Singapore offshore and marine industry ripe for consolidation

DESPITE a gradual recovery in the offshore and marine industry, Singaporean yards have only seen a modest improvement in new orders as they are getting a smaller share of the pie with intense competition from Chinese and Korean yards.

This is most evident in the global production unit construction market, where Chinese yards are currently involved in about 70 per cent of floating production storage and offloading units (FPSOs) due for delivery in 2019-23, an increase from a market share of below 20 per cent in 2001-18.

The intensifying competition has come at a time of significant capacity increase in Singapore, with the total dry dock capacity growing by 45 per cent since 2013 following the completion of Sembcorp Marine's Tuas Boulevard Yard Phase I. Further capacity growth with the phased expansion of Tuas Boulevard Yard could lead to continued under-utilisation of aggregate yard capacity, even as older facilities are removed.