Page 54: of Maritime Reporter Magazine (November 2004)

Investment in Design

Record Spend on Propulsion?

By David Tinsley

With commercial shipbuilding output expected to top 40-million gt in 2005 and 2006, attended by a shift to higher installed powers, the global spend on marine propulsion systems is set to hit record levels. A new report from analysts Douglas-Westwood forecasts that the value of the propulsion market will grow to $5.3- billion in 2004, from last year's $4.7-billion, and is anticipated to reach $5.7-billion in 2005 and nearly $5.9-billion in 2006.

The World Marine Propulsion Report 2004-2008 indicates that main engine power installations for 2004 will reach 18-GW. and that new records will be set in each of the two succeeding years, peaking at some 20-

GW in 2006. One of the strongest influences is buoy- ant investment in the containership market, character- ized by the trend towards higher capacity, more pow- erful newbuild tonnage.

Taking a five-year view, it is anticipated that the mar- ket for propulsion systems over the period 2004-2008 will exhibit 21 percent growth, in monetary terms, rel- ative to 1999-2003, and that the market for engines will increase by 22-percent.

Main engines will account for $3.85-billion of the total $5.3-billion propulsion plant expenditure for new installations in 2004, increasing to $4.15-billion and $4.29-billion for 2005 and 2006. On this basis, prime movers would up more than 70-percent of the value of the overall shipboard propulsion systems.

In 2007 and 2008. with newbuilding production falling back to around 35 million gt, the annual value of propulsion business would show a commensurate fall to just under $5 billion, with an engine market of around $3.6 billion.

To give added perspective to the sector's economic worth, the $5.3 billion propulsion market for 2004 may be set against a projected, total shipbuilding output value of some $42 billion. The latter is forecast to grow to around $45 billion in each of the peak years of 2005 and 2006. The compilers of the new report forecast that

China's shipbuilding industry will account for 13 per- cent of main engine installations by value by 2008, compared with 7 percent in 1999. Although South

Korea is also set to deliver substantially more vessels over the 2004-2008 period, its share of global engine value is not expected to increase much beyond the 30- percent achieved in 2003. "The high power requirements for container vessels

A healthier than normal orderbook has propulsion makers seeing green. mean that this vessel sector will continue to require the greatest amount of main engine power," say the report's authors, adding "This will be followed by tankers and bulkers/general cargo vessels." Surging investment in LNG carriers also has a pronounced pro- portional effect on power demand.

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