Global Dredging Market 2022-2028

Global Dredging Market 2022-2028

Dredging and underwater excavation are the key aspects of the design and construction of certain key elements of a fishing harbor’s infrastructure. There are mainly two types of dredging performed namely, capital dredging and maintenance dredging. Capital dredging is an important aspect in the design of a new port to access channels or water deepening of a basin that is required for the first time. Maintenance dredging is intended to keep certain access channels, fishing port basins, and canals subject to high sedimentation open to navigation.

The global dredging market is estimated to grow at a steady CAGR of 3.2% during the forecast period (2022-2028). The market value was $16.4 billion in 2021 and is anticipated to reach around $20.4 billion in 2028. The global dredging market is driven by increasing seaborne trade, expansion of the ports, and increasing water reservoir activities. Seaborne trade is the mainstay of international trade and the global economy, which is the major factor contributing to global dredging industry growth. In 2021, approximately 80% of global trade by volume and more than 70% of global trade by value are carried by sea and handled by ports globally. According to United Nations Conference on Trade and Development (UNCTAD), the global ocean-based economy is estimated at $3 trillion a year, which is around 5% of global GDP.However, due to the global pandemic, global GDP reached -4%. Growth in maritime trade decelerated in line with the decline of global GDP at 4.1%.

The acceleration of the offshore wind market is contributing significantly to the dredging industry in offering offshore services to wind farm projects. The major factors contributing to the offshore wind market include the growing demand for renewable energy due to fluctuating crude oil prices and increasing environmental concerns. Offshore wind has the biggest growth potential of any renewable energy technology. Global cumulative offshore wind energy installed in 2021 touched around 6.1 GW, led by China, and is expected to increase rapidly. Moreover, increasing pipeline projects for offshore wind energy further gives a boost to the market growth and offer considerable opportunity for the future growth of the dredging market. According to the Department of Energy, in 2021, the US offshore wind energy project development and operational pipeline grew to a potential generating capacity of 35,324 megawatts (MW). Specifically, the pipeline experienced a 24% increase in 2021, up from 28,521 MW in 2021. Rising energy demand is also fueling the demand for dredgers activities. The governments along with the companies are constructing offshore oil & gas and wind energy infrastructure to fulfill the future energy demand. For instance, in June 2021, Total Energies has agreed with SSE Renewables, to acquire a 51% stake in the Seagreen 1 offshore wind farm project for an upfront payment. The 1,140 MW project has reached simultaneously a final investment decision and financial close. The purchase agreement also covers a potential extension opportunity of up to 360 MW. In April 2021, the US Department of Energy (DOE) announced a $20 million investment in offshore wind energy resource characterization and technology demonstrations. Moreover, in July 2021, Saudi Aramco announced the offshore Marjan field expansion. The development will entail a new offshore gas-oil separation plant and 24 offshore oil, gas, and water injection platforms.

Fuel is a significant component of a dredging project. Fuels can easily represent 30% of dredging costs. Due to a drastic increase in fuel prices, the overall cost of the project has increased which has impacted the market value in 2021 and 2022. Crude oil prices increased following the further invasion of Ukraine by Russia. Sanctions on Russia and other actions contributed to falling oil production in Russia and created significant market uncertainties about the potential for further oil supply disruptions. Thus, the overall industry observed a peak in 2021 and 2022 compared to past growth trends.

The global dredging market is estimated to grow at a steady CAGR of 3.2% during the forecast period (2022-2028). The market value was $16.4 billion in 2021 and is anticipated to reach around $20.4 billion in 2028. The global dredging market is driven by increasing seaborne trade, expansion of the ports, and increasing water reservoir activities. Seaborne trade is the mainstay of international trade and the global economy, which is the major factor contributing to global dredging industry growth. In 2021, approximately 80% of global trade by volume and more than 70% of global trade by value are carried by sea and handled by ports globally. According to United Nations Conference on Trade and Development (UNCTAD), the global ocean-based economy is estimated at $3 trillion a year, which is around 5% of global GDP.However, due to the global pandemic, global GDP reached -4%. Growth in maritime trade decelerated in line with the decline of global GDP at 4.1%.

The acceleration of the offshore wind market is contributing significantly to the dredging industry in offering offshore services to wind farm projects. The major factors contributing to the offshore wind market include the growing demand for renewable energy due to fluctuating crude oil prices and increasing environmental concerns. Offshore wind has the biggest growth potential of any renewable energy technology. Global cumulative offshore wind energy installed in 2021 touched around 6.1 GW, led by China, and is expected to increase rapidly. Moreover, increasing pipeline projects for offshore wind energy further gives a boost to the market growth and offer considerable opportunity for the future growth of the dredging market. According to the Department of Energy, in 2021, the US offshore wind energy project development and operational pipeline grew to a potential generating capacity of 35,324 megawatts (MW). Specifically, the pipeline experienced a 24% increase in 2021, up from 28,521 MW in 2021. Rising energy demand is also fueling the demand for dredgers activities. The governments along with the companies are constructing offshore oil & gas and wind energy infrastructure to fulfill the future energy demand. For instance, in June 2021, Total Energies has agreed with SSE Renewables, to acquire a 51% stake in the Seagreen 1 offshore wind farm project for an upfront payment. The 1,140 MW project has reached simultaneously a final investment decision and financial close. The purchase agreement also covers a potential extension opportunity of up to 360 MW. In April 2021, the US Department of Energy (DOE) announced a $20 million investment in offshore wind energy resource characterization and technology demonstrations. Moreover, in July 2021, Saudi Aramco announced the offshore Marjan field expansion. The development will entail a new offshore gas-oil separation plant and 24 offshore oil, gas, and water injection platforms.

Fuel is a significant component of a dredging project. Fuels can easily represent 30% of dredging costs. Due to a drastic increase in fuel prices, the overall cost of the project has increased which has impacted the market value in 2021 and 2022. Crude oil prices increased following the further invasion of Ukraine by Russia. Sanctions on Russia and other actions contributed to falling oil production in Russia and created significant market uncertainties about the potential for further oil supply disruptions. Thus, the overall industry observed a peak in 2021 and 2022 compared to past growth trends.

Europe is estimated to contribute significantly to the global dredging market over the forecast period. The growth of the region is backed by the presence of major market players such as Jan De Nul, DEME, Boskalis, and Van Oord. The dredging sector is important in Belgium and the Netherlands. In the Netherlands 160 companies with total annual sales of more than $1 billion and employing 10,000 people are active in the dredging sector. The dredging sector in Belgium consists of only 2 companies namely Jan De Nul and DEME. The Belgians and Dutch have built up a very strong reputation, not only by protecting their own countries against the sea, but also by carrying out large dredging projects across the globe, such for instance in the Middle East (Dubai), Latin America (Panama Canal), and Far East (Singapore, the airport of Hong Kong). The European market is estimated to reach $4.0 billion in 2028 as compared to $3.3 billion in 2021 at a CAGR of 2.9% during the forecast period.

The market is influenced by the presence of several players that are offering dredging services across the globe. The dredging market is fragmented however top ten companies in the market cover around 2/3rd of the global revenue. The market is closed as most of the government contracts are provided to domestic companies only. The major players in the global dredging market include China Communications Construction Company, Ltd., Dredging Environmental and Marine Engineering N.V., Great Lakes Dredge and Dock Co., Van Oord N.V., Royal Boskalis Westminster N.V. These companies are involved in dredging, coastal protection, coastal restoration, and port expansion projects. These market players adopt various strategies to remain competitive in the market. Mergers and acquisitions, partnerships, collaborations, and new development in existing technologies such as shifting to biofuel, and geographical expansion, among others, are key strategies that are adopted by market players.