SEO Version
21
Annual Report 2013
We have received recognition from the Chinese
government for our pursuit for excellence. For
example, our COSCO Nantong shipyard was
presented with the first prize in China’s prestigious
State Science and Technology Award previously in
recognition of its key design and manufacturing
technologies for an ultra deep-water high stability
drilling and storage unit.
The Group has taken all feasible measures to support
our ongoing effort to level up our business from the
capacity and price-oriented paradigm to the higher
end of the market.
7. WHAT OBSERVATIONS DO YOU HAVE GOING INTO
2014 AND BEYOND?
The International Monetary Fund (IMF) in its latest
update on its World Economic Outlook in January
2014 projected the world economy to grow by
3.7% in 2014 and 3.9% in 2015. However, it flagged
concerns about the global economy and IMF warned
of downside risks such as the normalisation of
monetary policy in the advanced economies and
potential volatile capital movements.
Even before the latest IMF prognosis, analysts had
already expressed concerns of threats to recovery,
including the Eurozone’s financial health, US fiscal
policies, the tapering of quantitative easing, as
well as the still uncertain depth of recovery of the
Japanese, Eurozone and emerging economies. Also
of concern to us is the strength of the Chinese Yuan
and increasing cost pressures.
Over at the Eurozone, whatever growth has been
reported seems to be uneven across member
countries, with continuing concerns about the
banking system there. The handling of the tapering
of bond purchases by the US Federal Reserve could
affect capital flow and interest rates that could
negatively impact business growth.
It is important for the various governments to ensure
that reforms, fiscal policies and economic measures
work effectively to spur growth.
With this economic backdrop, we remain concerned
about the speed of overall global recovery as the
shipping industry badly needs a quick return to
better trading conditions.
Another observation is that we cannot foresee when
newbuild prices can recover to a sustainable level.
We also cannot expect new contract volumes to
return to the pre-2008 level in the short-term, and
therefore the market could continue to be price-
sensitive especially in the lower market segment.
The International Energy Outlook 2013 issued by the
United States’ Energy Information Administration
(EIA) had projected that world energy consumption
would grow by 56% between 2010 and 2040, with
fossil fuels meeting up to 80% of world energy use
over the three decades.
We view the projected continued rise in energy
consumption as an important boost for the offshore
marine market fundamentals, although there are still
a lot of economic uncertainties going forward.
We are watching the developments very closely
and will continue to be highly responsive in our
marketing efforts. We have a proven professional
management team and the structure, system and
capability to bring us forward. Our supportive and
hard-working technical and process workforce are
also strongly behind us to maximise our advantages
in the competitive market place.
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