Capital and maintenance dredging works have found traction in several developing economies in Southeast Asia due to their vast infrastructure needs in the water resources sector. Various countries in the region have taken steps to enter into the dredging industry. Demand for dredging is growing steadily as requirements from various infrastructure projects, such as hydro, solar and other renewable energy sectors have risen. An increase in investment in energy infrastructure has further spurred the growth of dredging manufacturers in the region. Players in the Southeast Asian market are also focusing on meeting the rising demand in the mining industry. Besides, increasing government investments in dredging and seaborne trade operations are also major factors contributing to market growth. New revenue streams have also opened up as a result of the increase in investment on building dredging vessels in the region.

Rapid urbanisation is a key trend that has pushed a significant part of the region’s population to coastal areas, leading to measures to reclaim coastal areas and consequently boosting the demand for dredging. An increase in tourism activities that involve keeping beaches in good condition, the rising demand for oil and gas that has pushed energy exploration companies to look towards remote areas, the growing demand for anti-sludge pathways for boats and frequent floods in coastal areasare other factors that have resulted in increasing the demand for dredging services.

Recent trends and developments

The demand for dredging is growing steadily in the region with the increase in import and export activities. Due to an increase in seaborne trade, dredging equipment manufacturers in the region are likely to see a surge in demand over the coming years. Further, various infrastructure projects pertaining to development and expansion of ports have spurred the growth of dredging activities.

Several countries in the region have planned the creation of new berths and terminals at existing ports, as well as the development of new ports. The Philippines is looking at large-scale capacity augmentation of port infrastructure and has awarded a number of dredging projects, including the dredging of Ubay and Talibon ports, the ports of Poctoy and Ambulong, Bauan port, the Nasugbo port, the ports of Poctoy and Ambulong, and the port of Buyabod.

Recently, Dutch company Royal Boskalis was awarded a dredging contract for the land development design and construction of the Manila International Airport in the Philippines. The 1,700 hectare land reclamation project in the Manila Bay has an estimated value of Euro €1.5 billion. This is the biggest project in the history of the Dutch dredging company. Boskalis’s work plan and methodology for the dredging activities, which will be spread over a period of three years, includes measures to prevent soil liquefaction in the entire area through the use of dynamic compaction. Dredging activities in Manila Bay are expected to start in the first quarter of 2021.

The legal aspects of dredging projects in the region are also being reformed to ensure efficient implementation and to avoid delays. In Vietnam, a decree came into effect from January 11, 2019 that focuses on the management of dredging activities in seaport water and inland water areas. It stipulates that dredging projects need to be evaluated for their environmental impact in accordance with the environmental protection law. In the case of maintenance dredging projects with regular annual work volume, the environmental impact assessment is carried out annually or on a cyclical basis up to five years.

The dredging industry in Southeast Asia is also deploying smart technology solutions to enhance operational efficiency. New technologies such as 3D analytical models for linear rock cutting, innovative scow boarding systems and automated dredging monitoring systems are being experimented with. There will be an increase in smart technology deployment aimed at improving operational efficiency. Further, the advent of automated dredging monitoring systems will result in higher adoption across various industries.

Various training programmes pertaining to dredging operations are also being introduced in the region. In April 2020, Thailand completed simulator training for the dredging crew of the irrigation department. Crew members were trained to improve their operational skills by using a CSD simulator; they also took part in classes on dredging theory. Both training courses were set up to ensure smooth start-up of dredging operations. The extensive programme consisted of lessons about safety, the design of the IHC Beaver 40, control elements, dredging procedures, practical issues, hydraulic transport, production, soil and, finally, the procedure for making a dredge plan. The irrigation department of the Thai government will now use these dredgers for the maintenance of rivers, lakes and canals in the north and south of the country.

The industry is also looking at new ways of ensuring environmental safety and energy efficiency. These include the use of renewable fuels and the development of smart solutions for monitoring performance and energy consumption during the dredging process.

Key challenges and future outlook

Dredging activity aids regularity in marine traffic, but comes with various disadvantages. Dredging poses a huge threat to the marine environment and is required to be carried out quite carefully with the help of the right dredgers and dredges. Since the main focus of dredging is to remove submerged deposits, the environmental effects of the process also revolve around this focal point. As a developing region, Southeast Asia has put special emphasis on ensuring that the dredging process does not adversely affect local biodiversity. Hence, various countries in the region are employing proper methods for the process of dredging, and making a substantial contribution to avoid the negative environmental effects of dredging. For instance, the Jan De Nul Group launched its fourth ultra-low emission vessel, which is a medium-sized green vessel, in Singapore in 2019. The dredging vessels feature an advanced exhaust gas filtering system. The emission control technology is compliant with land and inland waterways emission regulations. Over the years, more such product launches have kept the dredging market lucrative.

The global economic slowdown resulting from the Covid-19 pandemic has been felt by the dredging sector as well. However, the impact of the economic slowdown is expected to affect the dredging sector in the Southeast Asian region only in the short term. With the gradual easing of restrictions, the sector is expected to register a positive growth rate once again. Hence, going forward, significant growth is expected in the sector. The increased requirement for deeper ports in the region presents sizeable opportunities for dredging contractors, technology and equipment suppliers, consultants, and other stakeholders.