French Maritime Cluster Committee in Singapore FMCCS. May Singapore

Transcription

1 French Maritime Cluster Committee in Singapore FMCCS May Singapore

2 Maritime in Singapore and SE Asia Singapore remained the top bunkering port in the world 130 shipping groups 5000 maritime establishments people Contribute some 7%GDP Maritime industry is one of the key economic pillars World busiest port, leader in rigs and FPSO

3 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

4 Agenda Goals Methodology Mapping Identified Sectors Sectors analysis Way Ahead

5 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

6 Methodology Survey Interviews Data-mining Analysis Reach out to french companies and get a broad understanding of the maritime industry from a French perspective Meeting with top managers from the Maritime Industry in SEA More than 20 interviews Researches through various supports and sources to understand the specificities of the SEA market and of French maritime sector Crafting of the final report through sectorial analysis Findings and recommendations

7 Companies involvement More than 300 companies reached out to 50 companies did not answer at all... Almost 84 companies identified in the region 34 answers in total 25 answers to Survey, 25 Interviews

8 Myanmar Number of companies per industry 8 Cambodia Oil&gas Marine supplier Defence & security Shipbuilding Peripheral services Maritime transport Thailand 16 Vietnam Philippines MRE Singapore 51 Malaysia Brunei 6 Indonesia French companies* 25 *Companies having physical presence or activities in the region and members (or soon-to-be) of the Cluster

9 Sectors 1 Shipbuilding Ship construction (civilian and repair) Marine Supplies 4 Shipping & Logistics Shipping companies Logistics services MARITIME INDUSTRY Offshore industries Offshore systems, equipment & services Maritime renewable energy 2 Security, Safety and Defence activities Military shipbuilding & systems providers Security & Safety services 3 Peripheral Services IT and telecomunications Financial services Ship-broking Law Certification 5

10 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

11 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

12 Shipbuilding Context ASEAN Number of shipyards: ASEAN countries Indonesia Malaysia Myanmar 10 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

13 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

14 Shipbuilding French position analysis Some French achievements (Piriou, OCEA ) Higher prices but reliability and quality Partnerships and synergies Quality and technology offer for the high-end market Growing demands and untapped markets in SEA for the French industry (Cruise ships, yachting ) Focus on repair and maintenance

15 Shipbuilding SWOT Analysis

16 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

17 Oil & Gas Services and Supply Industry Structure Definition The Oil and Gas service and supply industry gathers actors participate in the upstream oil processing and support the oil majors in their development. 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.

18 Oil & Gas Services and Supply ASEAN Market Gas-producing and exporting region (soon pivot) Offshore 2 : 60% of oil and 50% of gas production Volume +4.21% % Value at end Oil Million tones Surplus Natural Gas Million tones OE Indonesia Malaysia Thailand Vietnam Other ASEAN Total Asia Pacific GAS ASEAN is a growing GAS market, offshore and mostly surface. Sources: (1) Market Line 2014 ; (2) Le Marin review 2015 ; (3) BP Statistics Review 2013

19 Oil & Gas Services and Supply ASEAN Market ASEAN = 0.9% of world total oil proved reserves 3.1% of world total gas proved reserves Natural Gas Indonesia Malaysia + Brunei Thailand Viet Nam Myanmar Proved reserves (MtOE) R/P ratio Future wells Surface Subsea Countries Indonesia, Malaysia and Brunei Viet Nam, Thailand Myanmar Sources: BP Statistics Review 2013

20 Oil & Gas Services & Supply Key Drivers ASEAN

21 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

22 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. 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 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 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

23 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

24 Defence & security industry Definition 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 Total Defence, Security & safety worldwide: $21.8 bn Total French presence French warships building $4.1bn 7,500 jobs 1,8bn 30% export

25 Defence & security industry Context in ASEAN Maritime boundaries delimitation Non-regional power interests Foreign military intelligent activities in EEZ Piracy (maritime terrorism) Issues in ASEAN National stability concerns

26 Defence & security industry KPIs and Trends Main KPI Revenue Influence Market Volume Asean Key drivers ( ) Number of project going on Market share Number of solutions - Number of contracts Geopolitical changes Government defence budget Market share Market Volume Market Volume 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

27 Defence & security industry SWOT Strengths Weaknesses 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 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 Opportunities French Defence & Security industry in ASEAN Threats 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 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

28 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

29 Maritime Transport Definition 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 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

30 Maritime Transport ASEAN Context Sustained growth pushed by Singapore, Malaysia & Indonesia Imports ASEAN 2013 Exports ASEAN % 1% 1% 1% 11% 15% 0% Brunei Cambodia Indonesia 11% 14% 0% Brunei Cambodia Indonesia 20% 17% Lao PDR Malaysia Myanmar 18% 18% Lao PDR Malaysia Myanmar Philippines Philippines 30% 5% 1% Singapore Thailand Viet Nam 32% 4% 1% Singapore Thailand Viet Nam

31 Maritime Transport Market trends 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.

32 Maritime Transport KPIs Analysis Global economy & fleet supply Sub industry Dry bulk carriers LNG PCTC Container feeder Product tanker KPIs Supply of carriers Second hand ships purchase market Demolition of carriers Freight rates World natural gas consumption Structural shifts in energy consumption pattern in China Fleet Growth World volume of the industry expectations Situation of emerging economies & China Imbalances of new orders Asean trade Chinese intra trade and trade Petroleum locations Refineries location orderbook as % of total fleet

33 Maritime Transport Recommendations French Shipping industry should closely follow the energetic transformations about to happen in ASEAN (except containers) Monitor the medium size fleet ( EVP) shifting of market due to crew s prices to attract potential new opportunities

34 Peripheral Services Definition 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 3 rd party and transporters Banking: department specialized in shipping finance major investors in the marine industry from merchant fleet to aquaculture depending on the bank.

35 Peripheral Services Classification and certification 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

36 Peripheral Services Insurance 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, Indone sie, Thai lande, 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

37 Peripheral Services Banking 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

38 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