Rebecca Moore believes SunStone Ships’ newbuild delivery will lead to cruise ship orders soaring in China
SunStone Ships’ newbuild Greg Mortimer will be help open up cruise construction in China.
It is the first cruise ship to be built in China and is shortly to be delivered, with sea trials in July and its naming ceremony in September. Its delivery will boost the case for cruise shipbuilding in China. SunStone Ships chief executive Niels-Erik Lund told me the yard has been “very successful” and “we are very pleased with it”.
As the first cruise ship to be built in China, this will give other cruise operators confidence to go ahead, after seeing the smooth construction of Greg Mortimer.
There are also pressing benefits to be had by building in China. Stringent laws in Europe mean the maximum time for a shipbuilding loan to be paid back is 12 years. In China, there are no such laws so cruise operators can negotiate a longer period for loan payback.
Indeed, this was important for SunStone Ships. The cruise shipowner had originally hoped to use Ulstein in Norway to both design and build the ship, but the shipowner could not get satisfactory financing in place due to a high interest rate and limited time to pay back the loan. Therefore, it decided to use the Ulstein design and build the ship in China.
SunStone Ships’ experience of trying to get a yard in Europe will also no doubt reflect other cruise operators’ experience – all the major yards were fully booked.
If major yards do not have capacity, the other option for cruise operators is to use a smaller European yard, that, like China, does not have cruise ship experience. But some of these yards have delivered ships late due to limited resources. What swings it for China here is that its huge shipyards employ thousands of people and have the resources to prevent delays.
And backing this up is Greg Mortimer’s construction. Mr Lund said people had warned him the ship would be delivered late – and yet here it is, being delivered on time.
Of course, there are challenges to building in China, namely that it does not have experience of building cruise ships, but Greg Mortimer shows there are ways around this. The ship is European designed, European managed and uses European equipment. Indeed, Mr Lund says “What we say is we built a European ship assembled in China.”
And as Chinese yards get more experience and supply chains are built up in the country, they will be able to take on more and more of this themselves.
The delivery of Greg Mortimer will be a tipping point in persuading the cruise industry to use Chinese yards for newbuild construction.