Responding to challenges in the newbuilding market plagued by overcapacity and decline in new orders, Chinese shipbuilding conglomerate COSCO Shipyard Group (CSG) has decided to switch focus so as to adapt to these changes.

In 2014, due to the sluggish global economy, global shipbuilding orders declined 34.7% year-on-year to 39.69 million CGT.

As a result, the company announced plans to direct its resources to specialized products such as the 3000+teu containerships, LR1/LR2/SUEZ shuttle tankers, small to mid-sized product oil tankers, module carriers and livestock carriers.

“We expect the short term performance of the dry bulk shipping market and bulk carrier building market to remain sluggish. However, we can see some demand for eco-ships, semi-sub carriers as well as LNG and LPG carriers,” CSG said in a presentation at its annual general meeting held on April 24th.

The key steps will see CSG strengthen its offshore repair and conversion market aimed at surpassing low-end competition and staying ahead of competition.

“As falling oil prices have helped shipping companies to reduce the bunker cost, ship owners’ demand to own and repair vessels has increased. Upon the pending implementation deadlines for international regulations on ballast water treatment and exhaust gas emission reductions, the ship conversion market has expanded in 2014, and will further grow in 2015. Ship Repair and Conversion Market Meanwhile, although the global oil prices are on the decline, we can still see some demand for FPSO conversions.”

“In addition, low oil prices have increased oil and gas consumptions. With the growth of clean energy such as LNG, the conversion market for FLNG and FSRU will continue to expand, especially in the Asia Pacific region,” the company added.

The shipbuilder said that while maintaining a position in the drilling rig market, it aims to move into the construction of FPSOs and high-end offshore support vessels such as OCV and SSV.

“We will also actively develop technologies for FSRU and FLNG and try to achieve breakthroughs in the conversion market of the above-mentioned projects,” the company revealed.

CSG has six subsidiary shipyards, located in Dalian, Nantong, Qidong, Zhoushan, Guangdong and Shanghai.