Insight
Dream of homemade luxury cruise coming true
Last Updated: 2016-12-08 10:42 | CE.cn
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By Shen Zejin

China sees tremendous market potential in the cruise market and has been the region achieving the fastest growth in cruise economy. At present, the supply capacity of the global large luxury cruise market has failed to satisfy the market demand, thus providing opportunities for China's shipbuilders to realize local manufacturing of cruise by relying on the incremental demand in China's and Asia-Pacific cruise market.

Cruise rush speeding up growth of "Made in China".

According to Zheng Huihang, deputy secretary general of China Communications and Transportation Association, 2.224 million trips in China in 2015 were realized by cruise; 3.6 million trips are expected this year and 3.32 million has been achieved from January to September, an increase of 85 percent year on year. Given such a development momentum, China has grown to the fourth largest cruise passenger source.

At 2016 Seatrade Asia Pacific Cruise Congress held Shanghai in October this year, Wu Qiang, general manager of China State Shipbuilding Corporation, presented another group of data that China's tourists by cruise have increased by 320 times in the past 10 years, with CAGR higher than 40 percent and that it is expected that such a number would reach 20 million up to 2030.

Cruise economy has been covered in national strategy. It has been explicitly raised in Made in China 2025 release by the State Council in May last year that "efforts should be made to make breakthrough in design and construction of luxury cruise". It is also clearly put forward in the Vision and Activity on Promoting Co-building of Silk Road and 21-century Maritime Silk Road jointly released by National Development and Reform Commission, Ministry of Foreign Affairs and Ministry of Commerce in March that "efforts should be made to promote cooperation in cruise tourism along the 21-century Maritime Silk Road.

Who will gain the "Crown Pearl"

Luxury cruise is hailed as the "Crown Pearl" of the shipbuilding industry and given the great difficulty in design and building and high entry threshold; it is called a "huge system project".

In 2010, China rose to be No.1 shipbuilding country in the world. However, the global shipbuilding industry went bleak and even plumped into the bottom of the industry. The orders for new ships in the first half this year has decreased by about 70 percent. However, on the contrast to the sluggish traditional ship market, luxury cruise enjoys robust demand in the international market. At present, global cruise design and construction and supporting industry chain is mainly concentrated on Europe and the global annual capacity is 8 or so, showing apparently insufficient capacity. In the first half this year, orders for 15 cruises were concluded and this year is expected to see the highest level throughout the history.

Under such a context, China's intensified efforts in building luxury cruises will provide new development momentum for China's ship industry. In addition, while promoting China's ship industry from the low- and medium-end to the high-end, the supply-side reform in ship industry in China can also be accelerated to improve the overall strength of China's ship industry in the end.

The most competitive shipbuilding company CSSC in China takes the initiative to build the first made-in-China luxury cruise. After continuous efforts, CSSC has made cooperation with globally well-known luxury cruise operators, luxury cruise builders, IACS and financial investment institutions in an attempt to create and cultivate local luxury cruise industry chain by integration of industry and finance and international cooperation.

CSSC is the designer and builder of China's first LNG ship, first large container ship, first deepwater semi-submersible drilling unit "Offshore Oil 981", all of which are from Shanghai Waigaoqiao Shipbuilding Co., Ltd.

In September this year, CSSC concluded letters of intent on building 2+2 133500t large luxury cruises with Carnival Corporation and Fincantieri Group, marking that the design and building of China's first luxury cruise will be undertaken by Shanghai Waigaoqiao Shipbuilding Co., Ltd. in Shanghai.

Strength & capability

China's first luxury cruise will be built in Shanghai Waigaoqiao Shipbuilding Co., Ltd. Waigaoqiao is a modern shipbuilding company with the most advanced technical facilities in China so far and has ranked No.1 in total shipbuilding quantity and economic benefits for 10 consecutive years since 2005 and remained one of the five largest shipyards in the world for eight years .

At present, the business co-operation model covering establishment of shipbuilding joint venture and ship owner joint venture has been defined. CSSC Cruise Science and Technology Development Co., Ltd. controlled by CSSC has been established in May this year and will be developed to be an overall cruise design and building resolution provider facing the whole industry by integrating superior resources and capabilities of CSSC and domestic and foreign enterprises in cruise design, building, supporting and management so as to lead the development of China's cruise industry.

On November 2, Shanghai Waigaoqiao Shipbuilding Co., Ltd., together with Zhongchuan Finance Co., Ltd., Industrial Bank Shanghai Sub-branch and Shanghai Pudong Development Bank Shanghai Sub-branch held the signing ceremony of syndicated loan to provide RMB 2 million yuan of syndicated loan with a term of three years to Shanghai Waigaoqiao Shipbuilding Co., Ltd.

Step-by-step targets have also been made. From 2016 to 2020, Phase I Project to fill in the gap is intended to fulfill digestion and absorption, independent building, system building, leap-type breakthrough and the realization of "breaking through zero" in luxury cruise in real meaning so as to build China's first large cruise reaching international level and satisfying the latest rules and regulations and meeting the development trend of international cruise.

From 2020 to 2025, the independently developed Phase II Project is intended to achieve independent design, efficient building, system optimization and supporting improvement, independently carry out ship designed of cruise, launch Type I cruise design suitable for engineering and with proprietary intellectual property rights, preliminarily form the development capability of cruise, build cruise industry system and strive for conclusion of foreign orders.

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