TTS Group signs breakthrough marine package equipment order in China

TTS Group ASA has got a flying start for its newly established 50/50 Chinese joint venture company, TTS-SCM Marine and Offshore Machinery Co., Ltd. The company has today signed agreements with Shanghai Shipyard Co. Ltd, ensuring delivery of various TTS deck equipment for six ships. Total order value is NOK 270 million.

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The contract includes mainly heavy lift cranes to the ongoing fleet extension program of China Ocean Shipping (Group) Company (COSCO). In addition TTS will deliver hatch covers and winches to COSCO trough another 50/50 joint venture company, TTS Hua Hai. The delivery of the first ship will be in May 2016.

- The order represents a further belief in the strategic model TTS has chosen for the important Chinese market, says Björn Anderson, CEO of TTS Group ASA. - Localization of critical business projects in combination with key account ship type packages ensures the successful roll-out plan for TTS growth strategy, Andersson ads.

Enhancing heavy lift market

For several years already TTS have had a successful joint venture experience in China, and is an important player in the Chinese market coming to e.g. hatch covers, winches and some types of cranes. By establishing TTS-SCM Marine and Offshore Machinery Co, TTS Group has taken another step forward with specific regard to the market for heavy lift cranes.

The company shall benefit from what TTS already has achieved. Based on well-proven TTS technology and experience, as well as good relations, the new company is well prepared to deliver heavy lift cranes, constituting the majority part of the new contracts.

TTS and COSCO are already well known to each other, through several deliveries.  - We are proud that such an important customer as China’s COSCO Group has decided to choose TTS again. It clearly shows that our focus on customer satisfaction is the key to success in the long-term strategy, Anderson says.

Multipurpose vessels

The TTS deck equipment delivery are for six 28.000 DWT Multipurpose Heavy Lift Vessels. COSCO already operates eight identically constructed vessels. Each ship is equipped with the proven TTS NMF type DK II, two with SWL 350t and one with 100t lifting capacity.

The order is placed by Shanghai Shipyard Co. Ltd., part of the China State Shipbuilding Corporation (CSSC).

- This contract is a milestone for our new company, as well for the TTS Group, says CEO Björn Anderson. - We have firmly believed that the new company will improve and gain a competitive position in the market. Now we have the first proof for choosing a proper strategy, he says.

- As initial order for the new Joint Venture it is a very important project for TTS, SCM and CSSC, says Geir Storaas, Chairman of TTS SCM. - The new Joint Venture allows us to combine high end technology with a most competitive position in the heavy lift market, he ads.

Based on experience

Formally the new joint venture company is established by TTS subsidiary, TTS NMF, based in Hamburg, Germany in partnership with CSSC-controlled South China Marine Machinery. TTS NMF has been the leading global provider of heavy lift cranes for decades and in order to maintain this position, TTS now ramps up its heavy lift crane operations in the Middle Kingdom.
The company will target a market where the shipbuilding has predominantly moved to China. The company will focus on heavy lift cranes for general cargo and multipurpose vessels as well as on the market for various offshore workboats and supply vessels. 
In addition to reducing costs and securing market access, the establishment of the new company is also a response to stronger demands from Chinese authorities that equipment for vessels built by Chinese yards ought to be made in China.
- In many ways, the Chinese are now creating the same kind of maritime infrastructure as Japan did in the 1970s, and the TTS Group intends to be a part of this development. While other internationals increasingly turn away from partnerships with Chinese players and start their own businesses on Chinese soil from scratch, joint ventures will continue to be TTS’ preferred avenue for getting a stake in the Chinese market for cargo handling solutions. We believe that a joint development on equal footing will be the best for both parties and also find it natural to support CSSC’s strategy of localizing the entire value chain close to their main market, says Björn Andersson.

Although the majority of the ship-owners in the general cargo/multipurpose vessel segment are still European, they will face strong competition from Chinese players in the future. China Ocean Shipping Company (COSCO) has expressed a clear ambition to become the world’s largest general cargo/multipurpose vessel fleet operator.