Established in 1990, Dalian New Shipyard is the major focus for China’s colossal investment in modern newbuilding capacity - 1.25 billion dollars per year - in the nation’s aim to become the world’s leading shipbuilder. One result of that investment is Dalian’s new 80m wide building dock, opened in 1996 and now being used to build five DNV-classed, 300,000dwt VLCCs for Iran.
At the time of our visit in January, work was under way on several ships some newly started, while the product tanker Stavanger Solveig, for example, only needs its propulsion machinery to be finished.
Dalian New Shipyards order book contains a total of 15 newbuildings 14 product or crude tankers and one FPSO. The VLCCs for Iran are double the capacity of the largest of the other crude carriers. But they continue Dalians successful entry into the competitive western and European markets, which has seen delivery of Aframax and Suezmax tankers to such owners as Anders Wilhelmsen, Stena and A.P.Møller, as well as four bare-deck semisubmersibles for Ocean Rig and other offshore units for western oil interests.
Challenging Japanese and Korean dominance
We can see a growing market in the future for the largest crude tankers, explains Sha. There are currently around 240 VLCCs operating on the worlds oceans. Most of these were built in the 1970s and have single hulls. Many will be scrapped in the relatively near future, and will have to be replaced. This is the potential market were now competing for.
On its own, the contract with the Iranians is not a gilt-edged one for DNS. The price is low from the viewpoint of Sha and the yard, but the contract is a gateway to a profitable market. Chinese shipyards have not previously competed in the Middle Eastern tanker market. With an ever-increasing share of the shipbuilding taking place in the Far East, the Chinese aim to challenge current Japanese and Korean dominance in tanker exports. Their confidence in meeting the S.E.Asian challenge is underpinned by Chinas growing efficiency, and heavy investment in Western technology. Current shipbuilding modernisation plans call for importing equipment and technology at the rate of US$1000 million annually, plus $250 million in added infrastructure.
Philosophy plus pragmatism
If you show faith in a Chinese person, you will find that you can always trust him, is Shas philosophical approach. We have a large force of young, competent workers. Not only the shipping company were building for, but also the yards were competing with, will ensure that the ships will be successful. I will personally build the NITC tankers as if my life depends on it.
Sha Jun Gang has spent his entire working life in the citys extensive maritime environment. He graduated from Dalian Maritime University in 1966 and has personal experience of all phases of shipbuilding from design to the individual production units. During the Cultural Revolution, Sha, then a recently graduated academic, worked as a tradesman for five years. Useful training and experience which I wouldnt be without.