Editorial:

Lean years ahead for the shipbuilding industry

The new millennium started with an exceptional year for the shipyards. The happy times were however not long lived and although the order book of 2001 was well filled the volume of new orders declined dramatically. There is not much suggesting that there will be brighter times ahead, at least not in a short or medium long time perspective.
There are some common factors that will have a significant influence on the future for the shipbuilding industry in Northern Europe. On the market side, the demand for special, high value added vessels is the pre-dominant factor. On the political scene, the international dispute over subsidies will have a significant impact on the competitiveness, whether or not a solution is found, within the EU as well as between EU and South Korea.
Within Northern Europe the situation for the shipyards varies from one country to another. In Norway, 2000 ended with an order rally before the abolishment of state subsidies. 2001 was a significantly weaker year for new orders, but the order book is still well filled being the largest in Europe. Important markets for Norwegian shipyards are the fishing industry and the offshore sector. An impressive competence and know-how have been built up supported by a significant domestic market.
Through the Aker-Kvaerner merger the Norwegian shipbuilding industry is spear-headed by one of the world’s largest players in the market.
Denmark has seen several shipyards closing during the last years. Today the main actors in the industry keeps to their sectors, building container vessels or specialises in smaller/medium sized special tonnage as offshore vessels and high sea fishing vessels.
German and Polish shipyards relies heavily on the container vessel sector. This is a shipping sector where the word over-capacity today is an understatement. For those shipyards it is essential that demand starts to grow in other specialised shipping sectors. German yards are also well reputed in the cruise sector, which we all know had a disastrous year last year. Although there are signs of recovery and rumours about an increase in ordering interest, it will take time before we’ll see an ordering spree for cruise vessels of the same magnitude as during the latter part of the 90s. The same situation applies for the Finnish shipyards being specialised in cruise ships, ferries and ro-ros.
Competition in our region will increase. In the Eastern part there is a rising shipbuilding industry that soon will have shaken the last remains of their Soviet industry and management heritage off their backs. The entrepreneurs are moving ahead, technology is developing and marketing skills are improving at a fast pace. This combined with yet low labour costs will make the shipbuilding industry in Estonia, Latvia, Lithuania and Russia a serious competitor in a significantly larger extent than today.
All in all, a confused political scene and a worrisome market outlook for the next couple of years make further consolidation and probably more closures of shipyards a realistic scenario for the shipyard industry in Europe. But one should never forget one thing: When someone loses there is always someone who wins. The winners will be those who have a creative and innovative strive in technology as well as in business development, and in this respect the Norwegian shipbuilding industry will surely be in the forefront.

//Rolf Petrén Nilsson, Editor-in-Chief

Back to SSG 4, April 5