The deeper the better
Korean and Singaporean yards have adapted well to China's challenge
PLENTY of behemoths are being welded into shape in South Korea's shipyards at the moment.
Clustered around the southern city of Busan, the big three yards—Samsung Heavy Industries, Daewoo Shipbuilding and Marine Engineering, and Hyundai Heavy Industries—are churning out the world's biggest container ships, 400 metres long; an oil barge whose length, at about 460 metres, or 1,462 feet, is almost half the height of Scafell Pike, England's tallest mountain;
and some of the largest oil rigs yet built.
But size isn't everything.
Just as impressive, and more important commercially, are four ultra deepwater drill-ships coming off the line at Samsung Heavy Industries.
Commissioned by a Danish shipping giant, Maersk, the first one has just been christened: Viking, appropriately enough.
Described by a Maersk engineer as giant Black & Deckers, these ships are designed for work in the deepest of waters, such as in the Gulf of Mexico.
As inland and coastal wells run dry after decades of exploitation, oil firms are being forced farther out to sea, and ships like Viking, which will be used by Exxon Mobil, are designed to meet their requirements.
Viking can operate in 3,000 metres of water, and then drill down through another 12,000 metres of earth—more than the height of Mount Everest.
The centrepiece of the vessel is the derrick, which is over 60 metres high.
But the most advanced bits of kit are probably the six thruster engines.
The engineers claim that they can keep the ship steady and drilling even in waves of up to 9 metres.
Strong technical skills have proved to be the salvation of Korean shipyards.
Only a decade or so ago most analysts were assuming that China's heavily subsidised yards would soon take much if not all of South Korea's share of the world shipbuilding market, just as South Korean yards had wiped out much of Europe's capacity a generation before.
But it has not worked out like that.
It is true that China now gets more orders in terms of gross tonnage, but in the year to July 2013 South Korea produced 76.2% more than China by dollar value.
The Koreans, and their Singaporean counterparts, are making money in a highly competitive market by focusing on complex vessels like Viking, often for the offshore market.
China has failed to break out of the basic bulk-carrier market, where ships may cost as little as 30m.
As a result it is China's yards that are struggling, confined to a part of the market that is plagued by overcapacity, whereas Korean and Singaporean order books are almost full. Maersk reckons the market for offshore rigs and drill-ships is now worth 44 billion a year.
Sokje Lee, an analyst at J.P. Morgan in Seoul, explains that shipbuilding is nowadays a design and quality business rather than a labour-driven one,
and South Korean firms, once a lower-cost alternative to their European rivals, have spent heavily and wisely in becoming more technically sophisticated.
Each of the big Korean yards has thousands of in-house designers and engineers.
This has made them world leaders in the new generation of fuel-efficient, cheap-to-run eco ships.
China's yards have focused instead on offering customers low prices and irresistible financing deals.
Sometimes they demand as little as 10% of the cost on signing a contract, leaving the other 90% until delivery.
Yet this ruthless competitiveness has not won them a decent share of the lucrative offshore market.
Here quality, efficiency and sticking to delivery dates are at a premium, and Chinese yards still score poorly on all counts.
A recent report from CLSA, a stockbroker, concludes that China is still far behind the Koreans in the market for offshore vessels.
Even worse, China will soon lose much of its advantage on price.
CLSA estimates that labour costs in its yards are rising by 10-15% a year, while productivity remains low.
Singapore's two main yards, Keppel and SembCorp Marine, have also invested heavily in quality and efficiency.
They specialise more in deep-sea rigs than in drill-ships and carriers.
Keppel, the bigger of the two, is building a record 20 such monsters this year; next year it will deliver the first of three giant, 600m jack-up rigs.
Time is money
The Singaporeans are also good at building things on time, which is vital in an industry where late delivery can cost the operators of rigs and drill-ships over 500,000 a day.
Over the past five years, rigs ordered from Keppel and SembCorp were, on average, delivered ahead of schedule, whereas Chinese yards delivered 50-250 days late, says IHS Petrodata, a research firm.
The only cloud on the horizon for the Koreans and Singaporeans might be fracking.
The output of tight oil from onshore shale beds has soared in the past few years, especially in America, and could one day reduce the demand for expensive deep-sea rigs and vessels.
Indeed, Mr Lee even suggests that the offshore business might already have peaked.
But Keppel, for one, is not too worried.
The demand for oil has so far kept rising; and as long as the crude price is above 80 a barrel, the big oil firms will have the money and the incentive to keep developing deepwater fields, and thus to keep ordering its rigs.
1.adapt to 变得习惯于…， 使适应于， 能应付
So how do you adapt to these constants?
Keeping trade going will therefore help countries adapt to climate change.
2.come off 成功；举行；表现
In the heat of battle, which banks have come off best?
If you come off as too needy you'll lose her.
3.such as 例如；譬如；诸如
What about future steps such as euro bonds?
Imaginary problems such as these are usually hiding real ones.
4.design to 用于设计
We can use design to make a website unique and more memorable.
Note:marriott has recently changed their design to be more like westin.