Thai Shipbuilding
To strengthen the navy's combat readiness, the government expanded its naval repair facilities with aid from the United States, Italy, and Japan. As a result, Thailand produced a variety of naval vessels, including six fast coastal patrol boats, and had an LST (landing ship, tank) under construction in 1987. Despite the ambitious scope of plans for a domestic defense industry, however, production failed to reach the levels desired.
Shipbuilding and repairing industry is considered the defense related industry by all nations since it can support national security and economy during wartime. The country is also home to eight large shipyards with a production capability of 5,000-180,000 DWT and 14 medium shipyards of up to 3,500 GRT. Over 300 firms are involved in the shipbuilding industry, 30 of which have registered capital exceeding US$6.5 million.
Good prospects were seen for the shipbuilding industry in Thailand, as the Cabinet on 18 January 2005 approved a package of measures to help this industry. The measures, proposed by the Ministry of Industry, also covered ship repairs. According to a report submitted to the Cabinet, the Ministry of Industry had worked out strategies for the shipbuilding and repair industry with related public and private organizations. The strategies involved the promotion of the shipbuilding and repair industry, amendments to related laws and regulations, and efficient management.
In order to promote and support the shipbuilding and repair industry on an immediate basis, the Marine Department proposed the establishment of a shipbuilding industrial estate within five years [ie, before 2010]. A suitable site was sought for the location of this industrial estate. At the same time, the existing ports would be improved to facilitate marine transport, especially the transportation of goods in coastal areas. More ports in the regional areas of the country would be built to reduce road transport while boosting marine transport. The move would help save energy, which is becoming more and more expensive.
Under long-term measures to be implemented from five to ten years [ie, 2010-2015], a fund for shipbuilding and repair industrial development would be set up. A study would be conducted to find out the demand of manpower in this industry. In a move to produce more personnel in the shipbuilding industry, incentives would be offered to encourage more researchers to work for shipbuilding and repairs in response to the needs of shipyards. An institute would be established to upgrade skills in shipbuilding and repairs to international standards. Related industries, such as raw material and equipment production and iron manufacturing, would be promoted to encourage foreign shipbuilders to undertake joint ventures with Thai entrepreneurs.
Regarding amendments to related laws and regulations, the Government would exempt import tariffs for machinery, raw materials, and equipment used in the shipbuilding and repair industry. Promotional privileges, together with an exemption of corporate tax, would be granted to this industry in all investment promotion zones. Software technology and modern management systems would be adopted to develop the production process in shipyards.
Concerning efficient management, the Government would form a directing committee to supervise and facilitate the shipbuilding and repair industry. The committee would promote cooperation with various countries in several areas, such as technology, expertise, personnel development, and the promotion of research and development in this field. In addition, a database for the shipbuilding and repair industry would be worked out. The database would also include information about related businesses, and the information must be complete and updated. The Cabinet assigned various agencies involved to translate these strategies for helping the shipbuilding industry into action.
At the meeting held by the board of directors of the Board of Investment in early February 2007, a series of new investment promotion incentives were approved that would spur additional growth in targeted sectors. The board approved additional investment privileges to attract shipbuilding and shipyard businesses in both zone two and three, by offering an exemption on the import duty for machinery and an eight year corporate tax exemption, without cap, with the view of promoting Thailand as a regional hub of maritime transportation.
Speaking on this new promotion privilege, Secretary General Satit Chanjavanakul said “Most of shipbuilding and shipyard facilities are located along major rivers in zone one, where expansion is limited since in that area the channel is narrow and shallow. With the BOI’s new promotion support for the operators of shipbuilding and shipyard businesses, Thailand will have higher potential to be a hub of maritime transportation in the region.”
It should be noted that enterprises entitled to the new incentive are shipbuilding operators and shipyard operators for steel ships with a capacity above 500 gross ton, and those for ships with a capacity of lower than 500 gross tons, excluding those handling wood and steel ships.
At present there are over 250 business operators running shipbuilding and repairing dockyards as well as other related industries. Those dockyards are located along major rivers, i.e., Chao Phraya, Tha Chin, Mae Khlong rivers and also along Thai Gulf coast lines as well as Andaman coasts and the Strait of Malacca. In terms of shipbuilding and repairing capability, Thai dockyards can be categorized into three groups: small, medium and large dockyards. They provide services mainly to meet local demands.
Small dockyards have the capability for building and repairing of ships smaller than 500 gross tons. Most of dockyards in this group provide services to wooden fishing trawlers. Medium dockyards, with capability for building and repairing ships between 500–4,000 gross tons, are capable to handle shipbuilding and repairing steel, aluminum or fiberglass ships. Most of these dockyards are located in Bangkok metropolitan areas.
Large dockyards, by present Thai standards, have the capability for building and repairing ships over 4,000 gross tons. This group of dockyards are located in Bangkok, Samut Prakan and Chonburi. They utilize most advance and modern equipment and are able to scale up to operate in other areas other than shipbuilding and repairing since they already have machinery and equipment to facilitate their operations, for instance building steel structures, bridges, drilling platforms, etc.
Historically, the shipbuilding industry in Thailand was as developed and advanced other countries in Asia because of abundance of wood suitable for buiding ships. Both warships and merchant vessels were built long time in Thai history. Most of marine vessels built during those periods were the Chinese junks. Basically shipbuilding was carried out by Chinese supervisors with the support from groups of Thai workers.
During the reign of King Ekatosarot of Ayutthaya period, Western style ships were build for the first time in Thailand. The King requested for assistance from the Netherlands to send shipbuilders and equipment to build Brigs, with two or three masts,on September 1st,1608 Since then the shipbuilding industry started to grow continuously. Until the reign of King Narai, it was documented that western style ships were build in Ayuttaya and in Marid. In De Choisy's journal, it is clearly recorded that the King of Siam gave an order to build Western style vessels and three of them recently made their first sail.
During Ayutthaya period, the shipbuilding industry in Thailand was flourished.Various types of vessels, including western styles ships, Chinese junks, were built for royal naval, using for foreigned trading. There was clear evidence showing that dockyards were constructed to build merchant ships and send over to other foreign countries. During Thonburi period, ships were actively utilzed in warfare. King Taksin ordered that the Chinese junks being built to maneuvered Thai troops along the Chao Phayariver to Ayutthaya and reclaimed the ex-capital city from the Burmese troops.
During the reigns of King Rama II and King Rama III of Rattanakosin period, the trade between Thailand and other and other countries were at their highest point. Most of the Chinese style junks built in Thailand were used. In 1818, Thai workers had capability to build 6-8 large ships of 1,000 tonnages capacity per year. During the reign of King Rama IV, the new era of steam ships started, wooden ships were built while period were the royal court's officers from Boonnak family. They also comissioned foreign advisor for the purpose.
Shipyards during Early Rattanakosin Period include the Naval dockyard, located opposit the Rajavoradit pier on the south side of Wat Rakhagkositaram temple, initiated by King Rama V on January 5th, 1890 At present, the area is situated by the Royal Thai Naval Dockyard. Officer's dockyards, such as a dockyard at the premises of Somdej Phraya Maha Suriyawong, Private dockyards, such as the Bangkok Dock, or the present Bangkok Dock public Company, the public enterprise under the Royal Thai Navy.
The first steam ship was built in 1765, in the reign of King Rama IV. The ship was 75 feet in length, 30 feet width and having 15 HP steam engine. The first warship was built in 1898 by the Royal Thai Naval Dockyard. It had wooden hull with steel structure, with 113 feet in length and 16 feet width, 200 tonnages of displacement capability, with 171 HP engine, and 7 knots speed.The first set of warship that consisted of 4 warships was built in 1927 is Coastal Motor Torpedo Boat made from wood (length: 17 m.) 40 knot speed. The first steel warship was built at the Royal Thai Naval Dockyard in 1956, it was a small torpedo boat, with 140 tonnages of displacement capacity, 42.4 meters in length, 18 knots speed, and 360 miles operating capability.
Thailand attracts yacht enthusiasts and builders with its expansive blue waters, substantial manufacturing capability and reliable government support. Perhaps the biggest competitive advantage, however, is the fact that high quality comes at low cost. Located at the heart of Southeast Asia, Thailand is an excellent base for yacht builders, marine service businesses, and tourists seeking wonderful sailing in the region. In addition to a stout yacht-building infrastructure, the country has 1,000 miles of spectacularly beautiful coastline on the Gulf of Thailand and the Andaman Sea, umpteen fanciful islands and coral reefs ideal for pleasure craft, and a typhoon-free tropical climate. In short, it can be a profitable paradise for yacht entrepreneurs.
From a production standpoint, the labor cost savings in Thailand are substantial, even as top quality is emphasized. This is a tremendous attraction for builders, as labor makes up 40% of the expenditure in manufacturing a yacht, excluding the engine. Industry estimates put Thailand’s yacht labor costs at half of those in the United States and Australia.
The yacht market in Thailand, supported mostly by expatriates and international tourists, relies heavily on imported yachts. At least 70% of all larger yachts – sailing and power – sold in Thailand are foreign-made. In contrast, 60% of smaller speed boats sold in Thailand are locally produced. As of 2010, yachts and sports vessels comprised 8% of all registered seaborne vessels in the country. Thailand’s exports of yachts soared from 15.61 million baht in 2004 to 137.9 million baht in 2009, based on Ministry of Commerce statistics. Strong support from various government agencies is vital to the industry’s sustainable development.
The Industrial Promotion Department and the Thai Shipbuilding Association are looking to take business one step further by drawing foreign shipbuilders to Thailand. Thailand has potential to host foreign shipyards in places from Samut Sakhon to Phuket, says Banchong Khunajit, who's on the committee of the Thai Shipbuilding Association. If that happens, there could be up to 5,000 yachts sailing to Thailand every year. Host to the King's Cup Regatta and home to a state-of-the-art marina, Phuket draws some 1,300 yachts every year, most of them cabin cruisers and mega-yachts measuring from 30 to 100 feet.
Unithai Shipyard and Engineering is the largest shipyard in Thailand. The 20-year-old Unithai Shipyard covers 688,000 square metres with two floating docks and lifting capacity of 30,000 tonnes. The facility can service vessels up to 292.2 metres long with afloat repair service. Unithai Shipyar and Engineering is located within the country's main international deep sea port of Laem Chabang, which is at the heart of Thailand's chemical and oil tanker, container, dry bulk, car and offshore trade. In addition, at within 2 days sailing from Singapore, minimal deviation is required for vessels to reach the yard.
The yard is developed on 688,000m2 of prime water frontage adjacent to the main port area accessible by protected deep water, rail link, and an excellent road system and only a short distance from the port and anchorage facilities of Ko Sichang, Map Ta Phut and Bangkok. Core activities of this division of the Unithai Group are a complete range of ship repair, modification, conversion, shipbuilding, and offshore oil and gas fabrication work. Unithai Shipbuilding business is dedicated to marketing and executing for small to medium size of vessel up to around 120 meters.
As a member of the Unithai Group of Companies, Unithai Shipyard and Engineering benefits from the extensive capability and expertise throughout the Asia Pacific region of the IMC Pan Asia Alliance Group, a regional organisation with primary business interests in shipping, distribution, logistics, engineering and infrastructure development.
The Unithai Group represents the Thailand arm of IMC Group, a leading player in the provision of integrated solutions to support the industrialization of Asia. IMC Group forms the industrial arm of the diversified IMC Group of companies. Its business interests cover ship-owning and operating, logistics and warehousing, transportation of dry and wet bulk goods, shipyards and offshore engineering.
Unithai has proven the ability to provide turnkey shipbuilding projects such as AHTS, offshore support vessel, Container vessel and Navy vessel, tugs and barges. Current capacity is up to four ships under construction concurrently or a proportionately larger number of smaller vessels. Since the first ship was drydocked for repair in September 1993, the size and complexity of repair contracts undertaken have grown to the extent that Unithai can provide a complete range of ship repair services for commercial and military vessels up to suezmax and minicape.
Since 2008, Unithai Shipyard has serviced more than 20 US Navy vessels. Repair works range from routine general maintenance, tank cleaning, and pipe repairs to sophisticated orders such as an engine overhauls or other mechanical and electrical work. In April 2010, a 40,000-ton vessel operated by the US Navy, left Unithai’s shipyard, the largest of its kind in Thailand, yesterday after going through a two-week repair job. It was the fourth time the USNS Tippecanoe T-AO 199 has arrived in Thailand for such services.
On 26 June 2011 Unithai Shipyard and Engineering was awarded a contract from the Royal Thai Navy to make repairs to the frigate HTMS Naresuan. The job, comprises major steel repair and coating of the hull, plus repairs to the tail shaft, propeller blades and rudder. Work was scheduled to be completed within 120 days. The contract was signed at the Navy base in Samut Prakhan on June 23 by Vice Admiral Attaphong Na Nakorn, Director of the Naval Dock Yard, and Khun Arthit Pratoomsuvarn, Managing Director of Unithai Group. “This contract for such a significant project further enhances the profile of Unithai Shipyard and Engineering,” Khun Arthit said. “It shows that our operation has been recognised for its high-quality standards and capabilities.” The HTMS Naresuan has the highest capacity of the Navy’s frigate fleet, capable of 32 high-speed knots with its 44,250-horsepower diesel engines. The vessel is 120.5 meters in length and 13.7 metres wide.
On Tuesday, August 19, 2008 Unithai Shipyard and Engineering Limited and a joint venture company, Schelde Naval Shipbuilding held the delivery ceremony of H.T.M.S. Pharuehatsabodi, a 66-meter multi-purpose vessel for hydrographic survey, mine countermeasures and training activities. The event was presided by the Commander in Chief of the Royal Thai Navy, Admiral Satirapan Keyanon at the Laem Tien Terminal, Sattahip Naval Base in Chonburi Province. Unithai Shipyard and Schelde were awarded the contract from Royal Thai Navy on December 22, 2005 and formally laid the keel to begin construction on August 25, 2006
Marsun Co., Ltd.,
Marsun Co., Ltd., an enterprise that keeps building on its many successes. From its modest beginnings 31 years ago as strictly a fiberglass boat maker, the Thai-owned company has developed into a full-service shipyard with expertise in steel, aluminum and composite materials. Located near the mouth of the Chao Phraya River, in Samutprakarn Province outside of Bangkok, the company builds and repairs a range of vessels. It has delivered more than 230 patrol gunboats, fast patrol boats, fast assault boats, oil-spill recovery vessels, motor yachts, landing craft and passenger ferries, to both government and private clients. In recent years, sales have been mostly to the domestic market. The main client is the government sector, with the Thai Navy accounting for about 50% of contracts. The company has also delivered boats to the Port Authority and the Customs, Police, Fisheries and Forestry departments. It also does a brisk business with the private sector in Thailand, especially for crew and utility vessels that serve the offshore oil and gas exploration industry, and has many overseas customers as well. Since 2009, the company’s sales value has soared by approximately 30%. “We recently doubled our shipyard size, giving us more capacity to manufacture more vessels,” said Mr. Patrawin Chongvisal, a director and marine engineer at Marsun. He added that annual revenue at the company, which has 260 permanent staff, ranges between 800 million and 900 million baht. Growth continues apace at Marsun, which plans to seize the opportunity and set up another shipyard, this time in Phuket, southern Thailand. The new facility would focus on the repairing and rebuilding of pleasure yachts, while also serving other types of vessels. A world-class island resort, Phuket draws a lot of tourists and yacht enthusiasts. “Our field studies show that there are over 800 permanently berthed yachts at Phuket’s marinas and a couple hundred more in-and-out tourist yachts. We see demand there for a qualified shipyard,” Patrawin said. Positioned as a high-technology and quality-oriented company, Marsun sees several advantages that make it one of the best shipyards in the region. Capability and price are among them. The company’s engineering team is very strong. But what also differentiates Marsun from some competitors is that the engineering as well as the production is done in-house. Since it has a permanent engineering team on-site, Marsun does not rely on outside subcontractors or engineering consultants, unlike some shipbuilders. “In the shipbuilding industry, the main competencies of a company should be its engineering and production teams. As we have both in- house, this gives us an edge because we can control quality better and respond to customers’ requirements more quickly,” Patrawin said. “With permanent engineers on hand, we can also plan the direction of the company more effectively,” he added. The incentives offered by the Thailand Board of Investment, including tax breaks and exemption on material and machinery duties, are also deemed very important. In addition, the company has a bonded warehouse from the Customs Department. The resulting investment and operational savings enables the company to price products and services more competitively. “This is especially important right now, as we aim to go global in promoting our engineering strength, high production capability and competitive pricing,” Patrawin said. Marsun meets customers’ requirements by using steel and aluminum approved by the industry’s certifying bodies. Most materials, as well as components such as engines and gearboxes, are imported. This is as much about volume as quality. As Thailand is not yet a huge center in the global shipbuilding industry, the output of local mills is not substantial. “We have to import more than 60% of raw materials,” Patrawin said. “However, I believe that as the shipbuilding industry in Thailand grows and demand increases in coming years, local material manufacturers will expand accordingly.” Already certified to ISO 9001:2008 for quality management, the company anticipates also gaining ISO 14000 for good environmental practices and ISO 18000 for safety within this year. R&D is an important factor in Marsun’s success. As the company focuses not on bulk carriers but instead on technology-oriented craft, it is vital for Marsun’s 30 engineers to constantly come up with innovations that add value for customers. Among the trends are less power consumption and enhanced boat efficiency. “Every vessel is developed from a proven platform and then we make it better,” Patrawin said. “Our customers value the good things. They want quality and innovation. Sometimes we will add a feature to a model that a customer was not specific about, and later he will say that is just what he was looking for.” When putting the Thai shipbuilding market in perspective, Patrawin split it into two segments: governmental and commercial. He said government expenditure fluctuates depending on budgets but right now that market shows an uptick. In the commercial market, Marsun competes with local builders as well as makers in Singapore and Australia. “Even though our overseas competitors might have the same quality level as us, our engineering and workmanship capability is more competitive. That is in addition to our prices being less expensive because Thai labor wages are lower,” the director explained. Looking at yacht building specifically, he encouraged more government support to spur growth in that sector. “The tax on imported yachts is very low, so it is hard for locally produced yachts to compete in the market,” Patrawin noted. “Boosting the local yacht industry would create more jobs for Thai people and build up related industries such as steel, machinery and services. Everything would grow.”|
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