Carnival, Fincantieri to Support China Cruise Industry Growth

MOU with world’s largest shipbuilder will explore opportunities for a potential joint venture focused on the construction of cruise ships for the Chinese market

By MarEx 2014-11-21 10:19:00

Carnival Corporation & plc announced it has signed a memorandum of understanding (MOU) with Fincantieri S.p.A., the world's largest cruise ship building company, to explore the possibility of a shipbuilding joint venture aimed at accelerating development and growth of the cruise industry in China.

The MOU between Carnival Corporation and Italy-based Fincantieri outlines the framework for evaluating and exploring a potential shipbuilding joint venture for constructing cruise ships for the Chinese market.

Today’s signed MOU with Fincantieri follows the news that Carnival Corporation and the China State Shipbuilding Corporation (CSSC), China’s largest shipyard, had signed an MOU in mid-October to work together on a potential collaborative joint venture focused in shipbuilding in China.

Both MOUs involving Carnival Corporation include the possibility of forming a shipbuilding joint venture that could become a three-way arrangement involving Carnival Corporation, Fincantieri and CSSC. In concept, the potential shipbuilding joint venture would be the first three-nation collaborative effort to build the first-ever, world-class cruise ships constructed in China.

As part of the possible joint venture, Carnival Corporation would work closely with CSSC and Fincantieri to provide its ship design and shipbuilding expertise to create the vision, definition and overall specifications for the China-built cruise ship for the Chinese market. Fincantieri and CSSC would work closely together in the proposed venture on shipbuilding production capacity in China. Based on Fincantieri’s broad experience as the largest shipbuilder in the world, the company would provide specialist services to help augment CSSC’s world-class shipyards that have a strong track record of delivering quality industrial vessels.

“Building on our groundbreaking MOU signed with CSSC last month, this new agreement with Fincantieri gives us the opportunity to work with our longtime partner to further explore a formal joint venture that could forever change the landscape of shipbuilding in China,” said Arnold Donald, CEO of Carnival Corporation. “After working diligently to get a deep understanding of China’s aggressive cruise ambitions, we’re collaborating with two of the world’s top shipbuilders in Fincantieri and CSSC to establish a framework for a world-class Chinese shipbuilding venture designed to help accelerate growth and demand for cruising in China in the years to come.”

Fincantieri’s Chief Executive Officer, Giuseppe Bono, said: “This agreement with Carnival, to which we are bound by a consolidated partnership, and with CSSC testifies our determination in pursuing a strategy that increasingly establishes Fincantieri as a global and reference player in the sector, with strong presence in all the markets that can ensure a future in our business. Indeed, new international scenarios are emerging, and with them new challenges arise in addition to existing ones, and we are glad to contribute together with Carnival to develop the cruise shipbuilding capacity in China for the Chinese market. For this reason, our commitment must be ever-stronger in order to enable us to take advantage of such opportunities and continue to be an example of Italian style in the world.”

The Chinese Ministry of Transport (MOT) projects China to be the second largest global cruise market after the U.S. in the next several years based on economic growth, increased spending power of Chinese consumers and growing demand for cruise vacations. China could see 4.5 million cruise passengers by 2020, according to the MOT, and is expected to eventually become the world’s largest cruise market. Potential partnerships like the ones being explored between Carnival, Fincantieri and CSSC are aimed at supporting the MOT's pro-growth cruise policies and the rise of overall tourism in China.

As part of the MOU signed with CSSC last month, Carnival Corporation will explore other joint venture opportunities beyond shipbuilding, including the potential to form a domestic cruise company, port development, talent development and training as well as supply chain and logistics. The company will continue to pursue every opportunity to support the growth of cruising in China, while continuing to provide joyful and memorable cruise vacations for guests already sailing on its brands in China.

Carnival Corporation just recently announced its plans for immediate capacity growth in China in 2015 to meet growing demand. With Costa Cruises adding the Costa Serena in China in April of next year, Carnival Corporation will be the first global cruise company with four ships homeported in China. Costa Serena joins Costa Atlantica, Costa Victoria and Sapphire Princess already homeported in China. Carnival Corporation is growing its leading market presence by 140 percent from 2013 – 2015 and expects to carry 500,000 cruise passengers in China in 2015.

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