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Global dry-dock capacity has increased by around 12 percent — and although this is not out of context with the growth of the world fleet, it must be borne in mind that considerable fleet renewal has taken place and the age profile of the fleet has declined, (and therefore by implication the demands for repair work).

Drewry's survey analyzes the markets and forecasts that geographic split in market share is set to alter again compounding the intense competition currently in the shiprepair business. The Far East is expected to attain 11 percent of the global market share of revenue by 2003 with SE Asia growing by 1.7 percent by the same period.

As shiprepair revenue is unlikely to generate extraor- dinary gains on a per ship type basis, it would be nat- ural to assume that geographical differences are also unlikely to see any radical movements. However, this is not necessarily the case as the high incidence of wide ranging capacity and competition within the market plus the elasticity of shipyard costs given such factors as exchange rates and outsourcing of labor has meant that certain regions have found themselves more com- petitive and achieved greater revenues.

Far Eastern yards are forecast to make significant strides in terms of market share as China's intention to expand facilities and utilize cheap resources will see them gain further market share from Japan and Singa- pore. It is anticipated that S. Korea may make gains over the forecast period as a result of the economic cri- sis suffered by many of the shipbuilding yards. The

Japanese share of market revenue is forecast to decline further overall as even its strong reliance on domestic work will be reduced following a lowering of R&M budgets from domestic operators.

The Middle East is forecast to increase its market share through tough competition with the development of specialized projects such as gas and conversion work. The Middle East has been engaged in a fierce battle with its rivals in Singapore to become the presti- gious number one center for large tanker repairs. By the end of 1997 many observers felt that this had been achieved through the large volume of stemmings for high profile tonnage. Given that they had a cost advan- tage of approximately three to five percent, however, the impact of relative currency advantages secured by the Singapore yards in recent months has brought them back in line. SE Asia is also forecast to increase its per- centage share of revenue with its ability to undertake steel replacement work or tank cleaning and coating at lower cost. The financial crisis suffered by the major- ity of Asian countries is likely to have an inverse effect on the shiprepair markets and actually prove a boon to shiprepairers as they take advantage of consistent exchange rate gains against the U.S. dollar, according to Drewry. Much of the work from domestic ship own- ers in the short to medium term will be lost as these owners will seek to reduce overheads at the expense of

R&M budgets. However, Drewry predicts that growth will nevertheless remain positive and thus attract inter- national owners in the wake of cheaper exports and thus increase the captive market share for shiprepairers in Southeast Asia.

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