Ship conversion refers to modification and upgrading process of existing ship’s structure or equipment to fulfill new requirements. It involves various processes such as hull reconstruction, engine upgrade, outfitting, and life extension. Ship conversion helps extend life of old ships and provides advanced features as per latest market needs and technologies. It enables ship owners and operators to upgrade their ships as per changing maritime regulations regarding safety, security, and environment protection. Hence, ship conversion plays a vital role in the shipping industry by extending economically the operational life span of existing vessels.
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 major trends in the ship conversion market is increasing adoption of green technologies. Stringent emission regulations by International Maritime Organization (IMO) to curb air and water pollution are driving increased focus on sustainability in the shipping industry. This is propelling ship owners and operators to retrofit their existing fleet with green technologies such as ballast water treatment systems, exhaust gas cleaning systems, and waste heat recovery systems. Adoption of such eco-friendly technologies helps ships comply with emission norms as well as improve fuel efficiency. Additionally, rapid growth in offshore oil and gas exploration activities is augmenting demand for offshore support vessel conversions to carry out logistics and supply chain operations in offshore oilfields.
Threat of new entrants: The ship conversion market has moderate threat of new entrants due to the high capital required to enter this market. Bargaining power of buyers: Buyers in this market have moderate bargaining power due to the availability of alternatives in the market. Bargaining power of suppliers: Suppliers have low to moderate bargaining power as there are many raw material suppliers in the market. Threat of new substitutes: There is low threat of new substitutes as ship conversion is a unique service with specialized skills and infrastructure required. Competitive rivalry: The ship conversion market witnesses high competition among existing players.
The global Ship Conversion Market is expected to witness high growth, exhibiting CAGR of 7.7% over the forecast period, due to increasing seaborne trade activities and demand for specialized ships.
Regional analysis: Asia Pacific dominates the market and is expected to grow at highest CAGR during the forecast period due to large presence of key players such as Sembcorp Marine, Hyundai Heavy Industries and CSSC Chengxi Shipyard in the region. Countries like China, South Korea and Japan are major contributors to the regional market.
Key players operating in the ship conversion market are 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, HHIC-Phil. Key players are focusing on mergers & acquisitions and innovation in service offerings to strengthen their position in the market