The European ship repair and conversion sector: A … European ship maintenance & repair activity is...
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The European ship repair and conversion sector: A resilient industry, competitive in the world and committed to EU policies for sustainable growth. The Portuguese view on the maintenance, repair and conversion sector 16 May 2013 EMSA José Ventura de Sousa General Secretary of AIN European Economic and Social Committee
Transcript of The European ship repair and conversion sector: A … European ship maintenance & repair activity is...
The European ship repair and conversion sector:
A resilient industry, competitive in the world and committed to EU
policies for sustainable growth.
The Portuguese view on the maintenance, repair and conversion sector
16 May 2013
EMSA
José Ventura de Sousa
General Secretary of AIN
European Economic
and Social Committee
The WORKING DOCUMENT of the Consultative Commission on Industrial
Change says:
• Ship repair yards are within the shipbuilding industry.
• Ship repair, modernisation and conversion is a specific segment of the
shipbuilding industry.
The Naval Portuguese Association, considers that shipbuilding and ship
maintenance/repair are two different activities, being the preventive
maintenance more significant than the curative maintenance, in Portugal.
It is the good preventive maintenance of the merchant fleets one of the main
factors to ensure a high level of safety in maritime transport and the
environmental protection of seas.
European Economic
and Social Committee
The European ship maintenance and repair industry
The European ship maintenance & repair activity is a dynamic and competitive
sectors in the EU and on a global scale. It has great importance from both
social and economic perspective, due to the fact that is generating intensive
direct and indirect labor, mainly on ship maintenance. In Portugal, the level of
sub-contracting for maintenance and repair represent around 75 % of used
labor force.
European Economic
and Social Committee
The European ship maintenance and repair industry
4.194 4.114 4.163 4.1524.558
3.548
1.991 1.816
1.655 1.722 1.7141.907
1.6221.878 1.802 1.660
5.849 5.836 5.877 6.059 6.180
5.426
3.7933.476
0
1.000
2.000
3.000
4.000
5.000
6.000
7.000
2004 2005 2006 2007 2008 2009 2010 2011
Employment on naval industry
Shipbuilding
Repair and
maintenance
Total Employment
Competent Ship Maintenance, Repair & Conversion
yards contribute to safer and greening shipping
Maintenance of ships need competent yards. Apart from dry docking for
preventive maintenance, vessels require ship repair yards for setting right
collision damages, bottom damages, severe weather damages as well as faulty
new buildings.
The installation of new compulsory systems, for more cleaner and fuel-
efficient ships require competent Ship Repair & Conversion yards.
European Economic
and Social Committee
World shipbuilding is currently facing a severe crisis. Large imbalance between
supply and demand of ships, is causing very low freight rates in all types of
transport, resulting in a ship owners lack of liquidity to invest in new ships, as
well as, in the good maintenance of their fleets.
The state of the European shipbuilding and
ship repair industryEuropean Economic
and Social Committee
18 21 18 1930
23 21
4045
40
57
85
43
17
39 31 25
32 35 37 3846 48 49
71
93
107
138
184194
156
128
111
89
17 17 18 18 20 20 21 23 2529
34 3542 44
52 51
48
0
50
100
150
200
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
World Commercial Shipbuilding Activity
(millions CGT)
new orders
orderbook
completions
Fonte - CESA - Lloyd´s Register - Fairplay
Low freight rates for the dry market
European Economic
and Social Committee
Source: Clarkson - Shipping Intelligence weekly
Low freight rates on shipping
European Economic
and Social Committee
CESA maintenance, repair & conversion turnover
Present turnover on European ship maintenance and repair yards is 7 % below the
average of the observed period. This small negative trend is consistent with the lower
average age of the commercial fleets, that cause a decrease on maintenance work. At
present, there are no more large steel renewals, most of the business is in specialised
work on machinery and systems.
European Economic
and Social Committee
85 85100
140
170 160180 180
86 90 100
135 135123 120
90
136160
180
210226
202
177
146
2.3382.532
3.082
3.720
4.099
3.5013.204
2.973
0
500
1.000
1.500
2.000
2.500
3.000
3.500
4.000
4.500
0
50
100
150
200
250
300
350
2004 2005 2006 2007 2008 2009 2010 2011
Turnover in maintenance and repair in CESA countries
(million euros)
Denmark
France
Portugal(INE
figures)
Total 14
countries
Ship Maintenance, Repair & Conversion is a
sustainable business in Europe
The economic shipbuilding and ship maintenance and repair performances have
different behaviors. Turnover on ship maintenance in 2011 is 19 % below the average
level for the observed period whereas shipbuilding turnover is 60 % below.
315350
390
452
547
371
269
220
178 194210
242
321
169
9274
136157
180210
226202
177146
0
100
200
300
400
500
600
2004 2005 2006 2007 2008 2009 2010 2011P
Mil
hõ
es
de
eu
ross
Shipbuilding and ship repair turnover
TOTAL
Total Shipbuilding
Repair and
maintenance
Source: INE, sistema de Contas Integradas das Empresas
( Integrated Business Accounts System)
European Economic
and Social Committee
Europe will always have a significant market share on ship maintenance,
dealing with vessels trading either cross-Atlantic or within the EU. For
vessels over 30.000 dwt, Portugal (Lisnave) is the leading country in terms
of vessels dry docked.
The market globalization for Ship Maintenance,
Repair & ConversionEuropean Economic
and Social Committee
LeaderSHIP 2020 – maintenance and repair industry
LeaderSHIP 2020 identified the main challenges and opportunities that
occurred following the crisis, and give a strong contribution for the
development of a competitive EU shipbuilding and ship repair industry.
Based on this vision the Commission and the Industry is developing ideas for
recommended actions and projects, as well as for adaptation of policies
where appropriate, with an emphasis on industrial policy and innovation.
It is recommended to pay particular attention to the "greening" of shipping,
through the reduction of emissions from ships, improving of their energy
efficiency, and assure safe shipping and clean seas, in particular, a proper
treatment of ballast water.
The greening of maritime transport is of particular interest for the European
maintenance, repair and conversion yards and for the marine equipment
industry, which has so far shown a better resilience to the crisis.
European Economic
and Social Committee
Market opportunities
Due to the low price of heavy fuel oil during nineties to 2005, the current
merchant fleet was built without concerns regarding fuel economy. As fuel
consumption is related to air pollution, mainly to production of CO2 (for each
tonne of fuel burned three tonnes of CO2 are produced), shipping industry
needs to improve environmental performance of ships, to increase its cost-
effectiveness, besides complying with new environmental regulations.
Concerning world´s merchant fleet, 60 % is more than 5 years old and half of
this fleet was built when the price of fuel was below 30 US$/barrel. Analysts
say that today’s global maritime transport could be carried out with 30%
lower fuel consumption.
The savings on fuel costs will be sufficient to cover the necessary investments
to update world´s fleet. As a result from that, there are large margins to
improve energy efficiency and to reduce emissions from existing and new
ships, and offers good market opportunities for European ship repair yards and
equipment suppliers.
European Economic
and Social Committee
Market opportunities
60 % of world´s merchant fleet was ordered when the price of heavy fuel oil
was below 30 US$/barrel.
European Economic
and Social Committee
Existing and future EU legislation has to be strictly implemented and “exported” tothe international level.
• A more transparent, uniform, efficient and independent system of technicalsurveys of vessels has to be promoted.
• A quality assessment scheme for shipyards at world-wide level should bedeveloped.
• Maintaining and strengthening ship maintenance and repair capabilities inEurope is important to ensure a high level of transport safety andenvironmental protection of seas.
• EMSA must pledge that IMO and EU Directives are respected to assure safeshipping and clean seas, on a time, ship owners have no liquidity to performthe required maintenance of their ships.
Promoting safer and more environmental
friendly ships European Economic
and Social Committee
