Maritime in Singapore and SE
Asia Singapore remained the top bunkering port in the world
130 shipping groups
5000 maritime establishments
170 000 people
Contribute some 7%GDP
Maritime industry is one of the key economic pillars
World busiest port, leader in rigs and FPSO
Maritime in Singapore and SE
Asia R&D marine and offshore has increased
Develop shipping, port and maritime services, offshore
Innovative technologies, ideas toward sustainability
Safety offshore exploration and production
LNG research and technology (risk, safety, simulation)
Clean and efficient green next generation port
Centre of excellence for maritime research
Goals Give an overview of the Maritime industry in ASEAN and assess French position in the region. This documents aims at launching the Cluster in ASEAN and provide a useful informative tool for
members of the cluster.
It should allow French companies to:
Create synergies
Gain more weight in dealing with SEA clients and tackle the fierce competition
Identify trends, opportunities and big gaps for French actors in the SEA maritime industry
Methodology
Survey
• Reach out to french companies and get a broad understanding of the maritime industry from a French perspective
Interviews
• Meeting with top managers from the Maritime Industry in SEA
• More than 20 interviews
Data-mining
• Researches through various supports and sources to understand the specificities of the SEA market and of French maritime sector
Analysis
• Crafting of the final report through sectorial analysis
• Findings and recommendations
Companies’ involvement
More than 300 companies
reached out to
Almost 84 companies identified in the region
25 answers to Survey, 25 Interviews
34 answers in total
50 companies did not
answer at all...
10
23
9 6
20
11
4
Number of companies per industry
Oil&gas
Marine supplier
Defence & security
Shipbuilding
Peripheral services
Maritime transport
MRE
8
21 16
23 51
25
11
6
Brunei
Singapore
Myanmar
Vietnam Thailand
Indonesia
Philippines
Malaysia
6
Cambodia
French
companies*
*Companies having physical presence or activities in the region and members (or soon-to-be) of the Cluster
MARITIME
INDUSTRY
Security, Safety and Defence activities
1
2
3
4
Shipbuilding
Shipping & Logistics Offshore industries
Ship construction (civilian and repair)
Marine Supplies
Offshore systems,
equipment & services
Maritime renewable
energy
Military shipbuilding & systems
providers
Security & Safety services
Shipping companies
Logistics services
Sectors
Peripheral Services IT and telecomunications Financial services Ship-broking Law Certification
5
Shipbuilding
Definition
World market is estimated between 185 and 190 billion euros between
2013 and 2017
France has less than 5% Market Share worldwide with 8 bn € turnover in
2012
Shipbuilding
Context
World market is estimated between 185 and 190 billion euros between
2013 and 2017
France has less than 5% Market Share with 8 bn € turnover in 2012
Asian players dominate shipbuilding
Source: Oceans 21, Syntheses pays 2015
Shipbuilding
Context ASEAN
35
9
10
20
12
10
30
Number of shipyards: ASEAN countries
Indonesia
Malaysia
Myanmar
Philippines
Singapore
Thailand
Vietnam
ASEAN represents 20% of shipyards worldwide
Small shipyards cover a broad range of services, mailny focused on offshore
The main builders are Chinese, Korean and Japanese
More and more « upgrading » of shipyards
Shipbuilding
ASEAN Drivers countries
Singapore:
Repair and conversion
for O & G
70% conversion market
20% ship repair market
Malaysia:
Focus on O & G
Small offshore vessels
Specialized vessels
Concentrated on Borneo
Philippines:
Small shipyards, low
technology
Focus on repair
Government incentives
Indonesia:
250 shipyards
750,000 CGT for
construction/yr
9.5M CGT for repair/yr
Shipbuilding
French position analysis
Some French achievements
(Piriou, OCEA…)
Higher prices but reliability
and quality
Partnerships and synergies
Focus on repair and
maintenance
Quality and technology offer
for the high-end market
• Growing demands and
untapped markets in SEA for
the French industry (Cruise
ships, yachting…)
Shipbuilding
Recommendations
Seize the opportunities in repair and maintenance (« upgrading » of
the shipyards), cruise shipping and yachting markets
Take into account Chinese strategy of improving quality of their offer
(« up-scaling »)
Export SMEs expertise and technological know-how in the region
(Physical presence) via creating more synergies with French or local
contractors.
• Oceans 21
Insist on technological transfer and production/innovation in the region
(e.g. Thalès and its innovation hub) through building partnerships for
instance.
Market the French products right. Build on image of quality from French
shipbuilding and adapt offer to local clients.
• In this extent having physical presence, proximity with the clients can
be useful
The Oil and Gas service and supply industry gathers actors participate
in the upstream oil processing and support the oil majors in their
development.
Definition
Goal
Need to understand the specificities and distribution of the Oil & Gas
industry because it will influence the offshore service & supply business
in the region.
Oil & Gas Services and Supply
Industry Structure
at end 20133 Surplus Oil Natural Gas
Million tones Million tones OE
Indonesia -31.12 28.78
Malaysia -1.61 31.59
Thailand -33.78 -9.42
Vietnam -0.40 0.00
Other ASEAN -81.21 21.10
Total Asia Pacific -1023.00 -135.12
Sources: (1) Market Line 2014 ; (2) Le Marin review 2015 ; (3) BP Statistics Review 2013
GAS ASEAN is a growing GAS market, offshore and mostly surface.
Oil & Gas Services and Supply
ASEAN Market
Volume
Value
- 30.44%
+4.21%
• Gas-producing and exporting region (soon pivot)
• Offshore2: 60% of oil and 50% of gas production
Sources: BP Statistics Review 2013
Natural Gas
Indonesia Malaysia + Brunei Thailand Viet Nam Myanmar
Proved reserves (MtOE) 2640 1240 260 560 260
R/P ratio 41.6 17.4 6.8 63.3 21.6
Future wells Surface 2483 3520 2430 555 223
Subsea 205 211 0 29 17
ASEAN =
• 0.9% of world total oil proved reserves
• 3.1% of world total gas proved reserves
Oil & Gas Services and Supply
ASEAN Market
Countries
Indonesia, Malaysia and Brunei
Viet Nam, Thailand
Myanmar
Oil & Gas Services & Supply
Market Trends
Slowdown in the industry because of the low barrel price
Offshore: shallow water wells remain the market majority and deep water wells expected to become operational
Gas sector will gain importance to supply China, Japan and Korea
Fiercer competition in the region
Growing regulatory constraints: « local content »
Opportunities in Myanmar, Brunei & Vietnam
NOC’s are the dominant operators in the region
Oil & Gas Services & Supply
SWOT Strengths
• World leader and the 2nd largest
exporter of offshore extraction support
services.
• Strong and acknowledged expertise in
deep and ultra-deep offshore
operations that is still prevailing over
local players in the region.
Threats • Local competition gaining experience.
even exporting their services
(SAPURA KENCANA - Malaysian
company)
• Low oil price and lack of visibility on the
situation
• Increase of "local content”
Opportunities
• Singapore is the hub for O&G in the
region.
• New oil & gas findings in the region
• Growing gas market
• Strong will from ASEAN countries to
become energy independent
• Services - Inspection, maintenance and
repair contracts - Offshore deep-market
Weaknesses
• French marine contractors are often too
hi-tech and cannot compete pricewise.
• French companies tend to be not local
enough.
French O&G industry
in ASEAN
Oil & Gas Services & Supply
Recommendations
Focus on the natural gas market
Focus on the O&G offshore market
Focus on services – Repair & maintenance
Become local actors
Push states and oil companies for a standard raise
Defence & security industry Definition
Total Defence, Security & safety worldwide: $21.8 bn
Total French presence
$4.1bn
French warships building
7,500 jobs €1,8bn 30% export
This industry is divided in 3 main parts:
Defence: they focus on weaponry, navigation systems and surveillance
Security: It acts against human and weapons traffics, piracy
Safety: actors encompass the protection of life, assets and infrastructures
Issues in
ASEAN
Piracy (maritime terrorism)
Maritime boundaries delimitation
Non-regional power interests
Foreign military intelligent
activities in EEZ
National stability
concerns
Defence & security industry Context in ASEAN
Defence & security industry KPIs and Trends
MainKPI Influence
Revenue MarketVolume
Numberofprojectgoingon
Marketshare
Numberofsolutions -
Numberofcontracts Marketshare
Geopoliticalchanges MarketVolume
Governmentdefencebudget
MarketVolume
Asean Key drivers (2014-2024)
•By 2024, Asia Pacific is expected to be the largest maritime and border security markets with 66% market share
•The maritime surveillance and detection segment is expected to dominate the maritime and border security market with a share of 45.6% in 2024
•ASEAN builds a preventive army because China is reinforcing its fleet
•Global maritime and border security market is expected to experience a compound annual growth rate of 6.82% over the next decade
•Singapore and Malaysia are good partners with France
•Indonesia, Vietnam, Philippines are going to buy submarines to follow Singaporean action
Source: Global maritime & border security market report
Defence & security industry SWOT
Strengths
• France is well known in ASEAN and has a good
reputation as a partnership.
• Singapore and Malaysia have a high governmental
budget for the defence
• Increases in defence spending will allow Indonesia to
further modernise its military
• ASEAN's failure to form a unified position on the South
China Sea disputes
Threats
• There are lot of competitors in ASEAN, some are well
implemented – Chinese upgrading
• The decreasing price of oil & gas impact Defence &
security industry
• Existing partnership with France but also others
countries (Singapore, Malaysia, Indonesia)
• The uncertain economic outlook challenges
Singapore's ability to maintain traditionally high levels of
defence spending
Opportunities
• ASEAN is launching a plan of actions in different areas
• Most of ASEAN countries are high potential market
(Singapore, Indonesia, Malaysia, Vietnam, Philippines)
• Threat of Singapore regional terrorism increases by status as
a US ally
• Piracy in the Malacca Strait and the South China Sea is still
important
• Tension between China and some of Singapore's fellow ASEAN
members
• Every countries in ASEAN wants to buy sub-marines to do like
Singapore
• In Indonesia there is poor research and development
facilities. Advanced equipment must be imported
Weaknesses
• Singapore has a strong alliance with the US
• Singapore military is one of world's best equipped
• Malaysian government measures have reduced
instances of piracy in Malaysian waters and defence
budget for development falls
• For Indonesian government, French companies are not
competitive in term of prices
• Indonesia, Philippines, Vietnam, Myanmar have still a
high corruption rate
French Defence &
Security industry in
ASEAN
Defence & security industry Recommendations
France is a major actor: Quality, Savoir-faire
The ASEAN plan of actions creates opportunities for the development of
French companies.
Military shipbuilding
o Capacity is more important than quantity of ships
o Submarines armament over every ASEAN countries
o High growth in ASEAN
Surveillance
o Opportunities to develop maritime surveillance in Indonesia (GICAN study)
o Illegal fishing in Indonesia is still huge (1bn €)
o Piracy is still high in Malacca and Singapore Strait
Maritime Transport
Definition
Total trade in ASEAN in 2013: USD 2,511,516.5 M
85% of overall value from containerized segment
1.5% of french trade made in ASEAN
The marine freight sector is defined as consisting of revenues
generated from freight transportation by ship of container and dry bulk
cargo, by sea and ocean going vessels
Sustained growth pushed by Singapore, Malaysia &
Indonesia
0% 1%
15% 0%
17%
1% 5%
30%
20%
11%
Imports ASEAN 2013
Brunei
Cambodia
Indonesia
Lao PDR
Malaysia
Myanmar
Philippines
Singapore
Thailand
Viet Nam
1% 1%
14%
0%
18%
1% 4%
32%
18%
11%
Exports ASEAN 2013
Brunei
Cambodia
Indonesia
Lao PDR
Malaysia
Myanmar
Philippines
Singapore
Thailand
Viet Nam
Maritime Transport ASEAN Context
Huge energetic transformation to come in ASEAN for next 10 years
Indonesia to use its own coal for energetic growth to reach 30% in 2025
Iron industry is exposed to a threat of a bulk bubble in China
Tremendous growth prospects in LNG markets with favorable policies in ASEAN
Container growth in danger of oversupply
The growth in capacity by 5,7% of transport does not match with the increase of demand which remains at 3,7% in 2014.
Maritime Transport Market trends
Global economy & fleet supply
Sub
industry
Drybulk
carriers
LNG PCTC Container
feeder
Product
tanker
KPIs
Supplyofcarriers
Worldnaturalgas
consumption
Worldvolumeoftheindustry
expectations
Imbalancesofneworders
Petroleumlocations
Secondhandshipspurchasemarket
Structuralshiftsinenergyconsumption
patterninChina
Situationofemergingeconomies&China
Aseantrade Refinerieslocation
Demolitionofcarriers
FleetGrowth Chineseintratradeandtrade
orderbookas%oftotalfleet
Freightrates
Maritime Transport KPIs Analysis
French Shipping industry should closely follow the
energetic transformations about to happen in ASEAN
(except containers)
Monitor the medium size fleet (3500-5000 EVP) shifting
of market due to crew’s prices to attract potential new
opportunities
Maritime Transport Recommendations
Peripheral activities provide services to other actors of the marine industry like financing,
certification, insurance.
We especially focused on:
Classification and certification:
• follow the ships and their equipment from their building to their decommissioning
• help and ensure compliance with quality, health, safety, and environmental requirements
of the maritime industry.
Insurance:
• insure transporters and operators in international trade
• against the financial consequences of incidents involving the ships and the goods they
carry.
• insurance revenues can be devided into 4 major categories (data from 2012)
• 50% accountable for all types of cargoes
• 20% for hulls
• 15% for yachting
• 15% for 3rd party and transporters
Banking:
• department specialized in shipping finance
• major investors in the marine industry from merchant fleet to aquaculture depending on the
bank.
Peripheral Services Definition
The classification and certification sector:
highly competitive and fragmented with over 20 companies present in the region
5 of them control more than 1/2 of the total market shares
ASEAN Key Findings
• 95% of boat construction is happening in Asia --> importance to be visible
• Offer>Demand in boat construction --> need to find other sources of revenue
• Boats orders are increasing and need specific research before certification
• Classed fleet growth was linked to a strong increase in ships already in service being transferred in 2013 not sustainable for next years
• Increased number of services offered to the companies like research center
ASEAN Opportunities
• shipping : new investments leading to new potential markets
• offshore :
• subsea: big floating units coming from Korea represent new clients
• deepsea: new market to enter
• maintenance: Asset Integrity Management development
Peripheral Services Classification and certification
The insurance sector:
highly competitive and fragmented
ASEAN Key Findings
• Over ¼ of the global merchant’s fleet tonnage is insured by french companies worlwide
• Singapore wants to become the biggest hub for insurance and reinsurance in the world
• High constraints due to local legislation in new markets
• Marine premiums stagnate despite fleet growth and upswing in trade
• Legislation and government resources lagging growth in size of container ships (dangerous and hazardous cargo)
ASEAN Opportunities
• Targetting new markets that are not yet mature: Malaisie, Indonesie, Thailande, Inde et Chine
• Lobbying to upgrade local construction norms
• Increased market share for yacht and leisure boats but still not profitable in short and middle term
Peripheral Services Insurance
The maritime banking sector:
main clients: shipping and oil
and gas industries
high competition
ASEAN Key Findings
• France is firmly established among the solid leaders in shipping finance with heavyweights
• Singapore, HK and Shanghai are the major finance hubs especially in investment
ASEAN Opportunities
• Invest in local borrowers:
• Philippines and Indonesia develop more oil and gas infrastructures
• Malaysia has more needs in ship building financing
• Vietnam and Myanmar are looking for export credit
Peripheral Services Banking
Way Ahead Recommendations for the future
After gaining a broad understanding of the French Maritime Industry in the
region, we recommend to look into the following topics in the future:
Explore the positioning of French products and services in SEA. Analyse
Marketing strategy of French actors and propose ways to improve it?
Benchmark competition in the region.
Monitor green technologies: How does the competition look like in the region
(Norwegian, German…?) and what are the opportunities in the South East
Asian market?
Politics and lobbying actions: How to create more synergies between the
Cluster and institutional and commercial actors (French government) to
promote French business in the region (Océans 21 program; Bilateral treaties
between French and local governments)?
Monitor political and legal evolutions. stay aware of favourable legislations
and incentives programs from SEA governments and communicate to French
companies