KUALA LUMPUR, Malaysia, Dec. 22 /PRNewswire/ -- Demand for global operational shipping fleet is expected to decline 1.37 per cent in 2010 and 2.3 per cent in 2011 due to cancellations of new ships, says Frost & Sullivan.

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Mr. Kumud R. Jha, Consultant at Frost & Sullivan Transportation & Logistics Practice, Asia Pacific said that the average age of world fleet will increase due to the decline of new ships.

New analysis from Frost & Sullivan (http://www.transportation.frost.com), Asia Pacific Commercial Shipbuilding Market, finds that the market earned revenues of US$44 billion in 2008 and estimates this to reach US$52 billion in 2014.

He advised new entrants into the shipbuilding industry to focus on the ship repair segment, as capital requirement is smaller which will ensure adequate cash flow and sustainability.

"Ships incur operational and repair costs on a regular basis, irrespective of whether they are operational or not," Mr. Jha said, adding that this acts as a constant source of income and ship repair companies are less affected during economic slowdown.

He added that shipyards must also undertake a realistic assessment of their throughput capacity and restructure themselves to better utilize and optimize their processes.

Mr. Jha noted that Vietnam and India have been the emerging markets for ship repairs. "With low labor cost, government support, and high traffic density, Vietnam and India have the potential to become major shipbuilding countries," he said.

South Korea, China and Japan were the three biggest shipbuilding countries in the world. South Korea was the leader in the shipbuilding industry in 2008 with more than 138 million metric tons (MT) order book. The country's continued success in this industry is attributed to the use of latest technology and shipyards with the highest capacity.

China's shipbuilding market share increased to 33.4 per cent in 2008 from 29.6 per cent in 2007 primarily due to cheaper production costs. Japan's shipbuilding market share was at 17.3 per cent in 2008.

Meanwhile, Europe has a 4.7 per cent market share in the global shipbuilding market and its orders are mainly for cruise ships. However, Europe has seen its market share declining over the years due to competition from Asian shipbuilders.

Mr. Jha also said that many big shipping lines are currently favoring green ships due to increasing stringent regulation and rising awareness for the environment. "Greenfield yards are also being built to reduce the carbon spent on building new ships," he added.

If you are interested in more information on the Asia Pacific Commercial Shipbuilding Market study, send an e-mail to Alice Chia, Corporate Communications - Asia Pacific, at alice.chia@frost.com, with your full name, company name, title, telephone number, company e-mail address, company website, city, state and country.

Asia Pacific Commercial Shipbuilding Market is part of the Automotive & Transportation Growth Partnership Services program. All research services included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants.

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                      Asia Pacific Commercial Shipbuilding Market
                                        P2B6-18

    Contact:

    Alice Chia
    Corporate Communications - Asia Pacific
    P: +603.6204.5899
    E: alice.chia@frost.com

SOURCE Frost & Sullivan

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