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.

vdma.org
 

Maritime Reporter June 2014 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

U.S. Marshalls Ordered to Seize Kurdish Oil Cargo off Texas

Acting on a request from the central government in Iraq, a U.S. judge has signed an order telling the U.S. Marshals Service to seize a cargo of oil from Iraqi Kurdistan

Diana Containerships Q2 & 1H 2014 Financial Results

Greece-based Diana Containerships Inc., a global shipping company specializing in the ownership of containerships, has reported net income of $0.6 million for the second quarter of 2014,

Mercator Lines Profit Hit by Low Bulk Freight Rate

Mercator Lines (Singapore) reported a revenue of US$ 16.5 million for Q1 2015, an increase of 19% as compared to correspoding period in the previous previous year, however a net loss of US$ 7.

Shipbuilding

China Shipyards Bag the Week's Ocean-going Newbuild Orders

Reported ordering this week has been exclusively focussed on the Chinese yards, says Clarkson Hellas in their latest 'S&P Weekly Bulletin'. Dry bulk carriers COSCO

Aker Philadelphia Shipyard ASA: Purchase of own shares

Aker Philadelphia Shipyard AKPS), a leading U.S. commercial shipyard constructing vessels for operation in the Jones Act market, has on July 25, 2014 purchased 1,

HMS Prince of Wales Delivery Begins

A huge section of hull for HMS Prince of Wales, the second aircraft carrier being delivered to the Royal Navy, has today departed BAE Systems in Glasgow on a 600-mile

Finance

Diana Containerships Q2 & 1H 2014 Financial Results

Greece-based Diana Containerships Inc., a global shipping company specializing in the ownership of containerships, has reported net income of $0.6 million for the second quarter of 2014,

Mercator Lines Profit Hit by Low Bulk Freight Rate

Mercator Lines (Singapore) reported a revenue of US$ 16.5 million for Q1 2015, an increase of 19% as compared to correspoding period in the previous previous year, however a net loss of US$ 7.

China Shipyards Bag the Week's Ocean-going Newbuild Orders

Reported ordering this week has been exclusively focussed on the Chinese yards, says Clarkson Hellas in their latest 'S&P Weekly Bulletin'. Dry bulk carriers COSCO

Marine Power

Desulfurization of Exhaust Gases in Shipping

Are shipowners prepared to enter SECA zones?   Due to existing regulations on air exhaust emissions from the International Maritime Organization (IMO), and with

Cummins Reports Revenue Jump in Q2 2014

Cummins Inc. reported its results for the second quarter of 2014. According to the report, second quarter revenue of $4.8 billion increased 7 percent from the same quarter in 2013.

Master Marine Delivers Z Drive Towboat

Master Marine, Inc. delivered its first 2,000 hp Z Drive inland river towboat last month. The towboat represents the first vessel (Entech Design) of this series by the yard.

LNG

ABS to Class the World's First CNG Ship

ABS announced it has been chosen to class the world's first compressed natural gas (CNG) carrier ordered by Pelayaran Bahtera Adhiguna, a subsidiary of Indonesia's

FLNG Prelude: A New Dawn in the Age of Maritime & Energy

Longer than four football fields, as big as six Nimitz-class aircraft carriers and almost as tall as the Taipei 101 skyscraper, Royal Dutch Shell PLC is hoping that its record-setting,

LNG to Acquire Bear Head LNG Project in Canada for US$11 mi

Liquefied Natural Gas Limited today announced that it has significantly expanded its presence in the North American Liquefied NaturalGas (LNG) sector by signing

News

Total Sells ts Coal Mining Assets to Exxaro

Total has signed an agreement with Exxaro Resources Ltd for the sale of its 100% stake in Total Coal South Africa (TCSA), its coal-producing affiliate in South Africa.

Crew of USCG Cutter Thetis to Return today

The crew of the Coast Guard Cutter Thetis, a 270-foot medium endurance cutter based out of Key West, Florida, is scheduled to return to homeport Tuesday at 11:45 a.

Control of Emission from Vessels in Hong Kong Waters

Amendments to the Shipping and Port Control Ordinance (Cap. 313) and the Merchant Shipping (Local Vessels) Ordinance (Cap. 548) to enhance the control of dark

Marine Equipment

MTN Lands Cruise Line SatCom Contracts

MTN Communications (MTN) says that three cruise operators around the world have selected the company for its passenger, crew, corporate communications and content services.

Cummins Reports Revenue Jump in Q2 2014

Cummins Inc. reported its results for the second quarter of 2014. According to the report, second quarter revenue of $4.8 billion increased 7 percent from the same quarter in 2013.

Master Marine Delivers Z Drive Towboat

Master Marine, Inc. delivered its first 2,000 hp Z Drive inland river towboat last month. The towboat represents the first vessel (Entech Design) of this series by the yard.

Offshore Energy

Prelude By the Numbers

Out at sea, look! It’s a ship! It’s a floating rig! It’s SuperFLNG! While not “faster than a speeding bullet,” Shell’s shipzilla Prelude is certainly more powerful than a speeding locomotive,

FLNG Prelude: A New Dawn in the Age of Maritime & Energy

Longer than four football fields, as big as six Nimitz-class aircraft carriers and almost as tall as the Taipei 101 skyscraper, Royal Dutch Shell PLC is hoping that its record-setting,

Corvus Energy, GMC Close Financing Agreement

Corvus Energy today announced that it has completed a strategic investment by Green Marine Capital (GMC) previously announced on May 5, 2014. Green Marine Capital,

 
 
Maritime Security Maritime Standards Naval Architecture Navigation Pipelines Pod Propulsion Salvage Ship Electronics Ship Simulators Sonar
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: 0.1815 sec (6 req/sec)