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Reorganization In Germany

The bankruptcy problems facing the Bremer Vulkan Group have dominated the German marine industry for the past few months. The company is said to have debt of $1.6 billion, with sales of all assets worth only $.7 billion. Highlighted among the problems faced by the company was the arrest, earlier this year, of company CEO Greidrich Hennemann, who has since been released on bail. In the meantime, there is an intense investigation underway by the European Commission (EC) regarding state aid for Bremer Vulkan, and the German shipbuilding industry as a whole. It is likely that, for political reasons, the Bremer Vulkan Group will be saved by the German government in some form, although it is likely that many of the individual divisions will be autonomized, as is the case already with the former East German yards, which Bremer Vulkan took over after reunification.

Meanwhile, Bremer Vulkan has successfully delivered the first of the Costa cruise ships, Costa Victoria; although there are now some troubles with the second vessel. Bremer Vulkan is seeking a buyer for the hull of a 78,000-gt cruise vessel currently being completed at its subsidiary Lloyd Werft, Bremerhaven. Costa Olympia, owned by a subsidiary of the shipyard, is nearly half completed. The vessel will be delivered to Genoa-based Costa Crociere by the middle of next year. The Italian operator had an option, which ran out on July 2, to buy Costa Olympia's hull from the bankrupt group, but had made no decision at that time.

The breakup of the Bremer Vulkan Group has led to the two main, former East German yards — MTW Wismar and Volkswerft Stalsund — to come under the wing of the newlyformed Ostee-Beteiligungsgesellschaft, a new base from which both yards will continue to operate.

However, Bremer Vulkan is continuing to take orders, the latest being two 2,700-TEU containerships for Munich-based Conti Group; and two passenger/cargo ferries for Tunisia, although this order is being investigated by the EC concerning the amount of subsidy involved.

Following the successful completion of P&O's Oriana during 1995, and Celebrity Cruises' Century earlier this year, Papenburg's Meyer Werft is currently busy with the second two Celebrity ships, Galaxy due for delivery later this year, and the third during 1997. When the Celebrity ships have been completed, Meyer Werft starts work on two, 2,800 passenger capacity cruise ships under a $700,000 contract from Star Cruises, which operates out of Singapore. Meanwhile, HDW, Keil, is busy working on a contract for a series of eight 3,500-TEU containerships for Zim Israel, which will busy the yard up to the end of 1997.

Latest orders in the German shipbuilding industry include a series of eight 2,500-TEU containerships, all for German owners from Volkswerft Stralstrand; further orders, again from German owners for the new 700-TEU design available from J J Seitas, Hamburg; a series of four 2,500-TEU containerships for German owner Peter Dohle from Kvaerner Warnow Werft, the yard already building a series of four similar ships for Cyprus' Interorient; and an increase from four to six of a series of 2,500- TEU containerships for CP Offen from Flender Werft. Many German owners are expanding fleets in the small range of containerships (up to 2,000 TEU). However, not all German orders are going to German yards, the Polish yard at Szczecin being the largest recipient of this market sector.

Both Germany's large ship repair yards, Hamburg's Blohm + Voss (B+V) and Bremerhaven's Lloyd Werft, are currently undergoing reorganization programs as competition within the European area heats up, especially from former Eastern European nations. Both yards are, however, experiencing fairly successful times.

In the future, all business activities at Hamburg's B+V will be taken over by two newly formed companies — Blohm + Voss GmbH and Blohm + Voss Industrie GmbH — resulting in a more customer-related effect. Blohm + Voss GmbH will take over all yard activities related to ship repair, conversions, shipbuilding of commercial and naval vessels, marine equipment and consulting. Blohm + Voss Industrie GmbH continues with all activities of general mechanical engineering, energy, environmental and army defense technology, as well as plans and components for marine applications. The detachment of business operations has been effected under the provisions of the German transformation law (Umwandlungsgesetz) and with succession in title from the former Blohm + Voss AG, which has been renamed Blohm + Voss Holding AG, and is now a holding company without operational functions.

Managing Directors at Blohm + Voss GmbH will be Hervert von Nitzch, chairman; Peter Fuhrmann; Udo Hutten; and Helmut Nadler. Managing Directors at Blohm + Voss Industrie GmbH are Dieter Roschmann, chairman; Peter Fuhrmann; and Udo Hutten. B+V has also announced its plans to shed an additional 800 to 850 jobs in a bid to increase profits and secure the future of the Hamburgbased yard. The cuts will leave the yard with an estimated workforce of 1,900, compared with 3,373 employees at the end of last September.

The company also announced that it will merge the B+V ship repair sector with its subsidiary Barthels & Luders, also based in Hamburg, while at the same time cutting capacity. This alone will cost almost 500 jobs. Boiler production and other small activities will be dropped, while central service activities will be earmarked to individual production units, or will be subcontracted.

B+V added that the new structure will help the company to achieve sales of $745.3 million, compared with parent company Blohm + Voss revenues of $1.1 billion in the 1994/95 business year, and group sales of $ 1.2 million. It recorded a pre-tax loss of $31.4 million last year, following a loss of 16.9 million in 1994. The yard's main reason for last year's loss was due to the ship repair sector, where orders decreased in the wake of weakening prices due to the strong deutschmark, especially against Polish and U.K. currencies. Income this year compared with last was virtually halved.

Despite the uncertainty such a reorganization program has on the market, the yard has recently been fairly busy, especially in the containership market. Ships recently in the yard include P&O Containers' Tokyo Bay, Hapag Lloyd's Bremen Express, Dresden Express' DSR-Senator and Isla de la Plata and ABC's bulk carrier Cornells Verolme.

Lloyd Werft, part of the Bremer Vulkan Group, has also won some significant contracts in recent weeks. The yard won the Stena Felicity refit from Stena Line, then the refit of Victoria from P&O Cruises, and the Table Bay refit from P&O Containers.

Hamburg's Hamburg-Sud, one of Germany's leading shipowners, has also showed faith in the German shipyard, with a contract to carry out major accommodation modifications onboard the recently purchased 42,221-dwt containership New York Express, which was renamed Cap Roca after the work was completed.

The largest contract won by Lloyd Werft this year was the $8- million contract to convert passenger/ car ferry Stena Jutlandica from a Scandinavian service ship to a cross channel ferry. The contract, which was completed during August, involved the complete refit of the two passenger decks with installation of fast food restaurants and shopping facilities to bring the ship online with other ferries operating on this service. There was also work to be completed on the vessel's loading and discharging system.

The vessel arrived in Bremerhaven during mid-June and the conversion took approximately six weeks. The vessel has now entered the Dover/Calais service under its new name, Stena Emporeur.

Lloyd Werft has also been awarded a contract for the life extension of four containerships owned by Safmarine, a large South African shipping line. The contract, which cost approximately $28 million, will involve life extension onboard the 3,000-TEU containerships Waterberg, Winterberg, Sederberg and Helderberg. Work on the four 50,000- dwt vessels will include the replacement of eight generator sets, removal and extensive repair to 39 hatch covers and the upgrading of the ballast tanks. Safmarine is upgrading the speed of the vessels as well as their ability to carry larger numbers of 40-ft. (12.2-m) containers. Built between 1978 and 1981, the vessels are scheduled to be drydocked between August and next January.

Another yard actively involved in the conversion industry is Meyer Werft, Papenburg, more recognized as a shipbuilder, and winner of the contract to convert vehicle carrier Ocean Highway, which was purchased by Kuwait Livestock Transport & Trading Co. (KLLT) for approximately $4 million, to a specialized sheep carrier for KLTTs Australian/Middle East service. The vessel is to be renamed Al Mesilah.

Meyer Werft, which over the years has reportedly converted 25 vessels to this type of livestock carrier, won the contract against competition from Bahrain's ASRY and a number of Southeast Asian and Far Eastern shipyards. The conversion project will take approximately 11 months to complete, with some work being subcontracted to a shipyard in Kleipeda, Lithuania, and Bremerhaven's Motoren werke Bremerhaven (MBW). All final outfitting work will be carried out in the Papenburg shipyard. MAN B&W continues to enjoy its successful market niche, especially in the low speed market; with one latest contract involving a series of 650-TEU containerships building at Singapore's Jurong Shipyard Ltd. for NOL. Each vessel will have a seven-cylinder S42MC two stroke unit as the main propulsion unit.

MAN B&W lost the recent P&O Containers contract (two 6,600-TEU ships) to Sulzer, although among a long list of containership newbuilding orders, the German engine company has contract for the 5,200-TEU ships building in Kawasaki Heavy Industries (KHI) for COSCO; the series of nine 6,200-TEU ships building for A.P Moller at Odense Skibsvaerft, Denmark; the 4,400-TEU ships building for Hapag Lloyd in Mitsui Shipbuilding & Engineering (MSE); some of the 4,000+ TEU ships building in South Korea for Hanjin; and all of the 3,800-TEU ships building in Japan for United Arab Shipping Co. (UASC).

News from the diesel engine manufacturing industry includes the continuing cooperation between Germany's MTU and the U.S.' Detroit Diesel Corp. (DDC). In the U.K., sales and distribution of MTU units will be taken over by Mitchell, the DDC agent, with MTU and DDC as individual offices retaining their responsibilities while striving to set up a joint MTU/DDC office. Meanwhile, in Norway, Bemer Larsen, which is the established DDC office, has been taken over by Bartle O Steen, the existing MTU agent. All reorganizations are expected to be completed by the end of this year. This new cooperation is expected to announce two new designs at the forthcoming SMM exhibition in Hamburg. These will be the 2000 series (200-1,343 kW) and the 4000 series (665-2,720 kW).

U.S. company Caterpillar is also slated to become involved in the German diesel engine manufacturing industry with the takeover of medium speed specialist MaK Maschinnenbau, Keil, from ownership of the massive Krupp Group. A letter of intent for the takeover to proceed has already been signed.

Diesel Marine International Group (DMI), supplier and re-conditioner of critical components for two and four-stroke marine diesel engines, has added a new dimension to its marine service with the acquisition of the Drechsler group of companies in Hamburg. Drechsler is a long-established marine service company based in Hamburg, offering a wide range of repair and reconditioning services both onboard ships and in its workshops.

DMI's customers worldwide, with ships trading to Northern Europe, now have access through the DMI marketing operation to a comprehensive range of repair services from DMI (Drechsler) GmbH.

One of the largest orders won this year by diesel engine manufacturer Deutz/MWM involved the supply of CODAD plants onboard three patrol boats building for the French Navy at Leroux & Lotz (Nantes). Each main propulsion system comprises two 16-cylinder 620 units and two 12-cylinder 234 units.




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MAN B&W Celebrates 100th Anniversary Of Diesel Engine License Agreement
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Oceaneering Affiliate Wins Part Of $10 Million Platform Contract
Orange Shipbuilding Tackles Multiple Projects For Corps Of Engineers, Navy
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Pressler Introduces Ocean Shipping Reform Act
Scotland's RRD Performs Technically Demanding Ship Stretch
SHIP REPAIR & CONVERSION
SSE Secures Further Contract For Two Container Vessels
TANKERS FOR RUSSIA TO BE BUILT IN U.S.
TEXTRON Marine & Land Wins $26.6 Million USCG Contract
The Good Life
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Unitor Contracting Div. Gets Work On RCCL Ships
Walz & Krenzer Awarded Multiple Cargo Access Door Contracts
Westinghouse Gets $ 6 9 . 8 M For SEAL Delivery System
 
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