Mixed fortunes for shipbuilding industry

Date: 20/02/1997

THE shake-out in the European shipbuilding industry has some way to go although the collapse of Bremer Vulkan, Germany's biggest shipyard group, marked a watershed.

Some companies are withering while others are prospering.

Thus, while Astilleros Espanoles will close the book on 1996 with a loss of 217.5 million ecu, Germany's Howaldtswekre Deutsche Werft (HDW) trebled net profit in its last financial year to 65 million ecu from 20 million ecu in 1995/96, delivering vessels to customers as varied as American and Israeli ship owners.

While European yards have ceded markets for tankers and bulk carriers to the Japanese and Koreans, who specialise in assembly-line manufacturing methods, they have cornered the market in key sectors such as luxury cruise liners, high-speed ferries and complex chemicals carriers.

These vessels have more value-added content and thus create more employment. As a result, Europe's world market share estimated by compensated gross tons - an industry measure based on a contract's labour content - is around 30&percent;, while in straight tonnage terms it is only 17-18&percent;.

But even these niche sectors are coming under threat from Japan, which is making its first foray into cruise ships, and from South Korea, which is building its first carriers for liquefied natural gas.

European shipbuilding boasts some first-class companies, such as Norway's Kvaerner group, which has bucked the trend by acquiring yards in Finland, Scotland, east Germany and Russia to become the world's third largest shipbuilder.

Italy's state-owned Fincantieri group is also a world-class shipbuilder, pulling in orders for 20 cruise vessels worth 6 billion ecu in the past seven years. The latest, a 100,000-gross-ton vessel with 1,321 cabins worth 371 million ecu, was ordered in February by the Miami-based Carnival Corporation.