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Europeans Hang On With Technology

European shipbuilding's everslackening hold on the indigenous market for the larger types of cargo-carrying vessel has been emphasized by recent contracts placed in Japan and South Korea by owners from communities traditionally loyal to national industries where the capability, if not the will, has been retained to build highcapacity crude carriers and bulkers.

In the face of domestic economic adversity, Korean shipbuilders in particular have demonstrated fortitude of an order which transcends any advantageous position conferred by a weakened currency. But time will tell whether structural changes to the industry in other parts of eastern Asia, precipitated by economic crises in the region, will impact on the market and hence on the seemingly inexorable drift of business towards the Orient.

Despite Europe's loss of production of the most populous categories of deepsea merchant vessel, sectors of the industry have displayed a tremendous business resilience, maintaining markets and competitiveness through a focus on technology and production processes.

Cruise ship construction is a case in point, but world-class efficiency in turning out altogether more modest vessel types is also clearly evident.

Dutch shipbuilding, in particular, has demonstrated a level of efficiency in small-vessel construction on a scale scarcely matched in any other part of the world, which stems not only from technical and design skills, but from organizational methods, notably a far-sighted approach to outsourcing coupled with investments in areas of specialization. While welcoming the impending abolition of EU subsidies, there is a growing feeling in those quarters that the European Commission needs to re-think its shipbuilding policies so as to better enable the more dynamic sectors of the industry to thrive and contribute to the wider economic well-being.

It could be said that the EU would do well to nurture such areas of enterprise and competence in the face of growing international uncertainty.

"It is striking that capacity control of the European shipbuilding industry is still an issue," observes Central Industry Group (CIG), a Dutch company heavily involved in ship steel fabrication, shipbuilding, design and marine engineering.

"If the sector is to flourish and blossom, the policy to be pursued should be proactive and stimulating rather than reactive, subsidyoriented and restrictive of capacity." The industry in the Netherlands considers itself strong enough to maintain its position in a globally subsidy-free environment.

The manner in which firms have retained viability and competitiveness should perhaps be better appreciated by the Commission, which often models its policies on Japan, despite fundamental differences between the industries in Japan and Europe as regards generic ship type focus, unit scale, corporate diversification and shipbuilding profitability.

"It would be better if the EC were to follow the top segment of productive European shipyards and to benchmark these," suggests CIG. "From a conceptual perspective, the top segment of the European shipyard industry might well be better prepared for the future than their Japanese colleagues," it suggests.

"After all, the shipyard of the future is likely to be an assembly company with a strong business orientation on project development and a clear operational focus on project management, rather than an old-fashioned, inflexible, capital- absorbing and labor-intensive ship's plant.

This new type of shipyard makes use of a network of suppliers each specializing in his own product and often working for various shipyards." "Such a structure of the industry will lower the risk profile of both the shipyards and their network of suppliers," asserts Groningen-based CIG. The north Netherlands, where a cluster of independent shipyards, section builders, materials and equipment suppliers, function in an integrated manner, provides a showcase for such arrangements.




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