Market Improving for German Equipment Suppliers

By Eric Haun
Wednesday, July 02, 2014

The German Engineering Federation (VDMA) reported a good order situation for German marine and offshore oil and gas equipment suppliers, but the upsurge in incoming orders is not making the sector euphoric.

“The boom in world ship newbuilding orders in 2013 gave us strong order growth, particularly from China and Korea. Here our ongoing export commitment in the global market is paying off: Germany remains the leading country for marine equipment suppliers worldwide. At the same time, we registered above average growth in incoming orders in the offshore oil and gas area,” stated Dr. Alexander Nürnberg, Chairman of VDMA Marine and Offshore Equipment Industries, at the association’s press conference held in Hamburg on Wednesday. But despite this overall picture, we mustn’t lose sight of the fact that although 40% of companies have achieved growth a quarter of firms have reported a decline,” Nürnberg added.

The improved order situation has meant that overall the workforce could be kept at the previous year’s level and productivity in the companies could be increased. “This is also absolutely necessary so that companies can finance their technical edge with their own R&D and at the same time withstand the enormous pressure on prices,” Nürnberg explained. “We also do not expect to see a continuation of the shipbuilding boom in 2014, but rather a further consolidation and fresh challenges.” Customers are requiring suppliers to provide ever more system expertise and solution proposals already during the development phase. “That continues to represent our chance as makers in Germany vis-à-vis the international competition,” Nürnberg emphasized.

Sector sales €11.7 billion in 2013
German marine and offshore equipment suppliers achieved sales of €11.7 billion (+1%) with 68,000 employees in 2013. The export rate was 72%. But actual exports are much higher, as many German maritime product and system suppliers cooperate to integrate components into overall systems for delivery to shipbuilders worldwide.

Incoming orders well up
Following 3.9% in 2012, growth in incoming orders reached a gratifying 11.2% in 2013. This considerable increase is attributable to the surge in orders in global merchant shipbuilding in 2013 with 70% growth in the number of vessels. However, the sector expects to see a definite consolidation and is bracing itself to meet a drop in demand in 2014. There was already consolidation in the offshore oil and gas industry in 2013. The sector anticipates pent-up demand in this area in 2014-15.

Opportunities in new export markets
The top three countries for shipbuilding are China, Korea and Japan. Brazil and Russia, which have become important shipbuilding countries in recent years, also expanding thanks to demand from the oil and gas segment, are currently showing no growth. A total of 3,375 oceangoing ships were ordered worldwide in 2013 (previous year: 1,977). Orders for 1,343 (651) vessels were placed in China, 557 (231) in Korea, 566 (361) in Japan, 30 in Brazil (66), 10 in Russia (11) and 207 (155) in the EU-28, including 10 (10) in Germany. Global orders on hand for ships accordingly surged from 5,550 to 5,994 units last year.

China and Korea much more important as markets
The main foreign customers of German suppliers in 2013 were in Asia, attracting 46% of orders (+ 6), and other European countries, with 31% of orders (- 5). China is the largest foreign market accounting for 25% of orders, well up on the previous year (+ 8). It is trailed by Korea with 14% (+ 4). Declines were reported for the rest of Asia and Latin America. The sector receives its incoming orders currently from merchant shipbuilding and special-purpose shipbuilding. The latter remains, particularly for work boats, stable worldwide at a high level.

Global competition is intensifying. German suppliers that offer in particular custom-fit solutions for retrofitting – e.g., for making ships more energy-efficient or adapting them to meet new emissions legislation – have advantages. Companies can also sharpen their competitive edge by providing smart service solutions that directly help operators reduce operating costs.

Offshore oil and gas – growth despite global market stagnation

German suppliers are very successful with ongoing export activities in the offshore oil and gas industry and are securing further market shares in a tight and highly competitive sector. “Perseverance and in particular reliability, availability and quality are called for here in a rather conservative market,” Nürnberg stressed. The ideas of German companies for environmental and safety standards also give them a considerable competitive advantage precisely in this market.

Liquid Natural Gas – propulsion on the oceans
Over 90% of transport services worldwide are by sea. Environmental protection represents a key factor in maritime transport, and the current marine propulsion systems are much more energy-efficient than any land or air transport. Pollutant emissions can be further reduced with the use of LNG.

The engine is at the heart of propulsion technology. Innovations in this area have the greatest influence on energy efficiency. The energy- and cost-saving and at the same time environment-friendly operation of ships and offshore plants is this the sales argument today. But here the conditions for the operators must apply everywhere. “Our industry depends on a reliable, international legal framework. Only with this can we successfully market ‘high tech made in Germany’ globally,” noted Klaus Deleroi, Senior Vice President at MAN Diesel and Turbo SE, Augsburg. “Makers show a massive commitment in their R&D activities with no certain prospect of success. We can thus offer operators today a wide range of highly efficient engines running on conventional fuels including exhaust gas cleaning as well as dual fuel engines, which can also be operated with gas. Overall LNG is the most environment-friendly and probably also the most commercially promising solution.”

Secret of success – staff
Innovations, productivity improvements and new services are possible only with motivated, well trained people who are team players. “We are training increasingly in house, to a much greater extent than ten years ago. Our team is our capital. However, the quality of school education is causing us concern. The young people who come to us require much more attention and further training in companies. We cope by working together, but the outlay for us is increasing all the time,” Nürnberg noted when discussing the subject of locational advantages.

Maritime Reporter January 2015 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

Transas: The Bridge to Tomorrow

Transas was founded in 1990, by a group of former navigators and engineers, who at that time envisioned ways in which computers could revolutionize maritime safety, communications and security.

ZF Celebrating 100th Anniversary

2015 marks the 100th anniversary of the foundation of ZF Friedrichshafen AG   Zahnradfabrik GmbH was founded in 1915, and through a 100-year history has developed

Signal Ship Repair Achieves OSHA Milestone

Signal International announced that on December 31, 2014, the Signal Ship Repair Operations located in Mobile, Alabama achieved one full year and worked 387,926 manhours,


Shepler’s New Ferry Takes Shape

Sparks are flying on the bulkhead and engine room of the $3.8 million, 85-foot Miss Margy, the newest addition to the Shepler’s Mackinac Island Ferry fleet, at Moran Iron Works.

The Art of Propeller Making

The world’s biggest propellers have their cradle in the North of Germany. MMG – Mecklenburger Metallguss GmbH – has manufactured for more than 65 years propellers for ships,

LEEVAC Launches First PSV for Tidewater

On Tuesday, January 27, LEEVAC Shipyards Jennings, LLC launched hull 367, a platform supply vessel (PSV) designed by LEEVAC Design Services, LLC (300 DE-52 HAB PSV).


Denmark's Budget Gap May Flirt with EU Limit if Oil Stays at $50

Denmark's government estimates its budget would lose 7.5 billion Danish crowns ($1.1 billion) if oil prices remained around $50 a barrel, according to a document

Sweden-Poland Maritime Link Improved

The EU's TEN-T Program will co-fund with over €2 million the development of the sea ports of Trelleborg (Sweden) and Świnoujście (Poland), to increase their competitiveness and sustainability,

West Coast Port Talks Clear Hurdle

Shipping companies and the union for 20,000 dockworkers at nearly 30 U.S. West Coast ports have cleared a major hurdle in their protracted labor talks, clinching


US House Passes Bill to Pressure Regulators on LNG Exports

The U.S. House of Representatives passed a bill on Wednesday to speed permits for exports of natural gas, a measure that even if passed by the Senate and signed into law by President Barack Obama,

DSME Building 5 Icebreaking LNGCs for Yamal

Korean shipbuilder Daewoo Shipbuilding & Marine Engineering (DSME) is building five large Arctic Liquefied Natural Gas Carriers (LNGCs), for which it has LNG ordered

GTT to Exhibit at Euromaritime

Gaztransport & Technigaz (GTT), a designer of membrane containment systems for the maritime transportation and storage of liquefied natural gas (LNG), will exhibit at Euromaritime,


Shepler’s New Ferry Takes Shape

Sparks are flying on the bulkhead and engine room of the $3.8 million, 85-foot Miss Margy, the newest addition to the Shepler’s Mackinac Island Ferry fleet, at Moran Iron Works.

LEEVAC Launches First PSV for Tidewater

On Tuesday, January 27, LEEVAC Shipyards Jennings, LLC launched hull 367, a platform supply vessel (PSV) designed by LEEVAC Design Services, LLC (300 DE-52 HAB PSV).

Puget Sound Container Volumes Flat in 2014

Container volumes through Puget Sound’s largest container ports remained flat in 2014, according to numbers released jointly for the first time by the ports of Seattle and Tacoma.

Marine Equipment

New YANMAR EPA Tier III Engine

YANMAR America introduced its new EPA Tier III compliant commercial marine diesel engine. Rated at 755 mHP and 1,900 rpm, the new 20.38-liter 6AYAM-ET uses a full mechanical control system.

Volvo Penta Debuts New Marine Engines

Volvo Penta introduced the first two models of its next-generation sterndrive marine gasoline engines. The new 4.3-liter catalyzed V6 engines, rated at 200 and 240 hp,

BICERA Explosion Relief Valve

Sometimes it seems cliché to repeat that a product or system “protects equipment and saves lives,” but in the case of valve manufacturer Penn-Troy, which recently

Offshore Energy

Wärtsilä Propulsion Solution for 3 Tugs

Three large new escort tugs contracted by Norwegian operator Østensjø Rederi, will feature Wärtsilä dual-fuel (DF) engines integrated with a customized gas storage

Greatship to Buy PSV

Greatship (India) Limited (GIL), a wholly owned subsidiary of The Great Eastern Shipping Company Limited, has signed a contract to buy a 2015-built 4000 dwt Platform Supply Vessel (PSV).

US Proposes Allowing Oil, Gas Drilling off Atlantic Coast

The Obama administration on Tuesday proposed allowing for the first time oil and gas exploration in a wide swath of U.S. waters off the Atlantic Coast.   The

Maritime Security Maritime Standards Naval Architecture Navigation Offshore Oil Port Authority Salvage Ship Repair Shipbuilding / Vessel Construction Winch
rss | archive | history | articles | privacy | terms and conditions | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.2872 sec (3 req/sec)