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The main question on most people's minds in Southeast Asia is how Hong Kong will fare once the British colony is transferred back to mainland Chinese control. This subject has been further complicated by the death of China's leader, Deng Xiaoping. Visiting Hong Kong, it is clear that the majority of business people, including both Chinese and foreigners, believe that little change will occur. Initial thoughts are that Mr. Deng's death will not affect the future that much, although the attitude towards Hong Kong may become even more conservative under the country's new leader, Jiang Zemin, if he manages to survive Pictured is the new 16,000-ton lifting capacity floating dock at Pan United Shipyard. The floating dock measures 615 x 120-ft. (187.5 x 36.5-m), and is able to dock vessels up to 50,000 dwt.

the leadership under a possible threat from either Premier Li Peng or head of Parliament, Qiao Shi.

Meanwhile, in Hong Kong, the shipping industry is hoping that the appointment of C.H. Tung, son of C.Y. Tung, as leader from July will be a blessing for the industry as he is a "shipping man." The two shipyards in Hong Kong Hongkong United Dockyard (HUD) and Yiu Luan Dockyard — have both undertaken reorganization programs to concentrate on the larger containership market, and move away from the smaller ship repair market, which is increasingly looking to the cheapermainland Chinese yards to carry out such work.

During last year, HUD, which is a 50/50 joint venture between the Swire Group and Hutchinson Group, sold off its Taikoo floating dock to Xianen Shipyard in mainland China and took delivery of the 40,000-ton lifting United floating dock from Far East Levingston (FELS). This floating dock, with a length capability of 981 ft. (299 m), moved HUD into the large containership market. Although there are no definite plans to increase the facilities at HUD, yard management is reportedly considering replacing the Whampoa floating dock with a larger unit that would facilitate a move into the very large containership market.

Meanwhile, it is expected that the United floating dock will, at some stage this year, be relocated to the company's Tsing Yi Island headquarters from Lantau Island; land reclaimations and dredging are required for this eventuality. Government permission is also required for this move.

Yiu Luan Dockyard, part of the giant China Merchants Group, operates a total of three shipyards, the largest in Hong Kong and two smaller facilities in mainland China. Two years ago, the yard operated a total of five floating docks in the Hong Kong area, only three still remain. These are docks No. 1 (12,800 tons lifting capacity), No. 3 (36,000 tons) and No. 5 (1,800 tons). Numbers 3 and 5 are both located at Yam O near Lantau Island, and No. 4 is at the company' headquarters on Tsing Yi Island. The No. 2 floating dock (12,500 tons) was recently moved to Yiu Luan's Shekou Shipyard in the Shenzhen Special Economic Zone, just to the north of Hong Kong, and dock No. 4 (8,500 tons) moved to Zhang Zhou Shipyard at Among City on China's coastline opposite Taiwan. The Zhang Zhou Shipyard is a joint venture between Yiu Luan and the Long Jiang Shipyard.

For the future, the company is currently looking on the secondhand market for two additional floating docks, one for Tsing Yi and the other for Shekou. The plan is to improve the Hong Kong facility with a larger dock than No. 3. Plans exist for the No. 3 floating dock to eventually be moved to Tsing Yi Island, although permission from the Hong Kong govern- March, 1997 81 ment would have to be sought for this move.

The two main success stories on the international market from mainland China have been Gwangzhou, and Nantong Ocean Ship Engineering Co., located near Shanghai. There is a question of the technical level of operations in mainland Chinese yards, the main work currently including steel renewal and blasting and coatings operations. However, both of these yards are forming a very good reputation for such work, which will inevitably bring further, more complicated work to the yard.

In March 1995, the facilities at Gwangzhou Wenchong were extensively increased by the opening of a new 200,000-dwt capacity graving dock. This involved a large investment by China State Shipbuilding Corp. (CSSC), which actually ownsa purely autonomous basis. This new drydock complimented the existing two graving docks — with capacities of 15,000 and 25,000- dwt, respectively.

This new drydock is now mainland China's largest repair facility, and it has already drydocked its largest ever ship, Zodiac's 201,227- dwt bulk carrier Brazil Star, which entered the yard last year. Also in 1996, the yard carried out its two largest repair contracts onboard ships owned by Tsakos (600 tons of steel renewal) and European Navigation (400 to 500 tons). There are also plans this year to spend $3.5 million on new equipment, including grit blasting and painting units for the new drydock. A technical agreement with Singapore's Sembawang allowed the yard to gain a contract from U.S. oil major Phillips to carry out repairs to FPSO Nan Hai Kai Tuo, which is operating off the Chinese coast on behalf of China National Oil Co.

Gwangzhou Wenchong is also a newbuilding yard and its current orderbook comprises a series of four 1,200-TEU containerships for Germany's Leonhardt & Blomberg. This first vessel, which is the owner's design, is due for delivery during July and will be followed every five and a half months by the deliveries of the remaining three ships in the series.

To further its expertise in tank blasting and coatings operations, Nantong Shipyard is prepared to sign a cooperation agreement with German blasting specialist Mulhearn, most likely in May. The yard is also in the process of gaining ISO 9002 accreditation with DNV.

The yard, which was founded in 1992, has recently become a joint venture, with Japan's Kawasaki Heavy Industries holding a 50 percent share. Facilities include two floating docks with capacities of 80,000 and 150,000 dwt, with the larger unit claiming honors as the largest floating dock in mainland China.

The progress into the international market has been steady with management currently claiming about 60 percent of the ship repairs coming from overseas owners. The largest repair operation carried out involved Seahorse Shipping's bulk carrier Oceani Minanoa, which underwent som 1,700 tons of steel renewal durinj the latter part of 1995 and earb 1996.

Repair Trends Competition from both mainland China and the Middle East is slowly taking a toll upon the Singapore area, the traditional world leader in the repair industry. This increased competition for Singapore has come at a time when the area has increased its repair capacity from some 2.8 million dwt capacity during the early 1990s to its present level of more than 4.1 million dwt.

The main consequence of these two factors is that there is now likely to be, for the first time, areduction in facilities following the announcement that two of Singapore's largest yards, Sembawang and Jurong Shipyard (JSL), are to merge. No definite details of the necessary time scale have yet to be released, but it is understood that it will take about five years before the Sembawang facility will close. Meanwhile, the recently commissioned large ULCC dock at JSL will become part of Sembawang's marketing policy. It is also expected that other floating docks, currently at Sembawang Shipyard, will be transferred to the recently-opened PT Sembawang Karimun, in Indonesia.

Meanwhile, Karimun Shipyard is already fully operational; the 65,000-dwt capacity Karimun Perduna Dock, built by Sembawang Bethlehem, has been docking ships since last September.

Keppel has expanded overseas to cheaper labor areas, with projects in Vietnam, Philippines, the Middle East and Australia. Sembawang has commenced projects in Indonesia (Karimun), the Middle East (Albwardy Marine) and mainland China (Sembawang Bohai Shipyard). More recently, Pan United initiated a move to establish a repair yard at Batam in Indonesia. The latest to declare an interest in overseas development is Singapore Technologies Shipbuilding & Engineering (STS&E), which is currently in the process of seeking a joint venture partner to set up a new repair facility in a lower cost part of the region.

Philippines-based Kepphil Shipyard, a member of Singapore's Keppel Group, has announced the start of construction of a new, 40,000-dwt drydock at its Bauan, Batangas, shipyard in the Philippines. Earlier this year, the yard sold its 20,000-dwt floating dock to Singapore's Singmarine Dockyard and Engineering for $3 million, as part of a rationalization program.

Another FPSO conversion project has now been completed by a Singapore yard. The FPSO contract, involving 136,690-dwt Tantawan Explorer (ex-Bayern) at Singapore's Sembawang Shipyard, has been successfully carried out. Owned by Monaco's Single Buoy Moorings (SBM), the vessel was at the yard for six months undergoing March, 1997 conversion from a 136,960-dwt tanker to a floating production, storage and offloading (FPSO) unit.

Apart from the installation of a single point mooring system, Sembawang also carried out extensive steel work in the installation of the helideck, process deck support structures, equipment supports and the tandem offloading station, totaling more than 2,200 tons. More than 30 km of pipelines were also installed, and major upgrading and modifications were carried out on the utilities system, main boiler, accommodations areas and galley. Tantawan Explorer is to be stationed at the Tantawan oil and gas field, located around 265 miles south of Bangkok, in 240 fsw. Sembawang currently has two other FPSO contracts underway. The first involves another unit

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