Call for giant step by China

PUBLISHED : Friday, 08 March, 1996, 12:00am
UPDATED : Friday, 08 March, 1996, 12:00am

CHINA should replace all its small shipyards with three giant complexes to become a world player in the industry, a ship management consultant says.

Peter Cremer, managing director of Anglo-Eastern Ship Management, said although China had been building modern vessels for 150 years, it should shut down smaller shipyards in favour of three big yards: one in the south, one on the central coast and a third in the north.

'It will take a long time before [China] can compete on the technical and productivity side with Korea,' he said. 'Technically speaking, there is a lot of room for improvement.' Despite the relative disparity in skills, it was still worthwhile for clients to negotiate contracts with China yards because they were cost-effective and flexible, he said.

'I think you can build a good vessel in China, provided you are careful.' Cheaper labour costs meant that China yards were not as expensive as those in Japan, he said.

Industry sources said vessels could be built in China at prices which were 10 to 20 per cent cheaper than in Japan or South Korea.

'There is flexibility [in China] which you do not find in Japanese or Korean yards,' he said.

Mr Cremer said that China shipyards needed to accept that the vessels they constructed should be 'cosmetically nice'.

If the standard of finish was improved, their products would be more widely appreciated, he said.

For foreign clients, the language barrier in China yards could create difficulties, Mr Cremer said.

Mr Cremer said Anglo-Eastern was providing technical consultancy services for Pacific Basin for the construction of eight log/bulk carriers at Guangzhou Shipyard. Three had been delivered while a fourth would be ready next Monday, he said.

The final four would be delivered in May, July, September and November this year.

The company was also providing similar consultancy services for log/bulk carriers under construction at Shanghai shipyard and Xingang shipyard near Tianjin, he said.

It had also worked on two container vessels which were recently completed by Daewoo in South Korea.

The company had supervised the construction of two double-hull panamax tankers which were built in 1992, Mr Cremer said.

The vessels were still operating under the Anglo-Eastern management, with one of them entering Caribbean and US waters regularly.

Mr Cremer said when Anglo-Eastern provided technical consultancy services, its staff would check every bit of the vessel's welding to ensure it was up to international standards.

Checks were also made on whether the design concept was translated accurately into reality, he said.

There had been cases when the design had been unclear. he said.

A ship was only as good as the painting of its ballast tanks and holds, he said.

'Once the ship begins operations, you can never in the life of the ship repaint [these sections], and so we have very high standards of paint supervision,' Mr Cremer said.

Accurate supervision remained important regardless of whether the vessel was designed to serve for 10, 15 of 20 years, he said.

Mr Cremer said it there was no point in using even the highest quality paint, if it was applied incorrectly.

Anglo-Eastern's team of engineers was required to travel widely in order to inspect China-made equipment that was exported and fitted in foreign yards, he said.