Asia’s rich maritime history and development has laid a strong foundation for the growth of the region’s marine and offshore industries.
Factors such as increasing global trade, the ongoing transition towards cleaner energy sources, the implementation of digitalisation and automation, infrastructure investments, are driving the significant expansion of Asia’s marine, particularly in ship and boat building and repairing, and the offshore industries.
Strong Growth in Ship and Boat Building and Repairing
The “Ship and Boat Building and Repairing Global Market Report 2024” highlighted that the market size is expected to see strong growth in the next few years; growing from $284.22 billion in 2023 to $303.65 billion in 2024 at a compound annual growth rate (CAGR) of 6.8%; and will increase to $390.86 billion in 2028 at a compound annual growth rate (CAGR) of 6.5%.
Asia-Pacific was the largest region in the ship and boat building and repairing market in 2023. China alone accounted for about 40% of global ship completions in recent years. The region's shipyards have expanded their capacities and capabilities, producing a wide range of vessels including container ships.
According to Alphaliner, the month of April 2024 set a new record for box ship deliveries. Some 50 newbuilds were delivered with 330,000 teu in capacity. This is equivalent to a 1.1% share of the entire global market. A month earlier, 41 newbuilds with 260,000 teu of capacity were delivered. Cosco Shipping, headquartered in Shanghai China, scored the largest volume of deliveries with five ships and total capacity 58,700 teu.
In Singapore, it was reported that over $20 billion was secured in orders in 2023. “Our shipyards are humming with activity, with skilled hands building vessels of all shapes and sizes,” said Second Minister for Trade and Industry Dr Tan See Leng.
Asia emerges as world’s most prominent offshore wind region
When more than 130 countries agreed to meet the historic goal to triple renewable energy capacity to at least 11,000 gigawatts (GW) by 2030 to phase out fossil fuels and meet the 1.5°C global warming threshold, the entire offshore wind market takes on a new prominence across Asia. Global Wind Energy Council Market Intelligence foresees Asia emerging as the world’s most prominent offshore wind region, home to nearly 40% of installation by 2050.
GWEC Market Intelligence’s latest market outlook predicts that China will continue to install the lion’s share of offshore in Asia in the first half of this decade. Taiwan is expected to be the largest offshore market in Asia after China in new installations in the same period. The market will become more diversified from 2025 onward with more projects set to be commissioned in Japan, South Korea and Vietnam.
According to the Global Wind Report 2024, China led the world in annual offshore wind development for the sixth year in a row with 6.3 GW commissioned in 2023, making up 58% of global additions and bringing its total offshore wind installations to 38 GW, which is 3.7 GW higher than Europe. Taiwan is in considerable distance with 2.4 GW. South Korea is currently constructing its largest project so far – the Jeju Hanlim offshore wind farm (100 MW).
South Korea’s Ministry of Trade, Industry and Energy (MOTIE) has revealed its plans to invest KRW 710 billion ($545 million) into next-generation shipbuilding technology and carbon-free fuels. The new strategy “K-Shipbuilding Strategy for Next-Generation Market Dominance” aims to respond to internal and external challenges for Korea to take the lead in the next-generation shipbuilding market through a public-private joint strategy on creating future growth engines and heightening the global competitiveness of Korea’s shipbuilding industry. MOTIE plans to seize over 80 percent of the next-generation shipbuilding market.
In India, good progress has been made to finalise the first offshore wind seabed tender, including the publication of the revised ‘Strategy Paper for Establishment of Offshore Wind Energy Projects’ showcasing three models to award 37 GW of capacity through 2030.
With a large Exclusive Economic Zone and high wind speeds at sea, Japan’s geographic conditions are conducive for offshore wind. The sector is poised to grow over the next 20 years, with plans to install 10 GW of offshore wind by 2030, and 30-35GW by 2040. According to EnterpriseSG, Japan’s rising demand for offshore wind is matched by its commitment to researching and piloting innovative low-carbon technologies, an effort supported by government, private sector, and research institutes.
Over in the Philippines, the World Bank Group released a roadmap for offshore wind development, which shows the country has the potential to generate up to 21 GW of power through offshore wind by 2040. This would make up about 21% of the total energy supply and contribute massively to the Philippine government’s goal of achieving 50% reliance on renewable energy by that same year.
A Memorandum of Understanding to deliver one of Vietnam’s first offshore wind power assets has been signed by DNV, IE, and PTSC M&C in 2023. It was reported that while Vietnam does not currently have any active offshore wind power assets, the draft National Power Development Plan VIII sets a target of 7 GW of offshore wind power development by 2030. Dr. Sc. Tran Ky Phuc, General Director at the Institute of Energy was quoted as saying, "Located in the strong and consistent Asian monsoon zone with more than 3,200km of coastline, Vietnam has tremendous potential for offshore wind power development.”
Singapore—A Global Offshore and Marine Hub
As the global offshore and marine hub, Singapore is well positioned to capitalise on the growing demands for ship repair, shipbuilding, rig-building and offshore engineering in the region. Enterprise Singapore woos businesses and investors worldwide to leverage on Singapore’s forefront position to develop new capabilities, improve business efficiency, and capture new revenue streams in emerging green growth segments.
To better reflect the pursuit of new opportunities in the industry, the Association of Singapore Marine Industries (ASMI) during its 55th Anniversary Dinner 2024 was renamed "Association of Singapore Marine and Offshore Energy Industries, “Offshore Energy” represents the next bound of development for the industry, noted Second Minister Dr Tan.
The Republic also has a thriving business in oilfield equipment manufacturing, as well as the building and chartering of offshore supply vessels. Singapore is also well-placed to become Asia’s Liquified Natural Gas (LNG) hub and is positioned to take advantage of the growing demand. More than 100 Singapore marine and offshore engineering (M&OE) companies are participating in, or exploring, projects in maritime decarbonisation and offshore renewables.
According to the 2024 Leading Maritime Cities (LMC) report from DNV and Menon Economics, Singapore will maintain its position as the world's top maritime city through 2029. The report cites Singapore's extensive vessel fleets, strategic location, pro-business policies, and leadership in maritime energy transition as key factors reinforcing its status as the top maritime city.
In 2024, Singapore also ranked first in the Leading Maritime Cities report, followed by Rotterdam and London.
To stay on top of the game and help businesses gain a competitive edge, Singapore also invests in cutting-edge maritime technology.
In April 2024, Seatrium Limited, a leading engineering solutions provider to the global offshore and marine industry, and Singapore’s Agency for Science, Technology and Research (A*STAR) inked a Memorandum of Understanding to explore research opportunities in new energies and artificial intelligence (AI) to develop innovative products and engineering solutions for the Offshore and Marine (O&M) sector.
The collaboration combines Seatrium’s insights into trends and opportunities within the O&M sector with the research capabilities of A*STAR and its National Platforms such as the Technology Centre for Offshore and Marine, Singapore (TCOMS), a national R&D centre dedicated to the Marine & Offshore and Maritime sectors. The parties aim to boost the O&M sector’s pivot to new energies efficiently and reliably, and support the global transition to a low-carbon economy.
Mr. Chris Ong, CEO of Seatrium, was quoted as saying, “The collaborative efforts between Seatrium and A*STAR are geared towards accelerating the energy transition and maritime decarbonization. By combining our knowledge and pushing boundaries, we aim to develop advanced energy solutions that will help the industry adopt renewable sources more quickly.”
The Business Times reported that Seatrium has obtained a series of major contracts with an aggregate value of S$350 million. The contracts, to be completed by end-2025, were awarded to the group’s wholly owned subsidiary, Seatrium Repairs and Upgrades. They include repair, upgrade and conversion works scheduled mainly to start in the second quarter of 2024.
Seatrium, will convert three liquified natural gas (LNG) carriers belonging to Turkish energy company Karpowership, into floating storage and regasification units. The agreement with Karpowership also comes with an option for a fourth project.
Seatrium will also be performing maintenance and upgrading works on a floating production storage and offloading (FPSO) system owned by Australian petroleum company Woodside Energy, and operated by floating production solutions provider Modec Management Services. 39% of Seatrium’s current orderbooks are projects serving the offshore renewables sector.
Another noteworthy shipbuilder and shipowner and one of the world’s largest aluminium shipbuilders is Penguin International. The company builds and operates eco-friendly ferries which are expected to cut carbon dioxide emissions by about 6,000 tonnes annually.
Specialist shipbuilder Strategic Marine (S) Pte Ltd is also making waves with its green vessels. In March 2024, it launched South-east Asia’s first hybrid crew-transfer vessel, which is propelled by both conventional diesel-powered engines and batteries.
Another Singapore company, C-LNG Solutions, founded in 2020 by engineers with experience in offshore oil and gas, has patented its own type-C LNG storage tank, which is more cost-efficient than conventional type-A, type-B or membrane tanks. Using this technology, C-LNG has delivered two large-scale LNG fuel-supply systems for vessels with a capacity of 14,000 twenty-foot equivalent units (TEU) each. These vessels are operated by Mediterranean Shipping Company, the world’s largest container shipper. In 2023, it also completed the world’s largest container-vessel retrofit project, fitting a 3,260 TEU vessel with an LNG fuel-supply system.
Asia's marine and offshore industries are poised for transformational growth.
As global demand for trade, clean energy and maritime connectivity continues to rise, Asia offers immense opportunities for investments, partnerships, job creation and prosperity in these dynamic sectors. The region’s growth trajectory is indisputable, and Singapore leads the way through innovation, digitalisation and sustainable practices.
Singapore has several trailblazers in the industry that have pivoted their businesses to meet the needs of the global growing markets.
In the next five years, the Ministry of Trade and Industry will pump in S$100m Support Package for enterprise and workforce transformation.
The Association of Singapore Marine and Offshore Energy Industries, Workforce Singapore, and EnterpriseSG will launch a Marine Digitalisation Champion Programme with the goal of equipping Singaporeans with fresh digital skills for higher-value work in the M&OE sector.
Such strategies will enable businesses to seize new green growth opportunities and fuel the rapid growth of the robust industry for many years to come.