SEPTEMBER 23, 2016 — Carnival Corporation & plc (NYSE/LSE: CCL; NYSE: CUK) reports that its cruise joint venture in China has signed a non-binding memorandum of agreement (MOA) to order the industry’s
The Beijing office of China’s Export Import Bank and the New York Office of Taiwan’s First Commercial Bank will each provide $37.5 million loan facilities to support construction of the two 180,000 bulk carriers which are being built by the Qingdao Beihai Shipbuilding Heavy Industry subsidiary of state-owned China Shipbuilding Industry Corporation (CSIC).
Among those present for the signing was former U.S. Secretary of Labor Elaine L. Chao, whose public service career has also included being Chairman of the Federal Maritime Commission and Deputy U.S. Maritime Administrator. Her husband is Senate Majority Leader Mitch McConnell.
CMP is an engine-manufacturing division of the Chinese State Shipbuilding Corporation (CSSC), one of the largest Chinese shipbuilders.
The new agreement, signed at a ceremony last week in Anqing, China, marks the renewal and continuation of a cooperation that first started in the 1980s.
“The extension of the four-stroke license agreement between CMP and MAN Diesel & Turbo is a tribute to the very first license we bonded 35 years ago,” said CMP Chairman Mr. Zhang Haisen. “Furthermore, the comprehensive cooperation scope refers not only to four-stroke diesel engines, but also to two-stroke low speed engines, CPP propellers, turbochargers, and SCR systems. CSSC values MAN Diesel & Turbo as its premium partner, and sincerely expects to continue this important business partnership to another 35-year milestone.”
“We have enjoyed a long, close cooperation with CSSC/CMP that stretches all the way back to 1980, and over the years CMP has produced a broad range of MAN four-stroke engines, but also small two-stroke engines,” said Klaus Engberg – Senior Vice President and Head of Two-Stroke Licensing, MAN Diesel & Turbo. “Especially over the last decade, our two companies have intensified their technical cooperation, making CMP today one of MAN Diesel & Turbo’s major licensees globally for such engines, and the largest producer of MAN four-stroke engines in China.”
Ulrich Vögtle – Vice President and Head of Large Bore Four-Stroke Licensing – said: “We view our relationship with CSSC as pivotal to our success in giving Chinese customers access to our technology. Accordingly, we are very happy and proud today to be able to officially announce the continuation of our excellent business relationship for the next decade.”
To date, CMP has delivered 5,000 units of MAN four-stroke diesel engines, equivalent to 4,700,000 kW. CMP also holds a license agreement for two-stroke MAN B&W engines, which it too renewed for a decade at a ceremony in Beijing earlier this year.
Headquartered in Beijing, CMP parent CSSC handles shipbuilding activities in the east and south of China and consists of various shipyards, equipment manufacturers, research institutes and shipbuilding-related companies. Some of the best-known shipbuilders in China, such as Jiangnan Shipyard and Hudong-Zhonghua Shipbuilding, are currently owned by CSSC.
Zhenjiang Marine Diesel (ZJMD), CMP’s predecessor, was founded in 1976 and signed a 15-year medium-speed licensing agreement with MAN Diesel & Turbo in May 1980. This was subsequently extended in 1995 and 2005.
Yesterday we reported that Norwegian Cruise line is to customize its second Breakway Plus newbuild for the Chinese market.
Today’s news is that Carnival Corporation & plc (NYSE/LSE: CCL; NYSE: CUK) is to deploy two additional cruise brands in China in 2017.
Carnival Cruise Line and AIDA Cruises will join Costa Cruises and Princess Cruises in the Chinese market, making Carnival Corporation the first company to operate four brands in China – which, it says, “is expected to eventually become the world’s largest cruise market based on surging demand for cruise vacations by Chinese travelers.”
The move means that four of Carnival’s ten brands will have at least one homeported cruise ship in China. The plan to deploy two additional ships – one new ship each for both its Carnival and AIDA brands – and operate four total brands in China in 2017 is in line with Carnival Corporation’s long-term, multi-brand strategy to provide Chinese travelers with a variety of vacation options and experiences to meet growing demand across all segments of the Chinese market.
“We are excited to introduce our Carnival Cruise Line and AIDA Cruises brands to our fleet in China, giving us a total of four global cruise brands in the market and a unique opportunity to provide a diverse lineup of brands and cruise offerings to Chinese guests who are looking for a great vacation experience,” said Carnival CEO Arnold Donald, who was in Shanghai to announce the news at the 10th Annual China Cruise Shipping and International Cruise Expo (CCS10). “As we execute our multi-brand growth strategy in China, we are emphasizing choice and variety in our offerings to match the different tastes and preferences of Chinese travelers.”
“As more and more Chinese are discovering why cruising is the best vacation experience, they are having a great time on our Costa and Princess brands, and we look forward to even more Chinese travelers enjoying vacations on our AIDA and Carnival brands,” said Mr. Donald. “This is an exciting time in China for the cruise industry, and as the world’s largest cruise company and the first global cruise operator in China, we are more committed than ever to helping China become one of the world’s most popular regions for cruise vacations.”
Adding the two new brands follows a July announcement by Carnival Corporation that Costa Cruises and Princess Cruises will each put a new ship into its China fleet in 2016, making Carnival Corporation the first global cruise company with six total ships based in China. This all adds up to a 58 percent increase in total capacity in China in 2016, including three year-round ships and three seasonal ships in the market. Together, the Costa and Princess brands will potentially offer about four million passenger cruise days in 2016.
As previously reported, Carnival Corporation is also exploring potential joint ventures in China with China State Shipbuilding Corporation (CSSC) and China Merchants Group (CMG) designed to accelerate the growth of the overall cruise industry in China, including the possibility of launching a world-class Chinese domestic cruise brand, building new cruise ships in China, and supporting port and infrastructure development.
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