SINGAPORE MARINE INDUSTRY ANNUAL REPORT 2005
2005 was a record-breaking year for the Singapore marine industry with turnover reaching a new height and numerous contracts secured by our industry players. Total turnover for 2005 reached an all time high of S$7.43 billion, up 40.2% from S$5.3 billion in the previous year.
This stellar performance was led by the industry’s offshore sector which continued to see strong growth in 2005 driven by higher oil prices and increasing demand for energy. The growth benefited Singapore shipyards, which clinched majority of the new rig building projects on order worldwide, further affirming Singapore’s leadership position in the global offshore rig construction market.
Output form the offshore sector grew by a hefty 82% to S$2,378 million in 2005. This is a new record for the offshore sector, and constituted 32% of the industry’s total turnover. This share is an increase of 7.4% more than in 2004.
Ship repair and conversion as well as shipbuilding sectors also strengthened and contributed to the overall increase in total turnover. The ship repair and conversion sector accounted for 51% of the industry’s turnover in 2005, an 8% drop from 2004. Despite fewer ships calling in for repairs in 2005, revenue increased 22% from 2004 to S$3,789 million in 2005.
The shipbuilding sector registered a significant increase in output with more projects secured and completed in 2005. Increased oil and gas development activities globally also resulted in heightened demand for offshore supply and support vessels, a niche market for local shipyards. Shipbuilding revenue grew by 42% year-on-year to S$1,263 million in 2005, accounting for 17% of the turnover.
The increase in contracts secured by industry players also resulted in an expansion of business activities in the various sectors of the industry. Statistics from the Ministry of Manpower (MOM) showed an increase in the number of workers employed by the industry. The total employment for the marine industry in 2005 was 48,516 workers. This was 22.3% more than the 37,716 workers employed in 2004.
SHIP REPAIR & CONVERSION SECTOR
The ship repair and conversion sector remains the largest contributor to the industry’s output. However, its percentage of contribution has declined from 59% in 2004 to 51% in 2005.
Despite the decline in the number of repairs undertaken, higher earnings saw the sector’s revenue rising to S$3,789 million in 2005. This was an increase of almost 22% or S$683 million more than the S$3,106 million earned in 2004.
Port statistics form the Maritime and Port Authority of Singapore showed a reduction in the number of vessels calling in Singapore for ship repair in 2005. A total of 6,124 vessels called in Singapore for repairs. This was 563 vessels fewer or 8.4% lower than the 6,687 vessel calls recorded in 2004. Total gross tonnage of the vessels that called here for repairs in 2005 was 37.85 million grt, 2.95% lower than the gross tonnage of 39 million grt in 2004.
In 2005, the industry completed six FPSO (Floating Production Storage and Offloading) and FSO (Floating Storage and Offloading) projects. As at the end of 2005, Singapore shipyards have undertaken a total of 103 FPSO, FSO and other related projects.
Turnover from shipbuilding activities soared by 42% to S$1,263 million in 2005. This was an increase of S$373 million over 2004’s output of S$890 million. In terms of contribution to the industry’s total, shipbuilding was up by a slight 0.2%, from 16.8% in 2004 to 17% in 2005.
84 vessels totalling a gross tonnage of 210,597 grt were launched in 2005. This was 13 vessels fewer or 13.49% lower than the 97 vessels launched in 2004. The combined gross tonnage of the vessels launched was however, 40.5% higher than the gross tonnage of 149,855 grt in 2004.
As in past years, majority of the vessels launched in 2005 were workboats, barges and tugs. Workboats and barges accounted for almost 68% of the units launched. The next highest category was offshore supply/ support vessels.
The offshore sector, which included the construction, repair, upgrading and conversion of offshore units such as jack-up rigs, semi-submersibles and other platform structures, saw an increase in its share of contribution to the industry’s turnover. It constituted 32% of the total turnover in 2005, up by 7.4%.
The offshore sector’s turnover of S$2,378 million in 2005 was a new milestone for the industry. It represented an increase of 82% from the previous year’s earnings of S$1,304 million.
Overall, the outlook for all sectors in the marine and offshore industry is expected to be strong. With an outstanding order book at an all-time high, the industry is on course to continue its good performance over the next few years. Based on current swelling order books of industry members, 2006 looks set to be another healthy year for the industry.
Strong growth will continue to come from the offshore sector. Given the robust offshore oil and gas market, and the high utilisation and high charter rates of jack-up rigs, the rig market is expected to stay strong for the next few years, as supply of offshore equipment, services and rigs, is not in tandem with the surge in oil exploration and production activities worldwide. This is evident from the continuous stream of orders for new jack-ups and semi-submersibles placed with local shipyards in the first few months of 2006.
The market for FPSO conversions and building of offshore support vessels, two niche areas for the industry, will also remain strong in response to the oil and gas exploration boom. During the last few years, local shipyards have also been building up its competencies and increasing its share in the more specialised and sophisticated ship repair market segment of LNG (liquefied natural gas) carriers.
The industry has remained robust and stayed ahead of the increasingly strong competition from China, Middle East and neighbouring countries. However, it must continue to focus on its core competencies and leverage on its competitive advantages in the specialised market segment and track records, to provide cost-effective solutions to customers. Through continual innovation, the industry must come up with new and improved designs and engineering solutions to meet customers’ specific requirements and for new operating environments. Last but not least, the marine industry will have to ensure that projects continue to be executed safely, within budget and on schedule.