deme │ lessons learned in taiwan2019/02/02 · lessons learned in taiwan tokyo 24/01/2019 2 deme...

Creating land for the future

DEME │ Building local supply chains:

Lessons learned in Taiwan

Tokyo

24/01/2019

DEME │ CREATING LAND FOR THE FUTURE2

Agenda

Towards efficient,

employment-rich

use of resources

KEY TAKEAWAYS

Challenges and

opportunities

BUILDING LOCAL

SUPPLY CHAINS DEME and its

presence in Taiwan

BACKGROUND

Background


DEME | About us

► Global dredging and marine solutions provider,

headquartered in Antwerp, Belgium

► 150 years of experience in our core business

► 4,500 employees and approx.

EUR 2.4bn annual revenue

► Active in 92 countries

► More than 4,000 successfully completed

projects over the years

► Globally present, thinking locally:

partnership focus

► Pioneer in offshore wind installation

and EPCI projects (since 2001)


DEME | Our activities

Fluvial and

marine

aggregates

Marine

and offshore

solutions

Environmental

solutions

Dredging

and land

reclamation

Marine

infrastructure

solutions

Concessions

and project

finance

Solutions

offered by

the DEME

Group in

Europe

Solutions

offered by

the DEME

Group in Asia


DEME | Our presence in Taiwan

Marine

and offshore

solutions

Dredging

and land

reclamation

► Dredging International Taiwan | 比利時商國際衛浚有限公司executing dredging and reclamation projects in Taiwan since 1995

► Strong partnerships with local contractors and consultants

► Strongest track record among Western marine contractors

Currently executing the Third LNG Terminal Construction Project

for the account of CPC Corporation Taiwan in JV

► CSBC-DEME Wind Engineering Co Ltd | 台船環海風電工程有限公司JV with CSBC Corporation, Taiwan’s largest shipyard with facilities in

Kaohsiung and Keelung

► Local company leveraging DEME’s expertise to offer local-content

compliant OWF EPCI solutions, including DEME and CSBC equipment

► Bridging local content with international standards

Building local supply chains


Competition

Widening supply chains, supporting

new entrants

Identifying and removing entry barriers

Sharing best practices and

lessons learned

Facilitating safety and

sustainability management

Improving local

outreach

Competitive procurement

to increase participation

Local supply chains | General principles

► “You can have it cheap or have it local?”

Competitive and

effective local

procurement

Widening local

supply chains

Spreading

best practice


Local supply chains | Situation in Taiwan

► Taiwan has no offshore industry and limited marine engineering plant and capability (weather windows,…)

► The Taiwan Government counts on maximum local content in exchange for more generous ‘allocation’ FITs

and relaxes this requirement for FITs arrived at in a competitive auction process.

► Private sector initiative as driver of the process,

supported by Industrial Development Bureau, Bureau of Energy and ITRI (~METI / NEDO)

Key challenges

► Limited private investment capability in key equipment (fabrication lines, floating equipment,…)

► Relative scarcity of skilled local key staff and crew

► Investment framework uncertainty + investment lifecycle uncertainty

► Classical state-driven development strategy (cf. development of Taiwanese key industries),

but without state playing a leading/pioneering role in investment programmes

► Pricing disadvantage when quoting to offshore wind farm developers


Local supply chains | Short- and long-term bottlenecks

Short-term

bottlenecks

Scarce skilled personnel Scarcity of skilled personnel.

Taiwanese context Unique regulations, language barrier, local customs,..

Investment uncertaintyInvestment decisions in local capacity led by developer

investment appetites, with unclear government way ahead.

Infrastructural shortages Port facilities, fabrication yards, rock supply,...

Local equipment shortages Main and auxiliary vessels.

Long-term

bottlenecks

Future OWF development No clarity yet for developments post-2025.

Policy change risk Evidenced by some developers’ failure to reach PPA.

Future sector developmentUnclear environment for recouping investments ->

Long depreciation schedules, high costs -> spiral


Local supply chains | Translating industrial strategy

► A leadership role for CDWE?

Under the impulse of the IDB, the Marine Team and Wind Team have been set up by CSBC and China Steel

respectively.

• Bringing together local actors

Bringing together local contractors, suppliers and authorities helps streamline offerings and offers synergies, with

different parties focusing on different service offerings.

Marine (M) TeamMarine contracting Marine engineering plant and (sub-)contracts

Marine support Auxiliary vessels and project support

Wind (W) Team WTG supply chain WTG components, assembly,…


Local supply chains | Structuring local participation

► Structuring local construction participation

CableFDN OSS AUX

► Structuring local fabrication participation

WTG

• Specialist main equipment

(MIV, floating cranes,…)

supplied by DEME or from

overseas suppliers

• Turbine Installation Vessels

may become available locally

• Barges sourced in Taiwan

(CSBC, TIPM,…)

• CLV vessel

investment

announced

locally

• Barges, tugs,

CTV, SOV, survey

launches to be

sourced locally

• Cabotage law

FDN• Large investments in primary and

secondary steel fabrication in

Taiwan by number of players

• Less clarity (yet) on extent and

scope of Taiwanese involvement

• Taiwanese-international

partnerships exist that primarily

market international goods at this

stage

WTG

OSS

Cable


Local supply chains | Structuring local participation

► Our construction phase ecosystem

CableFDN OSS AUXWTG ServicesSecondary

steel

Consultan

cy

Vessels

Key takeaways: towards

efficient, employment-rich use of resources


Key takeaways | The Taiwanese experience

Good practice

Supply chain consultation

and involvement

Government-led widening of possible supply chain pool by

creation of local supplier alliances

Clear local content goalpostsClarity on where local content is required (allocation

projects) and where it is optional

Attraction of foreign

partnerships

Foreign OWF developers, contractors and service

providers encouraged to set up Taiwan base and/or

partnerships

Challenges

Low sectoral baselineVery large capacity building investments required from a

generally small-scale private sector

InfrastructureComplicated processes for infrastructure permitting and

development

Unclear policy developmentFIT and PPA, cabotage law evolution,…

may not be beneficial for project elaboration.


Key takeaways | Taiwan vs. Japan

Market size 5.5GW firm with possible extensions 10GW? by 2030?

Permitting Firm framework

Permitting and consenting ‘participative’

Significant regulatory problems remain

Long EIA cycles, space utilization,…

Industry None at scale (WTG, FDN, cable) World-leading manufacturers, steel mills,…

Marine

equipment

Only small-scale equipment available and

firms present. Local investment plans exist

but hampered by small scale.

Large, skilled marine contractors exist.

Investments ongoing in new equipment

and in existing firms.

Technical

considerations

Taiwan Strait:

Rough working environment, deep waters

Japan has the clear opportunity to develop

floating foundations domestically

Local content

drivers

Government requirements to developers

Future cabotage developments?

Cabotage, presence of industrial players

Possibility for innovation?

Export potential As yet unclear Existing


Key takeaways | Conclusions

► Creating local supply chains is a function of government policy.

► In Taiwan, through CDWE, DEME espouses a two-prong model:

› Specialist main equipment (huge investment) sourced from DEME fleet

› All other equipment preferentially sourced locally, from MTeam members

› Creating room for local players to test the waters and expand the complexity of their operations

► Japan clearly has the opportunity to mobilise its industrial capacity and innovation to develop highly

domestic-led OWF projects.

► Having local concerns in the supply chain forge partnerships with experienced foreign parties can help

speed up this process and bring down project cost.

► Local parties’ investment appetite is governed by clear and stable policy frameworks with a clear future

development path.

DEME │ Creating land for the future

DEME │ CREATING LAND FOR THE FUTURE

This presentation contains

proprietary and/or confidential

information.

Any disclosure, copying, distribution or

use of this information/the ideas

incorporated is strictly prohibited.

This information is not to be considered

as a representation of any kind.

Any intellectual and industrial

property rights and any copyrights with

regard to this presentation, and the

information therein, shall remain the

sole property of DEME.

deme │ lessons learned in taiwan2019/02/02 · lessons learned in taiwan tokyo 24/01/2019 2 deme...

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