How Many Barriers Do Domestic Luxury Cruise Ship Equipment Enterprises Have to Break Through?

Li Qin

On September 6, China Merchants Heavy Industry (Jiangsu) Co., Ltd. under China Merchants Industrial Group Co., Ltd. named and delivered the first polar exploration cruise ship “Greg Mortimer” built for Sunstone Company of the United States, which is also the first polar exploration cruise ship built independently in China. It is reported that although the “Greg Mortimer”supporting equipment and materials are mostly foreign products, but starting from the second polar exploration cruise ship,its supporting products localization rate is expected to improve. At present, a domestic equipment enterprise and China Merchants Heavy Industry (Jiangsu) Co.,Ltd. have developed a joint R&D plan for supporting products, if the R&D goes on smoothly, more domestic supporting products will go on board series of polar exploration cruise ships subsequently built by China Merchants Heavy Industry(Jiangsu).

In recent years, several luxury cruise ship construction projects in China have been spread out, and their huge equipment demand has attracted many domestic equipment enterprises. Industry insiders said that domestic equipment enterprises have to go through research and development, certification and other barriers if they really get what they want,what’s more, they have to win the trust of shipyards and shipowners, although this cannot be done overnight, it’s not pathless.

R&D and Certification Just the Beginning

At present, domestic enterprises able to provide equipment for luxury cruise ships are largely concentrated in outfitting,materials and other fields. Different from ordinary cargo ships, outfitting of luxury cruise ships not only account for a large proportion of value, but also have special requirements. For example, deck dressing,insulation materials, balcony glass doors,electric fire protection doors and so on for luxury cruise ships are different from ordinary marine products, now most of them are provided by foreign enterprises.

An industry insider said if there was no intention order in the past, domestic equipment enterprises would not be ready to develop these products. Due to the small domestic luxury cruise market, not only the initial price of the developed product is not necessarily lower than the imported product, but also it is difficult to find the buyer after it has been developed.Jiang Haibin, the ship outfitting engineer of the Yellow Sea Shipbuilding Co., Ltd.,said even if there is an intention order,the equipment manufacturer will see the input-to-output ratio and see if the risk is controllable. Yellow Sea Shipbuilding once actively contacted a large equipment manufacturer in South China to develop an electric fire-proof sliding door, but the equipment manufacturer, after considering various factors including the input-output ratio, finally decided not to invest in R&D.

With increasing luxury cruise projects in China, the situation is gradually changing.Yu Jianzhong, secretary-general of the National Cruise & Yacht Design Alliance,said more and more equipment companies are willing to invest in research and development, even if there are no orders for the time being, they are willing to fight based on judgment on the future market.

Of course, this kind of R&D must be marketable, which requires equipment enterprises to actively communicate with the shipyard, understand the specific needs of the shipyard, and then develop products. Jiangsu Jingcheng Glass Co., Ltd. is doing just that. Last year, when China Merchants Heavy Industries (Jiangsu) started the construction of the first polar cruise ship, Jingcheng Glass and China Merchants Heavy Industries (Jiangsu) started the cooperative research on the glass used for polar cruise rooms and public places. Jingcheng Glass deeply digested technical requirements put forward by the polar cruise designer, observed and emulated on the site and analyzed in-built operation process and installation conditions of the first polar cruise, and arrived at consensus of prior selection of domestic glass under the premise of meeting the technical requirements of the owner and the designer with China Merchants Heavy Industries (Jiangsu) starting from the second polar cruise, and developed the corresponding product cooperative development plan. According to Chen Junlu, chairman of Jingcheng Glass, his company has started the R&D and trial production of the model room for the second polar cruise ship built by China Merchants Heavy Industries in terms of glass components, such as guest room balcony fireproof glass siding door and French windows, glass railing,windscreen, sun room, etc.

Passing certification is the second important barrier of equipment products going on board a luxury cruise ship. The supporting equipment and materials of most luxury cruise ships need to pass the EU marine equipment certification (MED), although it is not too difficult, it needs hundreds of thousands of yuan investment, and needs maintenance costs in the later stage. Others need to be certified at the request of the flag state authorities, such as the French flag ship's drinking water-related equipment, which requires the provision of certificates to meet some of the requirements of the French authorities.

Yu Jianzhong said that at present, many a land in-built enterprise is turning to the marine market and is willing to provide equipment for luxury cruise ships,but they are facing the problem of certification for gong on board luxury cruise ships. Because the luxury cruise ship construction has just started in China,the certification of related equipment products is basically in the primary stage, hence slow certification speed and long certification cycle. “The products embarkation certificate of an in-built enterprise in Foshan has been processed for nearly two years, and so far it is yet to come out.” Yu Jianzhong said in terms of fire prevention certification, because there are few inspection institutions with fire certification qualifications, if products want to carry out fire prevention certification, they will have to queue up for several months. China Classification Society (CCS)has done a lot of work to promote the certification of luxury cruise equipment and materials, but the said certification in China still needs to be further accelerated.

Shipyard and Shipowner Approval: Not the Ultimate Barrier

In fact, for domestic shipyards, if domestic equipment products are the same as foreign products in the aspects of design, technology and quality, they prefer to select domestic products. Jiang Haibin said the Yellow Sea Shipbuilding has built a number of ro-ro passenger ships and luxury cruise ships. The requirements of the equipment products are that the quality or technical level should be topclass, although not necessarily the best, it should be the highest cost-effective； and there should be smooth communication and good services, so that the cost can be obviously reduced and the efficiency be improved.

Excellent quality and technology is the first factor for shipyards to choose luxury cruise ship equipment products.Industry insiders said that at present, the quality of some equipment products is still more stable for foreign brands. There are still mixed and uneven problems in domestic products, and even some enterprises are speculative in certification and other aspects, or provide different quality products according to the amount of the order. As a result, shipyards are ultimately afraid to use, or even directly ignore domestic products. “Domestic enterprises must have the consciousness of building ‘fine products’. If they still follow the idea of low price competition,then the process of providing luxury cruise ships in domestic enterprises will be much delayed,” said the industry insider.

Nevertheless, for domestic enterprises that have never had an embarkation case, even if the quality and technology are excellent, they will also face doubts from the shipyard. Because the first "eat crab" shipyard not only need to do a lot of experimental work, but also takes a lot of risks. “A mature product is expensive, but it doesn't go wrong.With a new product, who is to blame if something goes wrong?” “When the shipyard adopts new domestic products, it can sometimes reduce costs,” Mr. Jiang said, “but if there is a problem or even a delay in delivery, the added cost is not comparable to the reduced cost. Domestic products need time and practice to win the trust of shipyards.

Domestic equipment products should not only take down the shipyard,but also overcome the shipowner if they want to embark the luxury cruise ship. To be exact, the shipowner is more critical and decisive than the shipyard. It is very difficult for domestic equipment enterprises to convince shipowners, in addition to high quality and technical level of products, it also requires that design, style and others have “appetite for shipowners”, as well as the global service network and so on, and most of the shipowners of luxury cruise ships are foreign enterprises, which are also more difficult to communicate with.The reporter learned that a domestic intelligent door lock manufacturer has approached the shipowner together with a global service partner in order to strive for providing a luxury cruise ship for a European shipowner. After more than one-month talks for a month, the manufacturer said the shipowner is very picky, the process is very difficult, and the work is very complex.

The industry insider said domestic products equipment luxury cruises have many more hurdles to cross, in the process, from the industry perspective,a lot of work need to finish as soon as possible, such as, accelerating to develop luxury cruise group standards and industry standards, changing the present situation that now many companies want to do but don't know to follow what standards； establishing an industry platform in which relevant enterprises and products are classified and listed to eliminate communication barriers. Only by carrying out the work as soon as possible, can our equipment enterprises be assisted in “making a breakthrough” all the way to reach the“other shore”.