A more than 100% increase in deadweight capacity in the multi-purpose liner market over the last five to six years has taken its toll on rates and owners of high specification tonnage such as SAL are moving more to focus on complex project work.
“The multi-purpose market is now so heavily oversupplied, my own view is we are not expecting to see a market recovery of any substantial nature, I think the market is now tipped too far in one direction and we are seeing a systemic change in the rate levels that are achievable in this sector,” Justin Archard, managing director Asia Pacific and Oceania told Seatrade Global.
As a result the Hamburg-headquartered company owned by Japan’s K Line group is seeing a gradual shift away from its core semi-liner business.
“Year upon year you’re seeing smaller reliance on the semi-liner business and greater reliance on the projects business it’s going that way. Ultimately you will see that a company like SAL will either make a huge commitment to the semi-liner business, which is unlikely, or we will by just generational change move fully and directly into projects. That process has already commenced,” he explained.
Underscoring this change has been the development of SAL’s fleet with vessels that offer 1,400 tonnes and 2,000 tonnes lifting capacity. The company, which designs its own vessels, has two 183 Type vessels with 2,000 tonnes lifting capacity and four 176 Type vessels with 1,400 tonnes lifting capacity. With larger lifting capacity and deck space the vessels can undertake much more complex project. The 183 Type vessels are also fitted with DP1 and DP2 capabilities allowing them to undertake subsea work.
One of the driving forces of the growth in the projects business has been Australian resources boom with vast developments in remote locations with no marine infrastructure.
“Customers in Australia have looked at heavy lift vessels as almost a Swiss pocket knife, able to pull out a blade and do something different with it,” Archard explained.
“We’ve seen particularly in Australia an evolution of techniques and new ways of building infrastructure that was never considered in the world before then.” Underlining how little infrastructure there is in some cases SAL vessels have been used assemble a prefabricated wharf, which it has shipped in. (pictured below)
He described the relationship as “symbiotic” customers build to the limit of the vessel’s capabilities, and when the company orders larger more complex vessel customers will then build to the limits of the new ships.
Among the projects SAL has been in the LNG developments Gorgon, Wheatstone and Ichthys. “We are currently working on Ichthys project in Darwin in a very big way,” Archard said.
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