TORM established a joint venture with scrubber manufacturer ME Production and Guangzhou Shipyard International (GSI) in order to manufacture and install scrubbers in China and deliver them for both newbuildings and retrofitted vessels. TORM will hold a stake of 27.5% in the new joint venture.
TORM rests this decision upon the International Maritime Organization (IMO) sulphur cap that will prohibit the carriage of fuel oil with a sulphur content above 0.5%, compared with 3.5% now, a step to improve shipping's environmental footprint and it is considered to have a huge impact upon the oil market.
In addition to the economic potential of the joint venture, it allows us to secure availability of high-quality scrubbers, which could pose a challenge to some owners as we approach the 2020 deadline for sulphur compliance set by IMO.
Head of Technical Division at TORM Jesper S. Jensen said.
TORM has ordered a total of 16 scrubbers with ME Production China and signed a letter of intent for 18 scrubbers more with the new joint venture.
Furthermore, TORM pledged to install scrubbers on 21 vessels and potentially up to 39 vessels or roughly half of the company’s fleet. The capital expenditures related to the confirmed scrubber orders are on average estimated below 2 million USD per scrubber including installation costs.