CHINA, which is likely to become the world�s largest shiprepairer as well as shipbuilder, continues to suffer from various misconceptions on the international stage.

�The most common is that repair and build quality is poor,� Hugh Williams, chief executive officer of Graig Shipping, said yesterday. �The second is that ships will be delivered late; the third is that complex technical work on equipment is not possible; and the fourth � and most damning � is that in the end, with additional supervision costs, ships repaired in China will cost as much as a job done in Korea.

�These misconceptions are reasons for avoiding China when considering a new project, and I am sure that there are owners who have had all these experiences.�

But he insisted: �Our experience is absolutely the opposite to the misconceptions I have outlined. We got all our ships on time, on spec, and, best of all, we made significant cost savings on the ships compared with building them in other Asian countries.�

Mr Williams told delegates China had about 200 repair yards. Capacity was about one-fifth of the total global capacity, and virtually all the yards had experience of working with non-Chinese owners. About 40 had performed sophisticated work, including conversions and outfitting.

�The best thing must be that labour and steel costs are low, which for a straightforward repair or conversion should mean significant cost savings when compared to other Far Eastern yards,� he said.

�Then there is the flexibility of the yards. If you have a one-off project, you can find a yard here to tackle it. Blasting and coating standards are high while prices are low, and this is a major difference from Far Eastern yards,� said Mr Williams.

�There is capacity, making for short delivery times. There are few labour disputes. The yards and associated equipment firms and subcontractors are technically competent, innovative, entrepreneurial and open and pleasant to work with. They want our custom and our technical input,� he said.

Mr Williams pinpointed patchy quality control as the most obvious weakness, and said some yards had yet to learn about focusing on customer needs. There was also poor support for electronics, telecoms, satcoms and radar.

In addition, some yards were slow to react when additional repair needs became obvious, he said. Imported spare parts could cause customs difficulties, and the management process was often convoluted, with a lack of clear reporting lines. Lack of financing expertise, and problems with the Chinese language were also potential barriers.

The road to success, he told delegates, was through Guanxi, the process of building a relationship with yards and people. �It doesn�t mean passing little red envelopes around. You cannot treat these people like a fitter and pass them a fiver to have some little job done. You have to learn to work with them, and build trust,� he said.

Owners should also focus on the best yards, match the yard carefully to requirements, make a precise specification, put an experienced and motivated supervision team in place, ensure all spare parts are customs-cleared before the vessel arrives, prepare the ship properly before arrival, get the ship�s crew to co-operate with the yard workers, pay promptly, and show patience and humour.

�Confrontational approaches and one-off �slam-dunk� deals don�t work. A collaborative approach does. You need a good supervision team on the spot, and they must be resilient individuals with Chinese language skills in addition to good technical knowledge. And of course, it helps if you work closely with a major classification society that has experience of China,� he said.

Looking ahead, Mr Williams felt that shiprepair in China would get more sophisticated as owners accepted China was a comfortable place to carry out do steelwork, blasting and coating.

�As groups like ours work with the yards, we are seeing an increasing number of inquiries as confidence levels increase � not only for run-of-the-mill repairs and periodic drydockings, but for tricky and complex engine and boiler repairs and FPSO conversion projects,� he said.

�Shiprepair in China will become more expensive as costs across the country rise. But it will stay very competitive for some time to come,� Mr Williams predicted.

�We shall see more demand for on-the-spot supervision services, as owners overcome their misconceptions and realise that the only barrier to repairing and converting in China is their own lack of knowledge of the situation,� he added.