Strategic Approach for Shipping Modernization In the Thailand JETRO Singapore CAJS Japan Marine Science Inc. FEB. 2011 1
Ⅰ: Situation Summary Current Status and Issues Ⅱ: Key Elements for the development of Shipping Industry Ⅲ: Strategy for Shipping Development IV: Core Project Development of International Shipping Development of Coastal Shipping and Shipbuilding 2
Billion US$ 350.00 300.00 250.00 200.00 150.00 100.00 50.00 0.00 Transport & Communication Ratio per GDP Nominal GDP Transport & Comm Ratio(%) 2004 2005 2006e 2007f 2008f 2009f 2010f 2011f % 8.6 8.6 8.5 8.5 8.4 8.4 8.3 8.3 8.2 8.2 8.1 8.1 3
International Transport Mode (M.Ton Base) Domestic Transport Mode (M.Ton base) Air Air Rail Rail Sea Land Water Sea Land 0% 50% 100% 0% 50% 100% Source:Marine Department 4
Domestic Transport Mode (Ton-Km) Pipeline Air Sea/Water Rail Land 0% 5% 10% 15% 20% 25% 30% 35% 40% 5
90 80 70 60 50 40 30 20 10 0 <5 5-9 10-14 15-19 20-24 25-29 >=30 Dry Cargo 5 3 15 16 60 71 88 Liquid Cargo 14 4 37 15 36 50 65 Marine Department 2010 6
GRT & Nos. of ship in 2009 LRS Data Country GRTx1,000 (average) 1 Panama 165,385 (21,257) 2 Liberia 74,091 (29,530) 3 H.K. 39,634 (25,374) 16 Japan 12,989 (2,139) Nos. 7,780 2,509 1,562 6,071 GRT x 1,000 & Nos. 10,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 GRT Nos. GRT Average 5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 GRT (Average) 38 Thailand 2,714 (2,979) 911 0 0 World 757,922 (7,266) 104,305 7
Size and age of Thai Registered Ship (Marine Dept.2008) Type Age GRT (Average) DWT (Average) Container 16 6,038 4,209 Bulk Carrier 20 6.038 4,209 General 28 10,679 7,321 Cargo Tanker 24 3,167 2,059 Others 30 2,270 1,929 8
Example: Trend of tanker by age in the world Composition of Tanker by Nos. LRS Statistics 2008 Composition of Tanker by GRT LRS Statistics 2008 3,000 70,000 2,500 60,000 2,000 50,000 40,000 1,500 30,000 1,000 20,000 500 10,000 0 0 4 5 9 10 14 15 19 20 24 >25 0 0 4 5 9 10 14 15 19 20 24 >25 9
Example: Trend of tanker by age in the Thailand (Marine Department 2010) 50 45 40 35 Composition of Thai tanker by Nos. 49 43 40 700,000 600,000 500,000 Composition of Thai tanker by DWT No.of Ship 30 25 20 24 17 17 400,000 300,000 15 11 200,000 10 6 100,000 5 0 0 9 10 14 15 19 20 24 25 29 30 34 35 39 40 0 0 9 10 14 15 19 20 24 25 29 30 34 35 39 40 10
Thai Shipbuilding Statistic (TSRA 2010) New Building Revenue Repair Revenue 8,000 4,500 7,000 4,000 6,000 3,500 5,000 3,000 Million Baht 4,000 3,000 Million Baht 2,500 2,000 1,500 2,000 1,000 1,000 500 0 2003 2004 2005 2006 2007 2008 2009 2010f New Building 606 969 1,682 3,811 5,620 6,200 6,830 7,150 0 2003 2004 2005 2006 2007 2008 2009 2010 2011f Repair 1,157 1,761 2,210 2,014 3,560 3,900 3,470 3,650 4,180 11
Nos & GRT of New building 2008 (LRS) Rank Shipyard Nos. GRT 1 China 1,164 22,538,098 (19,363) 2 Japan 630 19,028,251 (30,204) 3 S. Korea 531 29,111,141 (54,823) 4 Malaysia 244 123,693 (507) 5 Indonesia 241 231,726 (962) Nos. & GRT of New building in the world 2008 (LRS) Rank Flag Nos. GRT 1 Panama 500 17,239,664 (34,459) 2 Singapore 324 3,897,769 (12,030) 3 Indonesia 242 241,143 996) 4 Liberia 240 9,968,972 (41,537) 5 Hong Kong 183 6,642,776 36,299) 29 Thailand 10 9.747 (975) 35 Thailand 22 25,538 (1,161) 12
Rank Country of shipbuilder No. of ship built by the country A No. of Registered ship B B/A= 1 Japan 27,072 6,071 0.22 2 USA 9,834 6,883 0.70 3 China 7,989 4,113 0.52 10 Indonesia 2,456 5,606 2.28 14 Malaysia 1,903 1,326 0.67 16 Singapore 1,835 2,528 1.38 24 Vietnam 1,059 1,382 1.31 31 Philippines 533 1,896 3.56 46 Thailand 163 911 5.58 Total in the world 104,305 13
Small Scale Shipping Old and Obsolete Ship Low reliance on Sea/Water transportation Small Scale Shipbuilding Focal Points to be improved; Modernization of Thai Fleets (Ships) How to replace the fleet consisting of old, obsolete, and various sizes/types of ships with brand new, standardized and appropriate ships built in Thailand. 14
Key Elements Issues 1. Financial Resources Interest rate, loan security and depreciation 2. Economic Viability Profitability 3. Technical Capacity/Empirical knowledge Technology, empirical knowledge and engineering capacity required for shipping and shipbuilding 4. Administrative Capacity Safety standards (ISM code,etc) 5. Human Resources Supervision of shipping, Shipbuilding Engineering, Maritime administration required 15
Policy of Marine Department National Maritime Promotion Program 1) Expanding shipping ratios of Thai-registered ships 2) Promoting coastal and river transport 3) Developing the ports 4) Promoting shipbuilding industry 5) Enhancing the knowledge and skills of seamen 6) Developing human resources specialized in international physical distribution Policy of Ministry of Industry 1) Shipbuilding complex/industrial Park 2) Enhancing constructing and repairing abilities and capacities: construction and repairing of 20,000 DWT ships 3) Financial assistance 4) Education for human resources specialized in Shipbuilding 5) Tax policies including investment. 16
Core Projects are vital to achieve the strategy for shipping and shipbuilding development Core Project Budget Organization International Shipping Development Program MOF EXIM BANK Marine Department MOF Tanker Modernization Program for Development of Coastal Shipping and Shipbuilding Marine Department Ministry of Industry MOF 17
Core Projects are vital to achieve the strategy for shipping and shipbuilding development Paradigm Shift Insufficient environment for ship investment Appropriate Ship Finance Promotion of Procurement competitive ship Accumulation of non economical & non safe ship Procurement of old and cheap ship Maintain quality (ship asset) and stable business profit Reinvest to more competitive ship 18
Tanker Modernization Program for Development of Coastal Shipping and Shipbuilding Object of the Program 1. Promotion of modernization of shipping 2. Security of energy transportation 3. Development of shipbuilding and related industry Key for implementation of the Program 1. Finance Scheme 2. Building Scheme 3. Cooperation between shipping and shipbuilding 19
Tanker Modernization Program for Development of Coastal Shipping and Shipbuilding Status of Oil Transportation Oil Consumption in Thailand Transport Mode by Tanker Estimated Oil Volume carried by Tanker 33,170,000 KL/Year (91,000 KL/day) Approx. 55% 18,243,000 KL/Year (50,000 KL/day) 20
Tanker Modernization Program for Development of Coastal Shipping and Shipbuilding M. Litre 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 Sales of Petro Product except LPG 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 21
Tanker Modernization Program for Development of Coastal Shipping and Shipbuilding DWT 800,000 700,000 600,000 500,000 400,000 300,000 200,000 100,000 0 Liquid Cargo Vessel in Thailand 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 300 250 200 150 100 50 0 No. of Ship DWT No. of Vessel 22
Tanker Modernization Program for Development of Coastal Shipping and Shipbuilding 23
Tanker Modernization Program for Development of Coastal Shipping and Shipbuilding Freight Fluctuation of International and domestic tanker Internatioanl Tanker Freight 350.0 Index (LRS) Charter Rate of Domestic Black Oil Tanker Index 300.0 250.0 200.0 150.0 100.0 50.0 0.0 VLCC Suezmax Aframax Handy Clean 2004 2005 2006 2007 2008 2009 24
Tanker Modernization Program for Development of Coastal Shipping and Shipbuilding To secure Ship Asset, Safety and Cost Management by ship management. Ship Management System to be considered as a security for finance. Bank Shipping Company Shipyard Ship Management Company 25
Tanker Modernization Program for Development of Coastal Shipping and Shipbuilding Implementing Scheme Steering Shipping Committee MOT(MD) Company / MOI / MOF Shipping Company Technical Consultant Shipyard (Leader) Shipyard A Shipyard B Shipyard C 26
Tanker Modernization Program for Development of Coastal Shipping and Shipbuilding Current status of Thailand registered tanker DWT < 999 1,000-1,999 10,000 2,000-3,000-4,000-5,000 - - 2,999 3,999 4,999 9,999 49,999 >50,000 0-9 1 2 1 2 6 10-14 9 2 11 15-19 0 5 8 1 3 2 2 3 24 Age 20-24 1 22 14 2 1 7 2 49 25-29 1 12 6 10 8 6 43 30-34 2 18 14 2 3 1 40 35-39 6 7 1 1 2 17 40-1 6 7 2 1 17 14 69 59 20 18 20 2 5 207 27
Tanker Modernization Program for Development of Coastal Shipping and Shipbuilding Tanker to be replaced according to Single hull tanker Phase out Regulation 2015 Age < 999 1,000-1,999 DWT 2,000-2,999 3,000-3,999 Nos. 20-24 1 22 14 2 39 25-29 1 12 6 10 29 30-34 2 18 14 2 36 35-39 6 7 1 14 40-1 6 7 2 16 Nos. 5 64 48 17 134 Age Average DWT 0-9 10-14 15-19 20-24 2,743 25-29 3,474 30-34 2,218 35-39 2,604 40-2,228 Average DWT 2,777 Note : Average DWT excludes tankers of 30,000DWT or more 28
Tanker Modernization Program for Development of Coastal Shipping and Shipbuilding PTT Oil Terminal at Surat Thani Limitation for Tanker size Length for oil tanker: 77m Water Depth High tide : 10.5m Low tide : 5.0m Width of river : 150m Safety draft : 4.5m Cannel Length : 22km 29
Tanker Modernization Program for Development of Coastal Shipping and Shipbuilding Vol.(M.Litre) PTT OIL at Surat Thani Distribution Volume (M.Litre) / Year 1000 800 600 400 200 0 Shell, Exxon, Chevron 700,000KL/Year Deployment to Surat Thani For PTT : 4 tankers For Shell/Exxon/Shevron : 4 tankers No. of Voyage per year 2,000KL tanker : Apprx. 87 30
Tanker Modernization Program for Development of Coastal Shipping and Shipbuilding 16.00% IRR (Ship 6 Mil.Yen) 12.00% IRR (Ship 8 Mil.Yen) 14.00% 12.00% 10.00% 8.00% 6.00% 4.00% 2.00% 0.00% IRR (%) 1.00% 2.00% 4.00% Freight TB/Liter 0.25 0.30 0.35 10.00% 8.00% 6.00% 4.00% 2.00% 0.00% 2.00% IRR (%) 0.25 0.30 0.35 Freight TB/Litre 1.00% 2.00% 4.00% 31
Tanker Modernization Program for Development of Coastal Shipping and Shipbuilding IRR (%) 16.00% 14.00% 12.00% 10.00% 8.00% 6.00% 4.00% 2.00% 0.00% 2.00% 4.00% IRR (Interest 2% 10 yrs) 0.35 0.30 0.25 600,000 800,000 100,000 Ship Price (J.Yen x1,000) 32
Tanker Modernization Program for Development of Coastal Shipping and Shipbuilding To implement tanker modernization program for development of coastal shipping and shipbuilding industry, Financial and administrative support by Government Long term charter contract by Cargo Owner Building competitive ship Maintain ship asset, high quality and safety operation 33
Von Voyage Thank you JETRO Singapore CAJS Japan Marine Science Inc. FEB. 2011 34