Market Analysis:
The Singapore Marine Industry has seen significant growth over the last 40 years, evolving from a small regional ship repair and building centre into a world-class industry that serves international clientele. The industry includes ship repair, shipbuilding, rig building and offshore engineering, and other marine supporting services.
Today, Singapore is one of the world's premier ship repair and ship conversion centres as well as a global leader in the building of jack-up rigs and the conversion of FPSO (Floating Production Storage and Offloading) units. It is also a niche player in the construction of customised and specialised vessels.
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Globally renowned for its reliable and convenient range of comprehensive marine services, Singapore is a one-stop marine centre for ship-owners, managers and agents around the world. Generating an annual turnover of $7 billion and employing some 48,000 workers, the marine industry plays a crucial part in Singapore's economic growth. Ship repair and conversion form the backbone of the local marine industry, accounting for more than half of the total revenue.
Ship Repair and Conversion
Singapore has been firmly established as a major international ship repair centre, particularly for larger vessels and it is recognised for specialised re-construction jobs, which range from conversion to jumboisation. The extensive capabilities in ship repairing means a multitude of repair, reconstruction and conversion jobs can be carried out with high quality and timely delivery. The versatility of local shipyards is reflected in the wide range of ship conversions undertaken. Ship repair is carried out in shipyards and at the anchorage. To meet the needs of ship-owners using the port, voyage repair are readily available on call. Projects include the conversion of car carriers to livestock carriers and tankers to FPSOs, just to name a few. This sector contributes $3.8 billion or slightly over 51% of the industry total
Shipbuilding
Over the years, Singapore shipbuilders have earned a reputation for fair prices, quality workmanship and short delivery time, for a range of specialised and customised vessels. Shipbuilding has progressed from minor projects such as the construction of wooden launches and fishing boats to major projects like steel vessels and specialised ships. Vessels built include cableships, container vessels, product tankers, naval ships, landing ship tanks and patrol crafts. This sector contributes $1.3 billion or 17% of the industry total.
Oil Rigs and Off-shore Platforms
Singapore has captured over 90% of the world’s market in oil rigs and, the offshore sector, which included the construction, repair, upgrading and conversion of offshore units such as jack-up rigs, semi-submersibles, drill-ships, drilling tenders, FPSO and other platform structures, saw an increase in its share of contribution to the industry’s turnover. It contributed $2.4 billion or 32% of the total industry turnover in 2005.
Prospects
With the continuing escalation of oil prices, which hit a peak of US$90 a barrel recently, there is a strong push to go to deeper waters, beyond the continental shelf, to drill and extract oil. Moreover the lifespan (20 years) of existing oil rigs are coming to an end. With little replacements because of the relatively stable price of oil in the past, there is now a pent-up demand for new oil rigs. Prices of oil rigs have gone up from 30 to 50%, whilst lead time to build an oil rig is now one and half years going flat out. The 2 key builders of oil rigs, namely Keppel Offshore & Marine and SembMarine, have back log of orders stretching over the next 3 to 4 years.
For GSH, then, as it is already a key fabricator for Keppel and SembCorp Marine, it should concentrate its business focus to service the oil rig and off-shore platform sector in the marine industry.
