CSBC Corp, Taiwan (台灣國際造船) yesterday inked an agreement to form a joint venture with marine engineering company GeoSea NV — a subsidiary of Dredging, Environmental and Marine Engineering NV (DEME) — to tap into the market for offshore wind farms.
The new venture, CSBC-DEME Wind Engineering Co Ltd (台船環海風電工程公司), would oversee construction of offshore wind farms and related technology transfers to local operators.
CSBC, the nation’s only listed shipbuilder, said it would hold a greater than 50 percent stake in the venture.
Foreign and local businesses are competing for an estimated NT$700 billion (US$23.34 billion) in offshore wind farm projects that are expected to receive approval from the Ministry of Economic Affairs after the first quarter of next year, with marine engineering making up 15 percent to 30 percent of the windfall, CSBC chairman Cheng Wen-lon (鄭文隆) said at a news conference in Taipei.
The upkeep and maintenance of offshore wind farms could bring sales opportunities of NT$23 billion each year, he added.
“We have been preparing to meet the government’s local content requirements for the offshore wind farm projects,” Cheng said, adding that CSBC has been collaborating with other international firms specializing in supporting structures.
It plans to launch its own marine engineering fleet, including a turbine installation vessel that is capable of installing turbines rated at between 8 megawatts and 9.5 megawatts, as well as two 140m barges, Cheng said, adding that other specialty construction ships would be acquired through means such as leasing.
GeoSea is a leading specialist in offshore wind farms, and CSBC is hoping to learn and facilitate technology transfers from the Belgium-headquartered firm, Cheng said.
Offshore wind farms are a vital part of CSBC’s efforts to cut its 99 percent reliance on shipbuilding, as it has been battered by low demand for new vessels due to a persistent downturn in the global cargo shipping sector, he said.
However, the company is still expected to end next year in the red, as its new offshore wind farm business will not begin to make significant earnings contributions until 2019 or 2020, JihSun Securities Investment Consulting (日盛投顧) said in a report last month.
CSBC’s losses are expected to narrow next year, JihSun analysts said, adding that constructing wind farms would come with a significant learning curve.