‘Breakthrough’: Chinese shipyard set to take lucrative orders from Nordic cruise operator

Shanghai Waigaoqiao, a subsidiary of China State Shipbuilding Corporation (CSSC), has secured potential orders from a Nordic cruise operator, marking the entry of Chinese shipyards into the lucrative cruise ship construction sector amid the dominance of European firms.

The memorandum of understanding (MOU) was signed by Shanghai Waigaoqiao and Nor Cruises from Norway on Wednesday at SMM Hamburg, a trade fair on shipbuilding, machinery and marine technology in Germany. The deal involved two 84,000-tonne midsized cruise vessels with an option for three more, according to Waigaoqiao.

The MOU would pave the way for the first batch of such foreign contracts for Waigaoqiao, and, broadly, for China’s shipbuilding industry, as it attempts to scale the value chain and enter the technology and capital-intensive cruise ship market.

While Chinese shipyards have dominated global cargo and container ship segments, with strong order books for LNG vessels, they have not yet broken into cruise ship building, a market cornered by European firms.

Against this backdrop, the MOU carried significance, said one expert.

“Though an MOU is not automatically an order or construction contract, it still represents a breakthrough: foreign cruise ship operators are starting to look at China … to seriously engage with builders there,” said Zeng Ji, a professor of ocean science and engineering at Shanghai Maritime University.

“The MOU’s execution into a formal order will help Chinese shipbuilders prove and showcase their capabilities to undertake high-end foreign cruise ship projects and compete for more business. In that case, they may break the long-held monopoly by German and Italian shipyards,” he argued.