Author Topic: Frigate Acquisition Project included provisions for local production  (Read 11478 times)

adroth

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Administrator's note: Companion thread on the forum's FB extension available here

=====

One aspect of the Frigate Acquisition Project that appears to have been ignored in various discussions are the Self-Reliant Defense Posture provisions in the requirements. Details are available in the Supplemental Bid Bulletin #PN-FAP-06-01



The clearest statement of intent is on Section 22 page 66 which contains the following stipulation



This short provision, placed in the latter portion of the document, can be used interpret and/or highlight other sections of the document whose wording isn't overtly pro SRDP

The following are examples of sections that are clearly in support of domestic support.

Section 20, Page 53




SRDP related options are as obvious in Section 22, page 63. Note how construction plans are required as part of the requirements. Access to the schematics, combined with a requirement to either transfer the design, or allow us to produce the vessel under license . . .

. . . means that the next Frigates could very well be locally built.

 

 
« Last Edit: April 12, 2018, 02:55:38 AM by adroth »

adroth

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As things currently stand, there are already a plethora of legislative support for this activity.

Basis in law

Incremental efforts, from the Ramos to the Arroyo administration have created a legal framework that actually reduces the legislative ground work that the Duterte administration needs to perform to implement the proposals listed above. The unprecedented volume of purchases completed or initiated during the Aquino administration is -- in truth -- a net effect of the efforts that have come before. There is, therefore, no legal or procedural impediment to continuation of the current trend.

The AFP modernization law explicitly favors locally-manufactured defense articles:

Quote
Sec. 10. Self-Reliant Defense Posture Program. — (a) In implementing the modernization program, the AFP shall, as far as practicable, give  preference to Filipino contractors  and suppliers or to foreign contractors or suppliers willing and able to locate a substantial portion of, if not the entire, production process of the term(s) involved,  within the Philippines .

(b) In order to reduce foreign exchange outflow, generate local employment opportunities and enhance technology transfer to the Philippines, the Secretary of National Defense shall, as far as feasible, incorporate in each contract/agreement special  foreign exchange reduction  schemes such as countertrade, in country manufacture, co-production , or other innovative arrangements or combinations thereof.

(c) The AFP likewise ensure that in negotiating all applicable contracts or agreements, provisions are incorporated respecting the  transfer to the AFP of the principal technology  involved as well as the training of AFP personnel to operate and maintain such equipment or technology.
The "spirit of the law" favors a Filipino-First procurement scheme.

As things currently stand, all pending acquisitions are required to have a local Philippine partner. A requirement enshrined in the Carlos Garcia-era Republic Act 5183 prohibits the Philippine government from sourcing items from companies that aren’t majority Filipino owned. This means that any foreign vendor seeking to sell its wares to the AFP needs to establish arrangements with Philippine business entities, which will then be responsible for representing the vendor in public biddings and similar engagements.

The legal framework for domestic windfall from the billions of pesos slated for defense expenditure for already-ongoing projects is already in-place. All that a prospective Secretary of National Defense, Chief of Staff AFP, or defense adviser would need do is to highlight this prospectively unaware policy makers within a Duterte cabinet.[/size]

The question now is:

How can the DND-AFP operationalize the intent of the law AND this already-signed deal?

adroth

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Before anyone says “We have many shipyards in the Philippines that can build these frigates”, we need a reality check about which of these shipyards are TRULY Philippine yards, and which ones are actually foreign owned, meant for foreign customers, that just happen to be in the PH.

Dr. Demented maintains that thread index:

http://defenseph.net/drp/index.php?topic=1854.msg5442#msg5442

This is a list of links and references regarding the Philippine shipbuilding industry.  Included are other useful articles, since the topic of the Philippines building its own warships frequently comes up in both the forum and the group.


General articles
Incat Crowther --  this is the design for two 50 meter multi-mission response vessels under construction for BFAR by Josefa Slipways, Navotas:  http://www.incatcrowther.com/product/ic14157-50m-multi-mission-vessel
"Shipbuilding and Ship Repair in the Philippines" by Thomas Wissmanhttps://www.linkedin.com/pulse/20140915171127-13381246-shipbuilding-and-ship-repair-in-the-philippines
"Differences Between Military and Commercial Shipbuilding" by the Rand Corporation:  http://www.rand.org/content/dam/rand/pubs/monographs/2005/RAND_MG236.pdf
Maritime Industry Authority -- List of Registered Shipyards in the Maritime Regional Offices:  http://www.marina.gov.ph/reports/sectoral/List%20of%20registered%20Shipyards%20MRO1.pdf






Domestic Shipyards
Herma Shipyards, Mariveles, Bataan:  http://www.hermashipyard.com/
Philippine Iron Construction and Marine Works (did the actual construction of BRP Tagabanua in conjunction with Propmech):  http://www.picmw.com/
Colorado Shipyard, Consolacion, Cebu:  http://www.coloradoshipyard.com/
Josefa Slipways, Navotas (currently building two multi-mission response vessels for BFAR):  http://www.josefaslipwaysinc.com/
Propmech Corporation (builders of the MPACs):  http://www.propmech.com/home.html
Santiago Shipyard, Consolacion, Cebu:  https://www.santiagoshipyard.com/
Subic Drydock Corporation -- uses the facilities of the former US Navy base at Subic Bay:  http://www.subicdock.com/Home.aspx
Frabelle Shipyard, Navotas -- no website.  Ship repair. 



Foreign-owned shipyards
Austal Cebu -- while the parent company is the builder of the Independence class LCS and other warships, Austal Cebu is the company's hub for most of its commercial ship construction:  http://philippines.austal.com/
Hanjin Heavy Industries, Subic:  http://www.hanjinsc.com/eng/biz/ship/subic.aspx
Keppel Philippines -- shipyards in both Batangas and Subic:  http://www.keppelom.com/en/content.aspx?sid=2773
Tsuneishi Heavy Industries Cebuhttp://www.thici.com/
« Last Edit: April 09, 2018, 06:35:48 AM by adroth »

adroth

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What design would the winning bidder sign up to hand over, or license, to us? Let's go back to the specs

     


====


When South Korea's Hyundai Heavy Industries won the FAP bid over India's Garden Reach Ship Builders, due to issues with the latter's financial capacity, it not only meant that the PN would get two brand-new Frigates from South Korea . . .

. . . it also meant that the Philippines would acquire the OPTION to produce follow-on frigates by itself.

The ship that HHI submitted for the project is based on its HDF-3000 design. A article from Janes.com about this is available below.

From Jane's Defense:

http://www.janes.com/article/64864/hyundai-discloses-further-details-of-philippine-navy-s-new-frigates

Hyundai discloses further details of Philippine Navy's new frigates
Ridzwan Rahmat, Singapore - IHS Jane's Navy International
24 October 2016

Key Points

Hyundai Heavy Industries has revealed further details of the two frigates that it will build for the Philippine Navy
The platform is slightly smaller than anticipated, but said to inherit main design features of South Korea's Incheon class

< Edited >

The company was previously reported to have won the contract with a design based on the company's HDF-3000 multipurpose frigate design, which features an overall length of 114.3 m, and has been used as the basis for the Republic of Korea Navy's (RoKN's) Incheon (FFX-I)-class guided-missile frigates.


HHI's representation of this ship on its website appears below.

https://english.hhi.co.kr/biz/special_over

« Last Edit: April 12, 2018, 09:33:51 AM by adroth »

adroth

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Having the OPTION to build . . .

. . . doesn't mean that we CAN . . .

. . . or even if we SHOULD.

It's one thing to establish a shipbuilding industry. It's a whole matter to keep it viable. Domestic production requires a national COMMITMENT to retaining whatever jobs are created, and continuing to improve capabilities to keep abreast of technological change. That is why military shipbuilding nations the world over are forced to retire ships that would otherwise have remained serviceable to ensure that shipyards don't run out of orders.

The Royal Navy is an example. Note how young HMS Ocean was before they had to retire it to make way for construction of the QEB carriers.

MoD sells Royal Navy flagship HMS Ocean to Brazil for £84m
 Hannah Boland
17 FEBRUARY 2018 • 12:01AM

https://www.telegraph.co.uk/business/2018/02/17/mod-sells-royal-navy-flagship-hms-ocean-brazil-84m/

The Ministry of Defence has sold the Royal Navy flagship, HMS Ocean, to Brazil for around £84m, in a bid to plug a major funding black hole in its accounts.

HMS Ocean had already been due to be decommissioned later this year and be replaced by HMS Queen Elizabeth as the UK's new flagship.

The 22,000-ton vessel, which entered service in 1998, provided hurricane support in the Caribbean last year and played a key security role in the London 2012 Olympics.

< Edited >

Could HMS Ocean find its next steward in the Asia-Pacific?

By Robert Farley
April 14, 2017

It looks as if HMS Ocean is for sale.

Constructed between 1993 and 1998, HMS Ocean has served as the Royal Navy’s primary amphibious assault ship since commissioning. She displaces 21,000 tons, makes 18 knots, and can carry up to 18 helicopters. She also has facilities for carrying and deploying boats, marines, and ground vehicles. In short, HMS Ocean is a fairly standard big, flat-decked amphibious warship, with a decent amount of wear and tear but also with some years left in her service window. The Royal Navy expects to need her less in anticipation of the completion of its two new large carriers, HMS Queen Elizabeth and HMS Prince of Wales.[/size]




Here is food for thought from one of our resident Singaporean navy pros.

Shipbuilding is cyclical and capital intensive, and this is even more pronounced in naval shipbuilding. DMSE's recent cash flow issues makes it amply clear that having the world's best shipbuilding industry does not change this.

Policymakers need to be cognizant of this fact and not try to paint it as a convenient election tool for jobs creation or industry development, which are side benefits. (Reference Australian naval shipbuilding and their Government's attempt to keep capabilities during the lull periods).

For most countries, naval shipbuilding is a strategic capability, maintained and kept at a high cost.

Part 1 complete. To be continued in Part 2.

« Last Edit: April 09, 2018, 01:47:34 PM by adroth »

adroth

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Thus far . . . discussions on the companion discussion on the FB extension are of the short-sighted variety :-(

https://www.facebook.com/groups/rpdefense/permalink/1630761920342982/


adroth

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The Youtube link below is what the DRP group post was referring to.

https://youtu.be/8ehq5K6y65I



From: https://www.facebook.com/groups/rpdefense/permalink/1632054330213741/

« Last Edit: April 12, 2018, 09:05:07 AM by adroth »

adroth

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Typical triumphalism in the face of proven challenges.

From another group: https://www.facebook.com/groups/343072135746967/permalink/1620191341368367/



« Last Edit: April 12, 2018, 09:05:32 AM by adroth »

horge

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JM2P on a slight tangent:

Granted that for the yards to get regular orders from wealthy powers, the
wealthy powers' turnover/replacement rate on naval assets has to be fairly
rapid; and that one of the lubricants aiding turnover rate is EDA disposal.

I feel context is everything.
In a booming world economy, it can make more sense for PH to buy EDA,
because wealthier powers have more wherewithal to replace .mil assets
sooner (thus PH potentially gets younger assets at a great price), but the
same booming economy makes Filipinos think they deserve better than just
secondhand goods.*

In a global recession, it can make more sense for PH to acquire new builds,
because wealthier powers tighten belts and hold onto.mil assets longer, so
that their EDA is very worn down indeed, approaching BER status, and also
has these powers asking more money for their junk. However that same
recession also has Filipinos fearful of spending properly to get good materiel.


*remember the Asian Economic Boom and the hilarious circle-fuck involving
embargoed Pakistani Peace Gate II Block 15 OCU Falcons which were opposed
by Filipino know-it-alls in '95 (because "we deserve better", lol), which soon
degenerated post Asian Economic Crash into a three-way attempt to get aged
Kiwi Kahus, but then decomposed further into discard F-5's?

« Last Edit: April 13, 2018, 07:00:36 AM by horge »

mamiyapis

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Re: Frigate Acquisition Project included provisions for local production
« Reply #10 on: April 13, 2018, 08:45:01 AM »
Well the sh*t-pile always rolls downhill once enough crap is added on top of it. LoL @ "We deserve better" Pinoys on the OCU Block 15 Falcons in freakin' 1995. Those would have been almost backlot fresh by that time.

adroth

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Re: Frigate Acquisition Project included provisions for local production
« Reply #11 on: April 13, 2018, 09:03:31 AM »
Well the sh*t-pile always rolls downhill once enough crap is added on top of it. LoL @ "We deserve better" Pinoys on the OCU Block 15 Falcons in freakin' 1995. Those would have been almost backlot fresh by that time.

"Don't let 'great' be the enemy of 'good' "

horge

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Re: Frigate Acquisition Project included provisions for local production
« Reply #12 on: April 15, 2018, 03:22:13 PM »
In any case, the point I was skirting concentrically is that local yards cannot be sustained by
locally meeting the new-build requirements of the PN, PCG, DENR, etc: insufficient mass kasi,
even if we were to assume that all PN vessels would henceforth be built locally, kulang ang
volume to justify the capital infusion for upgrading yard facilities to allow frigate-plus warship
construction, and much more importantly, to justify the financing behind said infusion, and
the financing behind the local-building of the vessels themselves.[1]

The servicing of PN, PCG, DENR, etc. vessels can be a more stable economic base for PH
local yards to survive (or even thrive) on, and this consideration stands independent of where
the ships were built, or whether they were acquired new vs. EDA.[2] Additional capitalization of
local yards (if necessary) is also much smaller than if the object was to BUILD frigates, rather
than service them.

For some people, the *pride* to be felt in building our own frigates is an end, all by itself.

For me, not so:
Enemy states aside, I don't specially care WHERE the ships are built, so long as they are
on-budget, meet spec, and said spec serves the mission of the PN. I'd prefer that our local
yards have work, so that their employees keep their jobs... but if local yards can't find/do
enough work, e, law of nature na yan: matira na lang ang talagang matibay.

JM2




[1] If there is no credit facility, nothing gets built: no shipyard will front the cost of labor, materials
(dear God, the 'materials'), subcons and consultancies on a promise that PH.gov will eventually
pay up, X years later. Even if it isn't turnkey, the usual delays in a progress-billing format are as
if death to a yard that doesn't secure credit backing: loans + loan-guarantees are the PRUDENT
order of the day when it comes to local yards contemplating new-builds, and who is going to back
local yards to the tune of tens of PHP billions when the client (PH.gov) is such a colossal dick-bag
when it comes to change-orders in defiance of contract, and (again) making contract payments?

[2] Although, conceptually, going with EDA may promise more (servicing) work for the local yards
than going with new builds.
« Last Edit: April 15, 2018, 03:33:34 PM by horge »

adroth

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Re: Frigate Acquisition Project included provisions for local production
« Reply #13 on: April 15, 2018, 05:31:02 PM »
In any case, the point I was skirting concentrically is that local yards cannot be sustained by
locally meeting the new-build requirements of the PN, PCG, DENR, etc: insufficient mass kasi,
even if we were to assume that all PN vessels would henceforth be built locally, kulang ang
volume to justify the capital infusion for upgrading yard facilities to allow frigate-plus warship
construction, and much more importantly, to justify the financing behind said infusion, and
the financing behind the local-building of the vessels themselves.[1]

Totally agree. Hence the focus on the "should we even try" question from the get-go. More below.

Quote
The servicing of PN, PCG, DENR, etc. vessels can be a more stable economic base for PH
local yards to survive (or even thrive) on, and this consideration stands independent of where
the ships were built, or whether they were acquired new vs. EDA.[2] Additional capitalization of
local yards (if necessary) is also much smaller than if the object was to BUILD frigates, rather
than service them.

Am in complete agreement again.

Integral to the Frigate acquisition project is the development of domestic servicing capability. Exactly how that is implemented is not laid out in the SBB. If you go by the wording of the bulletin, it actually sounds as though the PN shifted the burden for figuring out how to put all of that together upon the vendor.

One would hope that NAVSHIPS eventually gets recapitalized and figures out what it can do by itself, and how to -- encourage -- the shipyard industry to beef up their skillsets to provide rotating servicing responsibilities. Not unlike how NASA promoted creation of a commercial space re-supply industry industry in support of the ISS (the Russians and Elon Musk aren't actually the only ones playing in this space).

Quote
For me, not so:
Enemy states aside, I don't specially care WHERE the ships are built, so long as they are
on-budget, meet spec, and said spec serves the mission of the PN. I'd prefer that our local
yards have work, so that their employees keep their jobs... but if local yards can't find/do
enough work, e, law of nature na yan: matira na lang ang talagang matibay.

JM2

If we are to only focus on the here and now . . . and the needs of the DND alone . . . am total agreement yet again.

Quote
For some people, the *pride* to be felt in building our own frigates is an end, all by itself.

"Pride" is like nitro-glycerin. If you let it get away from you, the result will be catastrophic. Harnessed properly . . . it could spell: "opportunity".

If we ever build our own Frigate-sized ships, we face the following courses of action:

a. We must somehow design ships that merit attention in an already-crowded shipbuilding market

b. Take our cue from the USN and the Royal Navy and ignore cost considerations and build them ourselves just to keep yards alive as a matter of national security

I maintain that it does NOT make sense to build our own Frigate-sized ships today. Not with the way the DND-AFP manages its projects. Not with SRDP structured the way it is. Not with the way the shipbuilding industry is today.

We'd get more bang from the buck importing them . . . and then eventually maintaining them in local yards that eventually get themselves up to snuff. Otherwise, let the original shipbuilder maintain them.

That being said . . . that which is impossible today . . .

. . . need not be impossible tomorrow.


=====


The common denominator for past SRDP failures was that they were not done as part of a much broader NATIONAL plan that went beyond the DND-AFP.

An undertaking like this must be integral to a SERIOUS National Development Plan that harnesses the participation of a wide-range of departments from the DOST, DOF, to even the DepEd and even private industry.

Any domestic Frigate manufacturing effort -- or any sophisticated domestic production initiative for that manner -- must be the END-RESULT of a comprehensive industrialization plan whose benefits actually go beyond defense.

Countries that have successfully implemented their own indigenous development efforts have pretty much all gone down this route. Snippets of how Singapore and South Korea have already been discussed in the old PH DARPA thread.

For this thread . . . the Indian experience might prove to be a much more appropriate example as their own efforts to consolidate their disorganized -- pride-driven -- development projects didn't really take its most recent form till 2014.

Introducing India's SAIL . . . Kamortas . . . and Make India.

http://www.makeinindia.com/about

PROGRAM
The Make in India initiative was launched by Prime Minister in September 2014 as part of a wider set of nation-building initiatives. Devised to transform India into a global design and manufacturing hub, Make in India was a timely response to a critical situation: by 2013, the much-hyped emerging markets bubble had burst, and India’s growth rate had fallen to its lowest level in a decade.

< Edited >

PLAN

< Edited >

PARTNERSHIPS

The Make in India initiative has been built on layers of collaborative effort. DIPP initiated this process by inviting participation from Union Ministers, Secretaries to the Government of India, state governments, industry leaders, and various knowledge partners. Next, a National Workshop on sector specific industries in December 2014 brought Secretaries to the Government of India and industry leaders together to debate and formulate an action plan for the next three years, aimed at raising the contribution of the manufacturing sector to 25% of the GDP by 2020. This plan was presented to the Prime Minister, Union Ministers, industry associations and industry leaders by the Secretaries to the Union Government and the Chief Secretary, Maharashtra on behalf of state governments.

These exercises resulted in a road map for the single largest manufacturing initiative undertaken by a nation in recent history. They also demonstrated the transformational power of public-private partnership, and have become a hallmark of the Make in India initiative. This collaborative model has also been successfully extended to include India’s global partners, as evidenced by the recent in-depth interactions between India and the United States of America.

PROGRESS

< Edited >

The most striking indicator of progress is the unprecedented opening up of key sectors – including Railways, Defence, Insurance and Medical Devices – to dramatically higher levels of Foreign Direct Investment.

< Edited >

The ministry has engaged with the World Bank group to identify areas of improvement in line with World Bank’s ‘doing business’ methodology. A 2 day workshop and several follow up meetings were held to formulate framework which could boost India’s ranking which is currently 130 in terms of Ease of doing business.

An Investor Facilitation Cell (IFC) dedicated for the Make in India campaign was formed in September 2014 with an objective to assist investors in seeking regulatory approvals, hand-holding services through the pre-investment phase, execution and after-care support.

The Indian embassies and consulates have also been communicated to disseminate information on the potential for investment in the identified sectors. DIPP has set up a special management team to facilitate and fast track investment proposals from Japan, the team known as ‘Japan Plus’ has been operationalized w.e.f October 2014. Similarly 'Korea Plus', launched in June 2016, facilitates fast track investment proposals from South Korea and offers holistic support to Korean companies wishing to enter the Indian market.

Various sectors have been opened up for investments like Defence, Railways, Space, etc. Also, the regulatory policies have been relaxed to facilitate investments and ease of doing business.

Six industrial corridors are being developed across various regions of the country. Industrial Cities will also come up along these corridors.

INS-KILTAN MADE OF SAIL’S SPECIAL GRADE STEEL
Wednesday, 18 October 2017 | Staff Reporter | Bhilai | in Raipur

http://www.dailypioneer.com/state-editions/raipur/ins-kiltan-made-of-sails-special-grade-steel.html
 
Steel Authority of India Ltd (SAIL) has supplied defence grade 'DMR 249A' steel plates for the indigenously built Anti-Submarine Warfare (ASW) stealth corvette INS – Kiltan which was commissioned on  October 16 into Indian Navy, a BSP press release informed.

It is the third of the four indigenously built AWS stealth corvettes under project 28 (Kamorta class) to join Indian Navy after sister ships INS Kamorta and INS Kadmatt, it informed.

SAIL’s integrated functioning across all its Plants has again successfully supplied the required quantity of steel for this significant project.

SAIL has also supplied 80 per cent steel required for construction of the Sardar Sarovar Project inaugurated by Prime Minister Narendra Modi in Gujarat recently.

Once again partnering in one of the most prestigious and important national projects, SAIL supplied around 85,000 tonnes of steel (TMT) for the entire Sardar Sarovar Narmada Nigam Ltd (SSNNL) project, which comprises all the canals throughout Gujarat, which are connected to Narmada River and Dam. The Sardar Sarovar project is the second largest concrete gravity dam (by volume) and has the world's third largest spillway discharging capacity, a Steel Ministry press release informed.

< Edited >

SAIL has been supplying steel for many prestigious projects taken by the Government for fast- paced infrastructure development of the country.

Chairman of Steel Authority of India Ltd (SAIL), PK Singh has said that the company’s state-of-the-art 'New Universal Rail Mill' at its Bhilai Steel Plant (BSP) has world's longest single piece rail of 130 metres length being produced where supplies of welded 260 metres rail panels to Indian Railways is in progress.

< Edited >

The SAIL Chairman was confident of improvement in company’s performance starting this financial year (FY 2017-18) backed by several management initiatives in every area of operations.

Singh said that, “Given the current stage of development in Indian economy and the likely growth path for Country's economy in next decade, the steel demand in India will witness significant growth in future. SAIL with newer and better technologies at its disposal aims to leverage potential of growth in steel demand by operating at rated capacities, product differentiation and customer satisfaction.” World steel association too, in its short range outlook has a forecast of 6.1 per cent growth in steel consumption for India in 2017.

The Company since inception has produced 475 Million Tonnes (MT) of Crude steel and has partnered in all major national projects requiring steel.

< Edited >
« Last Edit: April 16, 2018, 12:18:41 AM by adroth »

adroth

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Re: Frigate Acquisition Project included provisions for local production
« Reply #14 on: April 16, 2018, 03:43:23 PM »
Interesting perspecitve


Not Every Country Can Be a Shipbuilder
April 12, 2017

https://worldview.stratfor.com/article/not-every-country-can-be-shipbuilder

< Edited >

Dwindling purchases and heightened scrapping have yet to fully right the shipping industry. At the same time, they have put shipbuilders — which are crucial producers for many countries — in a difficult position. Without new vessels to build, shipyards have had a hard time staying up and running, even with the help of government subsidies. China Ocean Shipping Co., China's third-largest shipbuilder, will be closing three of its yards by 2020, while Mitsubishi Heavy Industries is weighing the possibility of restructuring its company. Hyundai Heavy and Daewoo Shipbuilding, moreover, may lower their prices to bring in more buyers. If they succeed, the addition of new ships to the global fleet may help keep shipping rates low — at the industry's expense.

< Edited >

« Last Edit: April 16, 2018, 03:46:23 PM by adroth »