The recent contract won by SembCorp Marine's Jurong Shipyard to build two container ships may not seem like the biggest of deals. Worth $110 million, the order calls for the building of two vessels each capable of carrying 2,600 twenty-foot equivalent container units for Taiwan's Wan Hai Lines, with options for two more similar vessels exercisable by October. The local industry used to be dominated by ship repairs, offshore industry vessels and support craft, floating production craft, pipeline layers, vessel conversions and tug boats. But Jurong Shipyard - despite the competition from South Korea, China and Japan, has quietly carved a niche for itself in building small to medium-sized container ships.
SembCorp Marine's foray into the building of container ships began in 1997 with an order for four relatively tiny 830 TEU vessels that the shipyard designed and built in-house. Since then, there has been a steady flow of orders. By 2000, Jurong Shipyard had secured orders for six larger 1,078 TEU capacity vessels, and is currently well into production of two much bigger 2,500 TEU ships. This new order represents the biggest container ships ever built in Singapore - and are of a local design. Despite the likely narrow margins, SembCorp Marine is confident it will make a profit from the work.One factor in Singapore's favour is that the dominant South Korean yards are full. A small order of medium-sized vessels would struggle to find a construction slot in yards pumping out massive ships to fill bulk orders from mainline customers. Jurong Shipyard's niche market proves that some customers are willing to pay more for quality construction and timely delivery - even in an industry where cut-throat competition and slim margins are notorious. Its quiet success should alert other local yards to at least look into the market's potential - before they miss the boat.