New orders raise German hopes, but crisis far from over

31 Jan 2011
Volkswerft bags DFDS ro-ro duo

Volkswerft bags DFDS ro-ro duo

German shipbuilding saw its fortunes improve in 2010, but experts caution, as the New Year dawns, that the crisis is far from over and that despite some new work, more orders are needed, writes Tom Todd.

The consequences of the economic and financial crisis have not yet been overcome, said Juergen Seidel, Mecklenburg-Vorpommern (MV) economics minister, adding “however the situation is slowly stabilising”.

He told a recent maritime economics conference in Rostock that shipyards in Mecklenburg-Vorpommern alone had booked 19 new orders in 2010, nearly all of them special vessels. He contrasted this with 17 orders cancelled in the region since 2008 – a loss of about €660 million. It’s a contrast other German states could also make.

Forming the Baltic’s southern coastline, MV is home to big yards in Wismar and Warnemünde (now collectively the Russian-owned Nordic Shipyards) and to the re-constituted, but still German-owned, P+S Werften which groups together Volkswerft in Stralsund and Peene-Werft in Wolgast. Also in the state is Meyer subsidiary Neptun Werft in Rostock and several smaller, but increasingly significant specialist yards.

Seidel said German shipbuilding needed new concepts, specialisations, offshore structures and light engineering diversification. He added that Berlin must continue to financially support orders.

German shipbuilding association (VSM) head Werner Lundt had a more cautious message for the same conference. “It’s true that compared to 2009 the increased orders are a ray of hope, but there are too few of them to cover existing yard capacities”, he said. Even when 2010 orders were added, the nett result was shrinking order books, he added.

Lundt noted however that the trend away from tankers and container ships to specialist ferries, passenger and ro-ro ships and yachts had opened up new possibilities for component suppliers and other specialist suppliers and manufacturers.

Seidel touched on offshore structures and Lundt might also have added the booming German offshore wind energy sector to the list of high-potential sectors, with its insatiable appetite currently for new types of small supply, personnel transport and maintenance ships.

The sector’s demand for giant new turbines (estimates say many thousands will be needed over the next few years) is also starting to benefit the heavy lift newbuilding sector, not to mention seaports and the construction industry.

But despite the upper-level optimism in Rostock, German yard work forces on-site remain fearful for their future and jobs. They have good reason, given the almost cataclysmic corporate changes and personnel blood-letting which have seen thousands of jobs go in German shipyards over the past few years.

Protests by German yard workers are becoming almost an annual event and the latest, in November, mainly concerned jobs. This time, however, the protests were also directed against a Berlin decision to end financial guarantees for the industry by the close of this year. It came despite appeals again the move from north German states and the VSM.

Germany’s federal states will continue to provide loan guarantees to support local yards but, without Berlin’s contributions, the backing will be smaller, making loans riskier for still-jittery banks and new ship orders more difficult for yards to clinch.

Despite the Berlin decision and Lundt’s comments about lack of capacity cover, new orders being reported by yards big and small across the country continue and are encouraging. Some further corporate changes also appear to have helped stabilise the financial situation.

Among the bigger groups, Nordic Yards in Wismar and Warnemünde, on the brink of collapse not so long ago, now appear at least a little more secure with finance-assured work in hand.

Nordic has just completed the world’s two biggest cruise ferries for Stena. It is now completing a laid-up 2,790 TEU container ship for Hammonia by mid 2011 and will deliver the 170m ice-breaking tanker Nordic AT 19 for Russia in September.

Elsewhere DFDS has just placed a €130 million order with Volkswerft for two 195m, 300 lane-metre ro-ro freight ferries for delivery mid 2012. Meyer Werft, too, is breathing easily again after taking a €1.2 billion order from NCL for the yard’s biggest ships ever - two 143,500 gt newbuilds for delivery in early 2013 and 2014. The icing on Meyer’s cake has been options since placed for four more luxury inland cruise ships at Rostock subsidiary Neptun Werft.

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