Chinese Designers Indispensable To Builders?

In the 2000s, Chinese builders started to challenge their Japanese competitors for the leading share of bulkcarrier contracts, and since 2006 have generally taken the majority of contracts placed globally. Against this backdrop, Chinese designers have also come into the spotlight, benefiting from China’s leading role, and have become an indispensable partner to the Chinese builders.

Designer Trends
Chinese builders and designers have co-operated closely since the 1990s, and as a result, as Chinese yards began to take greater bulkcarrier orders, few foreign designers were able to significantly break into the Chinese market. As shown on the graph, which splits bulker orders at Chinese yards since 2006 by design (with data coverage of around 75\%) foreign designs account for just 13\% of orders, and 60\% of those were actually placed at foreign owned or joint venture shipyards.

So, who has provided the designs? Here we have classed Chinese designers as ‘independent’ or ‘yard-affiliated’. Unlike many builders elsewhere, in China only some state and larger independent yards have their own design houses. As a result, ‘independent’ designers play an important role, including those working with state shipbuilding groups (‘independent state’ designers) such as SDARI and MARIC as well as private (‘independent private’) designers such as Bestway.

Key Players
‘Independent state’ designers are dominant, having accounted for around 45\% of orders placed and been adopted by both state and independent yards. They provide a wide range of designs, though most orders placed have been in the Handymax sector, where SDARI provided the ‘Dolphin 57’ Supramax and ‘Dolphin 64’ Ultramax designs. SDARI accounted for 85\% of all orders linked to independent state designers, across 55 yards. In contrast ‘independent private’ designers have focussed on relatively less complex Handysize designs (with these vessels accounting for 70\% of orders), and are generally utilised by small and medium yards. Today, these designers have a more limited orderbook with some of their target yards suffering in challenging market conditions.

Close Ties
‘Yard-affiliated’ designers, linked to particular yards, tend to focus more on larger vessel types, with the larger yards more likely to take orders for the bigger units and also have their own design houses (around 40\% of bulker orders linked to ‘yard affiliated’ designs have been Capesizes). Shanghai Waigaoqiao, which now has the largest Capesize orderbook globally, has adopted its own design. As Chinese yards build their brands they tend to improve their design capabilities by setting up affiliated designers. Yangzijiang Group has acquired independent designer CS Marine, while AVIC group has bought foreign designer Deltamarin.
Meanwhile, independent designers are now actively diversifying into more specialized areas, with MARIC’s 18,000 TEU containership designs at Waigaoqiao providing one example. Chinese builders, it appears, are still looking for close ties with their design partners to help them remain competitive globally.

Source: Clarksons