UPDATED: CSSC, Fincantieri joint venture to built five 133,500 gross ton ships, first due in 2021 – report

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Written by Kari Reinikainen Kari Reinikainen

Category: Top Headlines Top Headlines

Published: 08 July 2016 08 July 2016

UPDATE:

A spokesman for Carnival Corporation & plc said the world’s largest cruise shipping group is pleased with the completion of a joint venture between China State Shipbuilding Corporation (CSSC) and Fincantieri, but he declined comment on Csrnivsl group’s link to the reported five ships the joint venture has decided to build.

“We are pleased with the progress being made on multiple fronts including the completion of this joint venture agreement between CSSC and Fincantieri. The cruise market in China will someday become the largest cruise market in the world, and these joint venture initiatives will help propel that growth for years to come,” he told Cruise Business online.

In October 2015, Carnival Corporation & plc, China Investment Corporation (CIC) and CSSC signed a joint venture agreement to set up a cruise brand to cater for the Chinese source market.

The agreement was signed during a state visit to London of Xi Jinping, the Chinese president. The brand would be part of Carnival plc, the British holding company of the Carnival Corporation & plc group and its vessels could fly the British flag, it was said at the time.

 

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A joint venture ship owning company 60% controlled by the China State Shipbuilding Company (CSSC) and 40% by Fincantieri, the Italian shipbuilder, will build five 133,500 gross ton cruise ships, the first of which is due to enter service in 2021, China Daily reports on its English language website.

“State-owned China State Shipbuilding Corp and Italian shipbuilder Fincantieri Cantieri Navali Italiana SpA will establish a joint venture in Hong Kong. The joint venture will spend 25 billion yuan ($3.74 billion) building five luxury cruise liners,” the report said.

“The money will come from an industrial development fund for cruise liners from five Chinese banks, including Bank of China, Agricultural Bank of China and China Construction Bank, according to CSSC,” China Daily continued.

Under the framework, Shanghai Waigaoqiao Shipbuilding Co (SWS), a subsidiary of CSSC, will be responsible for building the liners. Chen Gang, vice-president of Shanghai Waigaoqiao Shipbuilding, said each of these ships displaces 133,500 tons and their length will exceed 300 meters. Each ship will cost around 5 billion yuan to build.

The Shanghai shipyard has already established a specialized department to start design work and they are scheduled to be built in 2017. "The cruise liners built in China will highlight Chinese elements, with the guest rooms decorated in the style of either a traditional Beijing courtyard or an old-fashioned Shanghai residential room," said Chen.

 

Dong Liwan, a shipping industry professor at Shanghai Maritime University, said cruise liners are the only high-tech ship products that China has yet to master. European shipyards, including Italy's Fincantieri, Germany's Meyer Werft, and STX France SA, account for 90 percent of total global orders. "To date, Asian shipbuilders including Japan and South Korea are incapable of either designing or building cruise ships independently," said Dong. A cruise liner is the result of the combination of many technologies. Up to 75% of the value of a cruise liner is handled by subcontractors, China Daily said.

The news came only four days after CSSC and Fincantieri unveiled the formation of a joint venture aimed at developing and supporting the growth of the Chinese cruise industry.

The today’s agreement, which follows one CSSC and Carnival Corporation &plc signed in November 2014, which provides that the joint venture will design and sell cruise ships exclusively intended and specifically customized for the Chinese and Asian market.

“These vessels will be built at one of CSSC’s shipyards, the SWS facility, on the basis of a technological platform licensed to the joint venture and to the SWS shipyard by Fincantieri, which will therefore perform the activities within its competence through the joint venture,” Fincantieri said on 4 July.