Ship conversion involves upgrading existing ships and vessels to improve their functionality and performance. It helps in improving fuel efficiency, increasing cargo capacity, complying with new emission norms and upgrading other features. Conversion helps ships stay relevant and optimize operations over their lifespan.
The global Ship Conversion Market is estimated to be valued at US$13.46 Bn in 2023 and is expected to exhibit a CAGR of 7.7% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market key trends:
One of the key trends in the ship conversion market is the increasing focus on upgrading existing container ships to use liquefied natural gas (LNG) as fuel. This is mainly due to the stringent emission norms by International Maritime Organization to reduce air and marine pollution. Converting container ships to use LNG helps cut carbon dioxide emissions by 25% and emissions of other air pollutants by nearly 100% thus providing a sustainable and environment friendly option. Several shipowners are increasingly opting for LNG fueled ships to gain a competitive edge and meet IMO’s emission cuts mandate.
Strength: Ship conversion helps in upgrading and enhancing the existing capabilities of ships in a cost-effective manner. It allows for refitting existing infrastructure to comply with new regulations or customer requirements.
Weakness: Ship conversion projects require shutting down operations during the reconstruction phase, resulting in loss of revenue. Additionally, converted ships may not be able to achieve the full capabilities of a new build.
Opportunity: Growing global seaborne trade and expanding cruise industry is driving the need to refit ships and cargo vessels with advanced technology. Stringent environmental norms also necessitate regular retrofitting of ships.
Threats: Delays in conversion projects or cost overruns can be financially detrimental. Furthermore, supply chain disruptions during the COVID-19 pandemic impacted shipyard operations and conversion schedules.
The global ship conversion market is expected to witness high growth, exhibiting CAGR of 7.7% over the forecast period, due to increasing global seaborne trade and expansion of cruise industry.
The Asia Pacific ship conversion market is expected to dominate the global market, with China, South Korea, Japan, and India being major contributors. Asia Pacific shipyards have robust infrastructure and a skilled workforce to carry out large-scale conversion projects efficiently.
Key players operating in the ship conversion market include Sembcorp Marine, Hyundai Heavy Industries, CSSC Chengxi Shipyard, Damen Shipyards Group, Cochin Shipyard, Fincantieri, Orient Shipyard, VARD Group, Wilson Sons, Oman Drydock Company, Bahri Abha Shipyard, Abu Dhabi Ship Building, N-KOM, Keppel Shipyard, Tebma Shipyards, Lamprell, Drydocks World, Dae Sun Shipbuilding, Shunzheng Shipyard, and HHIC-Phil.