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Global medium-sized shipping companies set off a wave of restructuring!

Views: 8     Author: Site Editor     Publish Time: 2020-11-16      Origin: Site

The continued decline of the newbuilding market has put increasing pressure on medium-sized ship companies. The long-term downturn in new ship orders has not only promoted the integration of the shipbuilding industry, but also prompted shipyards around the world to reconsider their business models.


The latest report released by the Danish Shipping last month pointed out that the proportion of the current fleet (calculated in deadweight tonnage) in hand-held orders has dropped to only 7%, the lowest since 1989. According to the report, global orders for new commercial ships totaled 26.5 million dwt from 2020 to the present, which is close to the level of 2016 (the annual order volume was 30 million dwt). Globally, the total number of orders held by merchant ships is only 150.3 million dwt.


The exhaustion of orders has undoubtedly brought a greater threat to medium-sized ship companies. Japan’s Sanoyas Holdings is the latest victim of this market slump. The company announced on November 9 that it will transfer its wholly-owned shipbuilding subsidiary Sanoyas Shipbuilding (registered capital of 2 billion yen) to Nilaijima Shipbuilding, completely ending the shipbuilding "ancestral industry" that has been operating for more than a century since 1911. It is expected to be completed in March next year. Sanoyas Holdings bluntly stated that the shipbuilding industry cannot avoid a long-term downturn, so it decided to end the shipbuilding business.


Not only Japan, but South Korean medium-sized shipping companies are also facing a crisis. Although South Korea’s large-scale shipbuilding companies have continued to take orders in recent months, and the South Korean shipbuilding industry has also ranked first in the world for four consecutive months, but South Korea’s medium-sized ship companies have been struggling. Data from the Export-Import Bank of Korea shows that the number of orders received by Korean medium-sized shipping companies has been reduced by nearly half this year, and the rate of decline will further accelerate in the second half of the year.


Affected by this, South Korean medium-sized shipbuilding companies ushered in a "sale tide". Following the successful acquisition of Seongdong Shipbuilding and Daxian Shipbuilding, the creditors of Hanjin Heavy Industries and STX Marine Shipbuilding also initiated the sale procedure. On the other hand, the merger and reorganization of the Korean shipbuilding industry is not limited to medium-sized shipbuilding companies. The merger of the two major Korean shipbuilding companies Hyundai Heavy Industries and Daewoo Shipbuilding is also continuing.


The integration of the shipbuilding industry is not limited to Asia. The veteran European shipbuilding company Havyard, a Norwegian shipbuilding group, just announced earlier this month that it would abandon its new shipbuilding business, transform ship repair and maintenance services, and plan to lay off about 100 employees next year. According to Havyard’s plan, its shipyard in Relvik, Norway is currently building 6 new ships, all of which will be delivered in this year and next two years. With the completion of the new ships, the shipyard will gradually shift to ship repair, service and maintenance, And streamline layoffs.


Although Havyard did not completely rule out new shipbuilding activities, the company believes that in the future, the new shipbuilding market and the possibility of obtaining financing for construction projects will face great challenges, while the ship service market will be relatively stable and profitable. Figure. Havyard also warned that the Norwegian shipbuilding industry is facing a serious crisis under the additional challenges brought about by the new coronavirus epidemic and urgently needs more government support measures.


Before the reorganization of Havyard, another medium-sized ship company in Norway, Kleven Verft, initiated bankruptcy procedures in early July this year, and subsequently found a new buyer, the Norwegian ship recycling company Green Yard Group. According to Green Yard’s statement, Kleven Verft Shipyard will continue to operate the shipbuilding business, but at the same time also plans to expand its core competitiveness into new business areas, including ship recycling business.


In addition, the German medium-sized ship company Flensburger Schiffbau-Gesellschaft (FSG) also experienced bankruptcy and reorganization this year and was acquired by the investment company Tennor Holding.

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