Carnival moves toward shipbuilding in China

By Tom Stieghorst
Carnival Corp. said it signed a memorandum of understanding that could lead to a cruise ship being built in China.

The memo is an agreement between Carnival Corp. and the China State Shipbuilding Corp. (CSSC) to explore the formation of a joint venture.

The goal of the venture would be to construct a modern cruise ship in China together.

China State Shipbuilding Corp. is the largest shipbuilder in China, according to a Carnival Corp. announcement.

The Italian shipbuilder Fincantieri could partner in the joint venture should it be formed, Carnival Corp. said.

There is no firm agreement to build yet, nor is it clear who would own or operate any ship that results from the joint effort.

Carnival Corp. said the venture is “aimed at accelerating the development and growth of the Chinese cruise industry.”

The agreement was made official at an Oct. 14 signing ceremony at the ninth China Cruise Shipping and International Cruise Expo in Tianjin.

“This really is a breakthrough day for all of us at Carnival as well as our friends at the CSSC,” Carnival Corp. CEO Arnold Donald said.

Carnival Corp. said its contribution to the venture would be to use its design and shipbuilding expertise to create the “vision, definition and overall specifications” for the China-built cruise ship.

The memorandum also includes the exploration of other possible joint venture opportunities with CSSC including the potential to form a domestic cruise company, port development, talent development and training as well as supply chain and logistics, Carnival Corp. said.

No major cruise line has ever built a ship in China, although a few have been built in Japan.

A Chinese Ministry of Transport forecast estimates there will be 4.5 million cruise passengers sourced in China by 2020.

Two Carnival Corp. brands, Costa Cruises and Princess Cruises, are already selling cruises in China. Carnival said it will have 220 port calls from five brands in China in 2014.

Charity aims to ‘double the hope and healing’ with ship

By Tom Stieghorst
*InsightHardly a week goes by without an announcement by someone in the cruise industry of a charitable endeavor or donation.

Recently I was at a lunch on a cruise ship at the Port of Miami, where Azamara Club Cruises presented a $4,000 check to the head of one of the big travel agency networks, who is trying to raise $125,000 for the Leukemia and Lymphoma Society.

A week earlier, Carnival Corp. and the Carnival Foundation gave $200,000 to Create Common Good, an innovative job training program.

And millions have been raised across the industry this year for Typhoon Haiyan relief in the Philippines.*TomStieghorst

One of the biggest cruise-connected projects I have heard of, however, is the push to build an entire ship for medical care and training in Africa.

Mercy Ships, a 35-year-old charity, is raising funds for its first purpose-built hospital ship. It announced a contract at Cruise Shipping Miami with the China Shipbuilding Industry Corp. for a 36,600-gross-ton ship to be delivered in mid-2017. Plans call for the ship to be built at the Tianjin Xinang Shipyard.

Donald Stephens, founder and president of Mercy Ships, wouldn’t reveal the exact budget, but said it is more than the $75 million spent to convert and retrofit a cargo ship or ferry, such as the Africa Mercy, the latest of four ships the organization has operated.

With a purpose-built ship, Stephens said his group can deliver more beds, more and better operating rooms and improved training for medical personnel in the African countries where it mainly operates.

“You can design the ship to the hospital, rather than design the hospital around the ship,” he said.

Mercy Ships is in what Stephens said is a “quiet phase” of fundraising, where it is pursuing big-money donors to build momentum. It will soon begin seeking smaller contributions from individuals, he said.

One big gift has come from bond king Bill Gross and his wife, Sue, who contributed $20 million to match a gift of identical size from an anonymous donor.

Gross is the founder of Pimco, which runs the largest bond fund in the U.S. and has $1.9 trillion of assets under management.

Among the services delivered by the existing ship is maxillofacial reconstruction and tumor removal surgery. A three-minute video of various deformities and defects treated by Mercy Ships makes a compelling case for the need for action.

“Our goal with this [ship] is to more than double the hope and healing through life-changing surgeries provided to those with little access to specialized health care,” Stephens said, “and to increase the partnership of training and educational support of health professionals within the developing nations our ships will continue to serve.”