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Five-Year Outlook For The U.S. Marine Industry By James R. McCaul, President IMA Associates, Inc. IMA has just completed an in- depth study of the entire U.S. ma- rine business. This article provides some of the study highlights. U.S. Marine Industry Shift To Commercial Workbase Changing military requirements and budget constraints will impact the composition of work available to the U.S. marine sector over the next five years. Industry focus in the U.S. will gradually shift from Naval ship construction, which drove much of the marine business through the 1980s, to a growing commercial market. There will be an increasing flow of orders for product tankers, offshore equipment, cruise ship re- furbishments, small passenger ves- sels, megayachts, river barge con- struction, etc. Importantly, the fu- ture workbase will gradually shift from military specification to com- mercial standard construction. This will open opportunities for a num- ber of companies not geared to mili- tary equipment requirements. Increased Opportunities From Cruise Ship Refurbishment There are currently 95 cruise ships servicing the North American cruise trade. Competition for pas- sengers is intense—and owners find it necessary to continually upgrade and modernize equipment and fa- cilities. As a result, cruise ships Cruise ship repair and refurbishment, like Bethship Sparrows Point s work on the Celebration, are expected to be a staple of U.S. yard's over the next five years. 40 provide a continuing flow of repair and refurbishment opportunities. The report identifies 16 cruise ships which look like highly promising refurbishment prospects over the next five years. It is estimated the revenues associated with these re- furbishments will total $800 million to $1.2 billion. OPA Will Force Coastal Tanker Replacement The Oil Pollution Act of 1990 will have a major impact on the domestic tanker sector. It is estimated that 40 to 50 coastal tankers will be forced into retirement between 1995 and 1998 as a result of OPA 90 double bottom requirements. Replacement orders for coastal product tankers will begin in the near future. They will include some 20,000 to 40,000 dwt integrated tug barges. Replace- ment orders for Alaskan crude car- riers are more distant prospects— but some very interesting mid-body contracts will be placed within the next year or two. Orders For Navy Sealift Ships Expected In Spring Construction of additional sealift ships has become a top priority to defense planners. A requirement for 28 to 49 additional ships has been sighted as a program objective. As described in a companion article in this issue, IMA believes at least 10 sealift ships will be ordered over the next five years. Final design/ construction contracts will be placed next spring. All of the ships will be built to commercial standards. Obsolete Equipment Will Spur Future Offshore Sector Orders Low natural gas prices—com- pounded by a surplus of offshore equipment—will continue to dampen construction demand for rigs and support vessels over the next few years. However, a large number of these rigs and vessels are approaching physical obsolescence or becoming marginally marketable. As a result, IMA expects replace- ment orders for offshore rigs and support vessels to grow through the mid-1990s. Meanwhile, platform construction will continue to pro- vide a flow of fabrication activity-— including orders for a number of platforms for ultra deepwater pro- duction. Continued Orders For Ferries & Small Passenger Vessels Yards in this country have built an average of 190 ferries and small passenger vessels annually over the past ten years. This little—appreci- ated sector has been one of the most dynamic marine businesses in the U.S. over the past decade. Ouranaly- sis indicates that a substantial con- tinued business base can be ex- pected. Megayacht Building: Market Bright Spot A handful of U.S. builders have established a leading presence in the megayacht construction busi- ness. This is one of the few marine business sectors active in the export market. U.S. builders have deliv- ered megayachts to customers in Asia and Europe. IMA's analysis indicates that megayacht construc- tion will continue at a rapid clip— and provide a continued business base over the next five years. Waterway Barge Construction Will Grow Rapidly Construction of barges and tow- boats expanded at a rapid rate dur- ing the 1970s and early 1980s. The market collapsed—leaving behind a huge surplus of equipment and a number of bankrupt operators. IMA's analysis indicates that barge demand is coming more in line with equipment supply. IMA expects re- placement requirements for barges to grow over the next several years— reaching a construction level of 750 to 1,250 barges annually in the sec- ond half of the 1990s. IMA's new report, "Five Year Outlook for the U.S. Marine Indus- try," examines future prospects in each of 24 marine market segments. The newly published 190-page re- port examines ship construction and major modification prospects avail- able to shipbuilders, equipment manufacturers and other supplies. Report 7119 is available for $575. To order, contact: IMA Associates, 600 New Hampshire Ave., NW, Suite 140, Washington, D.C. 20037; tele- phone: (202) 333-8501; fax: (202) 333-8504. Maritime Reporter/Engineering News
