Genting Hong Kong, Germany's Lloyd Werft Group sign 3.5-bln-euro ship building contract

A ship building contract worth 3.5 billion euros (around 3.9 billion U.S. dollars) between Hong Kong-based Genting Hong Kong and Germany's Lloyd Werft Group was signed here Tuesday, bringing with it the prospect of revitalizing local industry and creating thousand more jobs in Germany's shipyard business.

Bremerhaven-headquartered Lloyd Werft shipyard is more than 150 years old. Earlier this year, Genting Hong Kong, a pioneer in the Asian cruise industry headquartered in Hong Kong, China completed its acquisition of Lloyd Werft and three other German shipyards and combined them to form the Lloyd Werft Group.

Rudiger Pallentin, managing director of Lloyd Werft Group, said the German shipbuilding sector had undergone a difficult time due to increased labor costs and international competition over the past ten to 20 years. It meant shifting their production focus from cargo vessels mainly to special purpose ships, including cruise ships.

"China has gained an increasing competitive edge and a number of big ship components are produced in China and thus Germany becomes more of an assembling place." said Pallentin.

China has become an integral part in Germany's cruise industry, not only in high-quality production, but also in financing and operation, he said.

"The Hong Kong company has very experienced personnel and professional know-how. Such a cooperation will be a great thing," said Pallentin, referring to the cooperation with Genting Hong Kong.

In an interview with Xinhua, Tan Sri Lim Kok Thay, the chairman of Genting Hong Kong, said, "With our technology and expertise, I am quite confident that the bought yards will be able to transform themselves to building more large cruise ships."

The greatest challenge, according to Lim, is that the cruise building technology is now only available in three other yards respectively in Germany, France and Italy. "We are striving to be the fourth," said Lim.

Lim said in the European cruise market and also in many other areas, the supply of cruise ships has lagged far behind the demand.

When asked to offer tips for Chinese enterprises willing to expand business abroad, Lim told Xinhua that it was essential for a company to understand the market it's targeting from the consumer and the supplier standpoint.

The acquiring companies should understand the technological capabilities in the targeted market, Lim said. "Moreover, adequate investments should be made to conduct research on what can be achieved," he added. Endit