore, SembCorp completed the business restructuring in July, and would develop four core businesses: drilling and other floating equipment,maintenance, upgrading, offshore platform and special ships.

“BIG 3”in South Korea fights for survival. For current Samsung heavy industry, the construction of marine equipment caused a lot of financial losses, expanding the industrial chain and reducing the out flow of capital become very important. In September this year, Samsung officially took over Korea sungdong shipbuilding& marine engineering, providing support for sales,purchasing, production and technology. After taking over sungdong shipbuilding & marine engineering, Samsung Heavy Industries can receive more merchant ships to enrich product portfolio, to make up for the great loss caused by project tardiness and the difficulty to get orders in offshore marine engineering industry. At the same time, Hyundai and Daewoo Shipbuilding & Marine are in restructuring. In addition, as one part of the restructuring work, Daewoo will sell the headquarters which is located in the center of Seoul. According to South Korea's official news, the government has asked the Hyundai heavy industry to take over STX shipbuilding, although the Hyundai heavy industry is facing a very serious loss,it is still unknown whether to the financial situation of both sides will be improved after take over.

Is Japan still actively advancing in the marine industry?Due to various reasons, the Japanese shipbuilding industry missed the few most "brilliant" years of development of offshore marine engineering industry.During this period, South Korea developed fast and took the first place in marine manufacturing and shipbuilding industry. In fact, Japan has been taking actions in the field of offshore engineering, it had entered into the FPSO field long time ago, and established a long-term cooperative relationship with the Brazil oil. But the shipbuilding industry in Japan, which always chases excellence and mass production, has not entered into the offshore marine engineering industry, a higher level of customization industry, to a large extent.

However, Japan did not give up the marine industry,and are making a lot of efforts even at present when the offshore engineering market faces many difficulties.In April this year, in order to expand the marine sector business, Japan joint shipbuilding (JMU) began to recombine marine engineering and technology sectors and set up a special team with six working subgroups including “platform group, marine floating body group,the group of new energy business, solve scheme group,machine assembly, motor meter assembly”. In addition,Mitsui shipbuilding recently purchased 99.36% stake of TEG marine in German, transactions amounting to about$164 million euro, to extend its project and construction supervision business ability in LNG related equipment industry.

Chinese shipyard staged the “song of ice and fire”.Some strong companies are taking advantage of this opportunity to actively expand the industrial chain,enhance the technical reserves. In April, China Southern Rail (CSR) purchased British deep-sea equipment enterprise specialist machine Developments Limited(SMD), formally entered the marine deep-water equipment field. In August, CIMC Enric purchased Nantong Pacific sea industry and trade company with 700 million Yuan RMB, to help CIMC construct sea land integration of natural gas purification, liquefaction,storage and transport capacity. Of course, only a few can expand under the current condition, most Chinese shipyards are still facing brutal survival test.

The end of “Hunger Game” is coming soon. Let's wait and see who will prevail after the darkness before the dawn and become the winner.