Over time the capacity of the fabrication market and ship building in Australia has significantly diminished putting greater stress on existing manufacturers to fill orders or loosing build programs to foreign yards.( Police boat replacements in Singapore, Supply of lower cost ferries from Asian yards)
A list of events is as follows:
NSCV Regulation impact commercial supply
The NSCV rule set changes exacerbated the total vessel supply chain in that the tougher rule set meant that previously acceptable domestic foreign commercial standards were no longer approved, thus requiring more commercial high speed craft to be secured as new builds in the market place. Hence foreign vessel imports that made up some of the shortfall could no longer be accessed unless they met recognized Classed survey standards. (eg. eliminated domestic second hand craft from NZ)
More operators have had to turn to new builds and this will continue to put pressure on capacity in the reduced manufacturing base.
Other Significant Market Impacts
The defence/border force sector is in the process of a long run up in fleet capacity where there will be significant light craft replacement programs (tactical response, army light craft, support craft replacement). These demands will be a challenge to fullfill without the home grown manufacturing base unless of course government chooses (vicariously), to contract work to foreign builders as has been experienced in the last decade for major naval aquisitions. (eg. Aurora Australis, Helicopter support, Submarine Support, Tankers). The contracting arrangements with major support craft has seen an influx of foreign built naval support ships that whilst may have been a clear short term benefit for budget improvement, has led to the demise of critical ongoing manufacturing capability and knowledge. It is not surprising then that the effort to rebuild Australian skills is coming from such a low base.
The tourism market has been rationalized into the four big corporate aluminium fleet owners. Between them they would hold more than 95% of the aluminium ferry fleet in Australia. They are severely disrupting the second hand vessel market as they hold their assets. Hence the market will need to turn to new build to fill requirements. When factoring the remote project management, build quality and TLS, home grown manufacturing will always present as a better value for money proposition.
The virus impact on tourism businesses has commenced particularly where second wave effects are blocking domestic transfers internal to a country.
The issue There is a demand that will not be met in the future to support Australian aluminium manufacturing programs due to the reduction in manufacturing capacity in country. This is a trend occurring in the Australian aluminium manufacturing sector that appears to have to date, gone under the radar for the broader market.
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