18 Jul 2018

Read our article on Seaview magazine

Last year the Chinese orderbook hit US$10.2 billion and 290 vessels, easily beating Korea to take first place in terms of the share of global orders. The volume of new orders was up nearly 30 percent year on year despite the challenging market. The picture looks positive at first glance – but this success will not last long unless we take bold steps to modernise our technology and communication. At AVIC Weihai Shipyard, we are already taking those steps and already seeing the benefits.

Chinese shipyards are attractive for many reasons. They are numerous and enjoy the support of the Chinese government and banks. They still have relatively low labour costs and the workers keep to demanding schedules. They are particularly skilled at painting and working with steel. Shipyards are importing more and more cutting-edge equipment in order to achieve high quality with even the biggest vessels. The yards are also flexible in terms of accepting owners’ changes during construction.

Yet what Chinese yards have not traditionally been known for is building technologically advanced ships. Perhaps that is why Korea’s 2017 investment figure of US$11.8 billion was higher than China’s, despite the much lower orderbook. And there are many challenges ahead, even in the bulk carrier market. Labour and steel costs are rising and competition is increasing. It will be a tough market for Chinese shipyards who do not invest in next-generation shipbuilding technologies and upgrading industrial competence.

Our strategy at AVIC Weihai Shipyard, which is supported by our main shareholders AVIC Ship and Weihai local government, has several related strands. Firstly, we are transitioning from building traditional bulk carriers to ro-ro and ro-pax vessels. The global ro-ro fleet is ageing and will need replacing to comply with new standards. Regional economic growth is also driving demand. The next generation of vessels will need more efficient and environmentally friendly designs, integrating intelligent systems for cargo handling, safety and navigation.

In order to be successful in the ro-ro market, we have planned strong investment in digital technologies such as an upgraded shipyard management system and 3D software to optimise ship design. We plan to introduce more robots to automate assembly lines, improve production efficiency and perform more thorough quality controls. In addition to introducing more automation, we also have plans to upgrade the skills of our workforce through targeted, specialised training in particular areas. Finally, we are also developing more integrated supply chains.

Better integration goes hand in hand with stronger cooperation and collaboration. I predict that Chinese companies will increasingly specialise and form cooperative networks. This will help us all become more advanced and more globally competitive. Yet an important part of my job is also building and maintaining relationships with third parties and subcontractors worldwide. Complex shipbuilding projects require a lot of communication between ship designers, shipowners, classification societies, engineers, technical experts, managers, suppliers and more. Without broad and open cooperation, it will be difficult to execute these ambitious projects smoothly and on time. We recognise the value of gathering expertise from all over the world. For example, we acquired Finnish design and engineering firm Deltamarin in 2013 to enhance our ship design capabilities, particularly in terms of sustainability and efficiency.

Our strategy and our open approach to collaboration are already bearing fruit. For example, we recently launched the Rosa dei Venti, a modern, fuel-efficient and environmentally friendly 2,500 lane metre ro-ro carrier for cars and trucks. Classed by RINA, she has the largest stern ramp in the world for efficient loading and discharging, an optimised hull form and a scrubber system to control SOx emissions. We look forward to seeing her operate worldwide for Italian shipping company Visentini Giovanni Trasporti Fluviomarittimi.

Our cooperation with RINA on several different projects, including bulk carriers and ro-ro ships for European owners, has been a really good experience. We have received a lot of support for plan approvals and site surveys. RINA’s training on rules and standards, along with their efficient plan approval in China and their smooth communication with shipyard engineers, are really valuable.

It is with support and collaboration like this that we – and other Chinese shipyards who follow similar strategies – will continue to expand our shipbuilding capabilities and reputation in the future.