The 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 Overview:
The ship conversion market involve modifications and refurbishment of existing ships to cater changing operational requirements or compliance issues. Major conversions involve changing the purpose of the vessel such as from passenger liner to cruise ship or cargo vessel to offshore supply ship. Products utilized in ship conversion include materials, components, sub-assemblies, equipment and marine systems. Naval modernization programs undertaken by various countries worldwide have boosted the demand for ship conversion market.
Market Dynamics:
Growing naval modernization programs is one of the key driver of the ship conversion market. Major countries worldwide are modernizing their naval fleets through ship refurbishment, equipment upgradation and change of purpose to extend service life. As per World Bank data, global military expenditure increased by 0.7% between 2020 and 2021, wherein 13% of expenditure was towards naval modernization. Growing defense budget allocation is expected to drive demand for ship conversion in coming years. Transition towards green maritime industry is another driver where existing vessels are retrofitted with emission control systems, alternative fuel engines and technologies to reduce carbon footprint. Stringent environmental regulations have necessitated such retrofitting activities thus supporting market growth over the forecast period.
SWOT Analysis
Strength: Ship conversion has three major strengths - it allows extending ship lifecycle, reduces environmental footprint, and lowers maintenance costs. Converting existing ships is far more economical than building new ones. Many ship owners opt for conversion to upgrade their fleets or change ship functions without major investments.
Weakness: Ship conversion projects require careful planning to avoid schedule and cost overruns. Complex retrofits can disrupt ship operations and extend drydock periods. Interfacing older ship systems with new components adds engineering challenges. Due to modifications, converted ships may lose some original performance parameters.
Opportunity: IMO regulations provide opportunities to convert ships for fuel efficiency and emission cuts. Demand for modifying ships into specialized roles like accommodation vessels, yachts and dredgers is growing. Developing storage and transport solutions for clean fuels like LNG offers new conversion opportunities.
Threats: Significant capacity additions through new ship orders could reduce tonnage available for conversions. Technical disruptions like autonomous vessels pose a threat until retrofit standards are established. Outbreaks and sanctions affecting key markets can decrease demand for ship conversions and retrofits in affected areas and sectors.
Key takeaways
The global ship conversion market is expected to witness high growth, exhibiting a CAGR of 7.7% over the forecast period, due to increasing demand for conversion projects to comply with stricter emission norms. The market size for 2023 is US$ 13.46 Bn.
Regional analysis
The Asia Pacific region dominates the global ship conversion market, accounting for around 35% share. Major players in China, Japan, South Korea and Southeast Asian shipbuilding hubs have captured significant conversion volumes, driven by ports modernization and navy infrastructure build-outs. Europe and North America are other major conversion markets, facilitated bydeveloped conversion infrastructure and technological expertise.
Key players
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 and Shunzheng Shipyard, HHIC-Phil. These market players have wide geographical footprints and versatility in naval and offshore conversions.
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https://www.rapidwebwire.com/ship-conversion-market-size-share-growth-outlook-2023/
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