shipbuilding industry shipbuilding industry in romania in romania

THE CHANGING STRUCTURE OF THE WORLD SHIPBUILDING INDUSTRYTHE CHANGING STRUCTURE OF THE WORLD SHIPBUILDING INDUSTRY

PARIS 4PARIS 4--5 DECEMBER 20085 DECEMBER 2008

MINISTRY OF ECONOMY AND FINANCE

SHIPBUILDING INDUSTRYSHIPBUILDING INDUSTRY IN ROMANIA IN ROMANIA –– CONTINUITY AND COMPETITIVENESS CONTINUITY AND COMPETITIVENESS ––

Mr. VICTOR SCHMIDTMr. VICTOR SCHMIDT Mr. MARIN DANMr. MARIN DANDEPUTY GENERAL DIRECTORDEPUTY GENERAL DIRECTOR A.N.C.O.N.A.V.A.N.C.O.N.A.V.

SEVERNAV S.A. SHIPYARD

204, Timisoarei Str., 220242, Drobeta Turnu Severin - ROMANIAPhone: (40) 252 314270 Fax: (40) 252 314675

E-mail:[email protected], http/www.severnav.ro

ADDRESS:


1 HULL BUILDING SHOP2 WAREHOUSE FOR ROLLED MATERIALS 3 STEEL PLATES AND PROFILES SHOT BLASTING SHOP 4 SOCIAL-TECHNICAL APPENDAGE5 ENGINE PRESERVATION HALL6 CENTRAL WAREHOUSE7 MAINTENANCE SHOP8 CANTEEN/MESSROOM/OFFICES

9 MEDICAL DISPENSARY AND OFFICES10 HEAD-OFFICE, COMPUTER CENTRE, OFFICES11 PAINT AND LUBRICANT STORE12 ELECTRIC AND CARPENTRY SHOPS13 MECHANICAL AND PIPING SHOP14 LOCKSMITH’S SHOP15 COMPRESSOR STATION16 SHIP RIGGING WHARF AND PLATFORM

17 SHIP RIGGING BASIN18 SHIP RIGGING WHARF19 BUILDING WAYS AND SLIPWAY20 BLASTING AND PAINTING SHOP21 OUTFITTING AND TESTING PIER

Yard area: 219.146,53 sqm

-On the assembling berth from the First factory, equipped with cranes of 50 tf and 16tf can be mounted in the same time 8 vessels.

-The outfitting quay from the First Factory has an available working area of 450 sq.m, with double berth and a basin with an (surface) area of 6.240 sq.m , the depth of water is 5,75m.

-The production halls are equipped with cranes and travelling cranes of 100, 50, 16, 12, 10 and 5 to.

VECTORS OF EVOLUTION INSIDE SECTOR

REVISED LISBON STRATEGY FOR ENLARGED EUROPE (2007-2013)

ACTION PLAN REGARDING SUSTAINABLE INDUSTRIAL POLICY (JULY 2008)

Leader SHIP 2015 PROGRESS REPORT 2007

THE PROGRAM OF ROMANIAN GOVERNMENT

PRIORITIES OF THE SECTOR

SHIPBUILDING INDUSTRYSHIPBUILDING INDUSTRY IN ROMANIAIN ROMANIACONTINUITY AND COMPETITIVENESSCONTINUITY AND COMPETITIVENESS

PRIORITIES OF THE SECTOR

• Establishing a Level Playing Field in World Shipbuilding • Improving Research, Development and Innovation Investment • Developing Advanced Financing and Guarantee Schemes • Promoting Safer and More Environment - Friendly Ships • A European Approach to Naval Shipbuilding Needs • Protection of Intellectual Property Rights (IPR) • Securing the Access to a Skilled Workforce • Building a Sustainable Industry Structure

STRUCTURE OF SHIPBUILDING SECTOR IN ROMANIA

SHIPYARDS

STX RO Offshore Tulcea

STX RO Offshore Braila

Damen Shipyards Galati

Constanta Shipyard

Daewoo Mangalia Heavy

SHIP DESIGN COMPANIES

Ship Design Group Galati

Dutch Marine Trading Galati

ICEPRONAV Galati

Only SRL Galati

NASDIS Galati


Daewoo Mangalia Heavy

Industries

2x1 Holding Cape Midia Shipyard

Severnav Drobeta Turnu Severin

Orsova Shipyard

Giurgiu ATG Shipyard

NASDIS Galati

SHIP REGISTER COMPANIES

Germanischer Lloyd Romania

Bureau Veritas Romania Control

International

Det Norske Veritas Romania

HIGH EDUCATION AND TRAINING INSTITUTIONS

- University “Dunarea de Jos” Galati

- University Ovidius Constanta – Faculty of Mechanical Industrial and Maritime Engineering

- Naval Academy “Mircea cel Batran”

- Maritime University of Constanta

SHIPBUILDING SECTOR MARKET SHARE IN CGTYEAR NUMBER BUILT

(CGT)EXPORT( CGT)

TOTAL VALUETHOU EURO

EXPORT THOU EURO

2002 12 148,587 148,587 272 272

2003 9 98,605 98,605 151 151

SHIPBUILDING SECTOR MARKET SHARE IN CGT

2003 2007

Weight of Shipbuilding sector in GDP % 0,76 0,82

Productivity of Shipbuilding Sector CGT/CAPITA 4,93 15,42


2004 9 93,865 93,865 134 134`

2005 18 246,915 246,915 331 331

2006 71 574,456 447,704 580 461

2007 27 282,476 282,476 410 410

Shipyards Turnover-2007 Shipyards ‘Employers-2007Turnover – 410 mil EURO Total = 10,800Shiprepair~54 mil EURO Ship repair = 900Merchant New building ~400 mil Euro Merchant New building = 9,700Naval ~ 10 mil Euro Naval =200The ship export represents 94% of the total production of the Romanian shipyards, thus shipbuilding improves the export/import balance.Products-Merchant Vessels (Tankers, Bulk Carriers, Container Feeders, LPG, Barges, etc.)-Offshore &Specialized Vessels (AHTS,PSV, Dredgers, Tugs, Yachts, etc)-Ship repairs &ship conversions-Naval Vessels

Containers 4860TEU – already delivered Crude Oil Tanker 69K DWT – already delivered

New Building Commercial Ships : 180,000 DWT BULKCARRIER & 11,000 TEU CONTAINERSHIP (8 Vessels / Year)

Containers 5560 TEU – delivered Containers 5560 TEU – under progressin different stages (biggest container build in Black Sea area)

Capesize Bulk Carrier 180k DWT – start building

REPAIRS & REPAIRS & CONVERSION CONVERSION

WORKSWORKS

Steel WorksSteel Works

Docking , Docking , Blasting & PaintingBlasting & Painting

Pipe WorksPipe Works

Mechanical & Mechanical & Electrical WorksElectrical Works

SANTIERUL NAVAL CONSTANTA S.ACONSTANTA SHIPYARD

Conversions Projects:Conversions Projects:Conversions Projects:Conversions Projects:A A –– Buoyancy Barge into to a Desalination PlantBuoyancy Barge into to a Desalination Plant

B B –– Single Hull to Double Hull TankersSingle Hull to Double Hull Tankers

C C –– Single Hull Aframax to Post Panamax BulkcarrierSingle Hull Aframax to Post Panamax Bulkcarrier

Conversion Project AConversion Project A Conversion Project BConversion Project B Conversion Project CConversion Project C

NEWBUILDING Production FlowNEWBUILDING Production Flow

TECHNICAL PROGRESS through TECHNOLOGY Design & EngineeringDesign & Engineering

Planning Planning Sea trialsSea trialsModern and Efficient Ship DesignsPromotion in the market – Building large series

SNC PC-41- 41 000 dwt - Oil Product & Chemical IMO 3 Tanker

SANTIERUL NAVAL CONSTANTA S.ACONSTANTA SHIPYARD

DELIVERYDELIVERY

Materials SupplyMaterials Supply

Shop Shop –– primingpriming Steel cuttingSteel cuttingAssembly & Assembly & Indoor outfittingIndoor outfitting

Blasting &Blasting &PaintingPainting Erection Erection

in the dry dockin the dry dock

OutfittingOutfitting

SNC PC-41- 41 000 dwt - Oil Product & Chemical IMO 3 Tanker

SNC PC-50 - 50.000 dwt - Oil Product & Chemical IMO 2 Tanker

SNC BK- 60 - 60 000 dwt - SUPRAMAX Bulk carrier

SNC TK-115 - 115 000 dwt - AFRAMAX Crude Oil Tanker

DAMEN SHIPYARDS GALATI

Heavy Lift vessel Patrol vessel

Platform Supply vessel Tug vessel

Advanced & Outfitted Hulls for off-shore industry completed inside the group

Complete vessels built in STX RO Offshore Braila

PRODUCT MIX DESCRIPTION• Hulls with a high outfitting degree :

• Specialized vessels for the offshore industry;

• Multipurpose supply vessels;• Anchor handling vessels;• Other specialized vessels for

the offshore industry;• Factory-freezer trawlers;• Medium size ferries.


Main ParticularsLength o. a. 116,00 mLength b. p.p. 105,00 mBreadth mld. 17,60 mDepth to main deck 9,90 mDesign Draft 5,50 mDeadweight abt. 3800 TMain Engine Output abt. 3840 KwD.G. - 2 pcs. Output 1.250 KVAD.G. - 1 pc. Output 400 KVAE.D.G..- 1 pc. Output 270 KVAShaft Gen. Output 625 KVABowtrusther Engine Output 300 KwService speed 15,0 kmNo.of passengers 220 passengers

- 27 ship crew

PASSENGER - CARGO VESSELS

- 27 ship crew - 36 Hotel/Restaurant personnel

Classification: BV, I 3/3 E + PASSENGER SHIP/F; DEEP SEA + MACH +AUT - MS

ETHYLENE GAS CARRIER 8.600 cbmMain Particulars

Length over all 129,00 m

Breadth 17,80 m

Draught 8,60 m

Classification: GERMANISCHER LLOYD 100 A4 E1

Liquefied gas tanker MC E1 AUT Inert

Main Engine: Main Engine output (MCR): abt. 6000 KW

Service speed: abt. 16,5 Knots

Cargo System: Is consisting of: 3 independent cargo tanks, type C (bilobal tanks); cargo piping system; cargo pump plant; cargo hold ventilation system; cargo reliquefaction plant; inert gas plant; one hose handling crane electric-hydraulically is provided.

Designing and building inland and marine vessels up to 10.000 dwt.Specialized in steel constructions, naval equipment and ship repair works.Aluminum, GRP and steel craft building.Export-import activity, goods shipping and technical assistance.

LABOUR FORCE – Abt. 1550.

ARCHIVED EVENTS

two RORO Tanker vessels of 2.400dwt fora Greek company. new design andworldwide innovation.

two luxury Motor yachts of 63 and 75 ft for


two luxury Motor yachts of 63 and 75 ft fora Dutch company.

PLANNED EVENTS

intensive modernization program intendedto improve the working technologies,to comply with the highest standards.

invest to improve the quality of itsproducts, in the following priorityobjectives:

- integrated informational system;

- shut blasting, blasting and paintingequipment;

- equipment for improving of life andworking conditions of its employees;

- environment protection.

EVOLUTION OF PERSONNEL IN ROMANIAN SHIPBUILDING INDUSTRY

28756

25000

30000

35000


20407 20500 20400

17285 17303 17260 16600 16580

10800

0

5000

10000

15000

20000

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

SHIPYARD SHIPREPAIR

ACTIVITY FACILITIES

STX RO Offshore Braila Minor activity Combined yard

Constanta Shipyard Repair and building Combined yard

Damen Shipyards Galatz Minor activity Combined yard

Daewoo Mangalia Heavy Repair and building Combined yard

SHIPREPAIR SUB-SECTOR


Daewoo Mangalia HeavyIndustries

Repair and building Combined yard

2x1 Holding Cape MidiaShipyard

Repair yard Repair yard

Mangalia Shipyard (Navy) Repair and building Combined yard

ORSOVA Shipyard Minor activity Combined yard

SEVERNAV Drobeta Turnu Severin

Repair and building Separate repair facility

STX RO Offshore Tulcea Minor activity Combined yard

The yards highlighted in bold print in the above table are considered to have ship-repair as either thesole or significant activity whereas the other yards are considered to operate currently as predominantlyshipbuilding yards.

ANALYSIS OF SECTORS

STRONG POINTS WEAK POINTS

Skilled labor force at a low costGood facilities – dry docks, slipways or

synchroliftGood quality of the productsA long traditionGood geographical position: Black Sea Coast –

1000 km on Rotterdam - Constantza Waterway

Under used of existing capacitiesLow productivity – within 15.42 cgt / capitaLack of cash and rather high debts for the small

companiesSometime Delays in delivery time


1000 km on Rotterdam - Constantza Waterway

Developments in shipbuilding

The order book of the Romanian shipyards is expected to record about 494,824 cgt at the end of2008.

Within 2006-2007, 5,800 workers left Romanian shipyards for jobs in EU and USA shipyards. Theworkforce shortage seriously affected the vessel deliveries, therefore the financial figures for 2007.

The engineering design recorded a significant number of orders.

Education and training will be enhanced in order to cover the effects of personnel loss.

Evolution of ship maintenance, repair & conversion

The total turnover related to the ship repair & conversion activity decreased in 2007 with 21% incomparison with 2006.

GOVERNMENT INITIATIVES

The Government finalized the privatization program of the companies in this sector.The privatization methods were:- Selling the State owned shares package to strategic investors (SN Constanta, Damen Galati, STX RO OffshoreBraila, STX RO Offshore Tulcea)- Capital gains ( joint – venture) (Daewoo Mangalia Heavy Industries, Severnav Drobeta Turnu Severin, Navy YardMngalia)During the privatization process a program of support measures for the shipyards was applied (2004-2006),amounting 23,316,232 EURO.

These support measures were generated for the restructuring purposes and for privatization and export promotion.

Stage of support measures granted to the shipyards between 2004 and 2006, in accordance to the classification of OECD Questionnaires C/WP6 (2007)8

Type of aid/Company 2004 2005 2006 TOTAL


Type of aid/Company 2004 2005 2006 TOTAL2004-2006

A. Direct transfer of funds from Government/Mangalia Shipyard

65,368.7 3,530 - 68897,7

D. Loan’ guarantees / Constanta Shipyard - 7,054,595 - 7,054,595

E. Export credit facilities/Contanta Shipyard, DMHI,STX RO Offshore Tulcea, Braila, Navol Oltenita,Severnav, Mangalia Shipyard, Orsova Shipyard

11,137,747 6,958,709.6 6,427,003 24,523,459

F. Take over of debts by Government or debtreliefs for industry/Constanta Shipyard

9,795,089 3,202,920 - 11,998,009

G. Conversion of the debts into shares/ ConstantaShipyard

11,109,638 31,909,550 - 43,019,188

H..Government revenue that is foregone or notcollected/Constanta Shipyard, DMHI

359,792 83,500 220,240 663,532

I. Rehabilitation of infrastructure / Severnav(Rehabilitation Danube’s bank)

343,023 343,023

TOTAL – Lei(romanian currency) 31,810,657 49,212,804 6,647,243 87,670,704

Average exchange rate LEI/EURO 4.0532 3.6234 3.5245

Total-EURO 7,848,282 13,581,940 1,886,010 23,316,232

• Since 1990, during the restructuring period no new productioncapacities were built.

• No such investments are envisaged in the future.• The restructuring of ownership was completed, except two shipyards.• Improving competitiveness of yards is necessary, in order to allow

them to compete globally without a special support regime:

CONCLUSIONS (1)


them to compete globally without a special support regime:• Quality systems according with ISO standards and certification by well

known classification companies;• Sustaining of innovation activity, in order to promote the most

performing technology• Promotion of legislation concerning the industrial parks and clusters

(especially in the areas Galatzi-Braila and Constantza – Mangalia)• Restructuring and adjustment of existing capacities• Continuous training of the labor force

• Development of marine equipment industry complementary with EU countries

• The poor domestic demand will keep Romanian shipbuilding an export oriented industry for the next years

• Our strategy will pay attention to the international legal framework.• An important role in the restructuring process of the Romanian shipbuilding

industry played the Romanian Shipbuilder’s Association (ANCONAV), set

CONCLUSIONS (2)


industry played the Romanian Shipbuilder’s Association (ANCONAV), set up in 1994.

• Since 2004 ANCONAV was accepted as member of CESA.• Romania was invited for full membership in OECD’s Council Working Party

on Shipbuilding • Romania fully supports the principles of the Agreement Respecting

Normal Competitive Conditions in the Commercial Shipbuilding and repair Industry and is convinced that its coming into force, as soon as possible, could offer long term and improved stability for shipbuilding industry.

THANK YOU VERY MUCH FOR YOUR KIND ATTENTION!


FOR YOUR KIND ATTENTION!

Mr. VICTOR SCHMIDTMr. VICTOR SCHMIDT Mr. MARIN DANMr. MARIN DANDEPUTY GENERAL DIRECTORDEPUTY GENERAL DIRECTOR MANAGER MANAGER -- ANCONAVANCONAV

Tel: + 4021.305.52.00Tel: + 4021.305.52.00 Tel: 0241753340/1249Tel: 0241753340/1249Fax: + 4021.3112434Fax: + 4021.3112434 Mobile: 0722697218Mobile: [email protected]@minind.ro [email protected]@dmhi.ct.ro

shipbuilding industry shipbuilding industry in romania in romania

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